Markets

Volkswagen replaces CEO, announces new structure

Volkswagen replaces CEO, announces new structure

Previous group head, Matthias Müller, had been serving the company since the emissions scandal began in September 2015.

Shares in Volkswagen closed almost two percent higher to 176.60 euros ahead of the closely-watched board meeting, outperforming the Dax index of leading shares that was up almost one percent.

Europe's largest automotive group is poised to replace group chief executive Matthias Mueller this week with Diess, a cost-cutter hired in 2015 from BMW as it seeks fresh impetus for its recovery from an emissions scandal.

Volkswagen has set up a services company, Moia, and converted its plants to turn out more battery-powered models.

Dieselgate has so far cost VW more than 25 billion euros ($31 billion) in buybacks, fines and compensation, and the carmaker remains mired in legal woes at home and overseas.

Herbert Diess, the head of VW's namesake brand, will become chief executive officer as well as overseeing technology across the organization, the company said Thursday in a statement. Diess will also be responsible for VW Group development and research, as well as Vehicle IT.

The Volkswagen empire owns the Ducati motorbike brand, Scania buses and trucks, passenger auto brands including Skoda, SEAT and Audi (IOB: 0FG8.IL - news), as well as the Bentley, Porsche and Lamborghini luxury marques.




He said he would look at the different assets in VW's portfolio which included Renk and MAN Diesel, and review whether keeping them made sense. This new structure will include the brand groups of volume, premium and super premium products, as well as a truck and bus division, and a still-unannounced fifth and sixth division as of Friday morning. "For that, he is due the thanks of the entire Company".

He was installed after Mueller's attempts to reshape the automotive group foundered amid labour opposition, including his plans to sell motorbike brand Ducati.

More details about the restructuring are expected to be revealed at a press conference at VW's Wolfsburg headquarters on Friday morning.

Hans Dieter Pötsch, chairman of the supervisory board, said Diess was the right manager to ensure VW Group secured its position as an global vehicle-maker, as well as being instrumental in shaping the future of personal mobility. But when Winterkorn fell, he had been with Volkswagen for less than three months. He helped steer the company out of its diesel emissions scandal and into a new era of investment in electric cars.

"There have been historic episodes where cost cutters have been brought in to sort out the namesake VW brand, but who then leave or are squeezed out before their work is really done", Sanford Bernstein analyst Max Warburton wrote in a note.

"Back then, we were not immediately on the same page", Osterloh said in his letter.


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