BERLIN: Volkswagen will name Matthias Mueller, the head of its Porsche sports car brand, as its chief executive as it tries to recover from a scandal over its rigging of US vehicle emissions tests, a source close to the matter said yesterday.
Mueller, 62, has been widely tipped to succeed Martin Winterkorn, who quit on Wednesday, when the German carmaker’s supervisory board meets today, and will take responsibility for the biggest business crisis in Volkswagen’s 78-year history.
Shares in the world’s largest carmaker by sales have plunged as much as 40 percent since Friday, when US regulators said it had admitted to fitting software on hundreds of thousands of diesel cars to detect when they were being tested, and alter the running of their engines to conceal their true emissions.
The crisis deepened yesterday, when Germany’s transport minister said Volkswagen had manipulated tests in Europe too. “We have been informed that also in Europe, vehicles with 1.6 and 2.0 litre diesel engines are affected by the manipulations that are being talked about,” Alexander Dobrindt told reporters, adding it was unclear how many vehicles in Europe were affected.
Volkswagen has said 11 million cars globally had the software fitted, but it was not activated in the bulk of them. As well as the cost of regulatory fines and potentially refitting cars, Volkswagen faces criminal investigations and lawsuits from cheated customers and possibly shareholders.
More immediately, the new CEO will have to restore the confidence of customers and motor dealers, who have expressed frustration at a lack of information about how they will be affected by the scandal.
Mueller has a majority on the 20-member supervisory board, the source said. Volkswagen declined to comment. The board will also dismiss the head of the company’s US operations and top engineers at its Audi and Porsche brands, a senior source told Reuters, as it seeks a fresh start.
“He is a good choice even though he may be seen as a transitionary CEO until another internal candidate such as VW brand CEO (Herbert) Diess has earned their stripes,” Arndt Ellinghorst, an analyst at Evercore ISI investment banking advisory firm, said of Mueller.
The new CEO’s priority would be to renew Volkswagen’s leadership, restructure costs and create a “performance-driven company” where management was more accountable,” he added.
Mueller, who has worked for parts of the Volkswagen empire since the 1970s, is a management board member of Porsche SE and so is close to the Piech-Porsche family that controls Volkswagen through the holding company. The company is under pressure to act decisively, with German Chancellor Angela Merkel urging it to quickly restore confidence in a business held up for generations as a paragon of German engineering prowess.
“There will be further personnel consequences in the next days and we are calling for those consequences,” Volkswagen board member Olaf Lies told the Bavarian broadcasting network.
The research and development chiefs of Audi and Porsche, Ulrich Hackenberg and Wolfgang Hatz, will be removed by the supervisory board, as will Volkswagen’s top executive in the United States, Michael Horn, the senior source said.
Hackenberg and Hatz had both held senior posts at VW in development, including of engines, before they switched to Audi and Porsche. They are among Volkswagen’s top engineers. Horn acknowledged this week that the company had “totally screwed up” by deceiving US regulators about how much its diesel cars pollute.
The scandal has sent shockwaves through the car market, with manufacturers fearing a drop in demand for diesel cars and tougher regulations and customers worrying about the performance and re-sale value of their cars.
German rival BMW said it had not manipulated tests, after a magazine reported some of its diesel cars were found to exceed emissions standards.
Reuters
BERLIN/LONDON: Motor dealers and consumer groups alike expressed frustration yesterday at a lack of information from Volkswagen about the implications for customers of a scandal involving diesel cars rigged to pass US emissions.
“We are getting lots of phone calls asking ‘What is the likely impact of this?’” said an insider at a major Volkswagen dealership in Britain, who declined to be named. “But we not getting anything from Volkswagen, so we don’t have anything to pass on to them.”
The same was true in Frankfurt: A women at the reception desk of a VW dealership, who declined to give her name, said she had received many queries from diesel car drivers. “But we haven’t got the ultimate answer because we haven’t got much information from Volkswagen,” she said.
The German group has set aside ¤6.5bn ($7.3bn) to help cover the costs of the crisis and said that 11 million of its cars could be affected worldwide, but has not yet announced a recall.
VW said in a statement on its websites that it could not say which models and years of construction were affected, adding it would provide further information as soon as possible. “It goes without saying that we will take full responsibility and cover costs for the necessary arrangements and measures. But this process will take time,” VW said.
Italian consumer group Altroconsumo said it, along with similar organisations in other European countries, was planning to write to Volkswagen demanding clear information on the situation immediately.
Klaus Mueller, head of the Federation of German Consumer Organisations, said Volkswagen must compensate any consumers affected and retrofit all affected vehicles. “Volkswagen is called upon to comprehensively clear this up,” he said.
Lawyers have already brought class actions on behalf of scores of car owners in the United States and Italian consumer group Codacons is collecting signatures for a potential suit.
Market research company YouGov said it had recorded a big hit to the VW brand in the United States and Britain, where VW has tumbled into the lowest position among 34 brands.
In an attempt to reassure customers, VW said new diesel models covered by the European Union’s Euro 6 emissions standards met legal requirements. The software in question did not affect handling or consumption, or control emissions, it added.
However, in a Swedish Volkswagen Golf chat room, consumers were discussing whether it will be possible to cancel recent orders, with one person saying he had been planning to purchase a hatchback, but decided never to buy VW again due to the scandal.
“We expect environmentally sensitive consumers will increasingly pay attention to emissions and avoid diesel-powered cars,” said Raffael Wuethrich, project leader for sustainability and energy at the Swiss Foundation for Consumer Protection. Tim Pollard, executive editor of Britain’s Car Magazine, agreed: “The actual topic of emissions is a bit of a dry topic, but they (consumers) do understand that it affects the tax they pay and the amount of money in their pocket.” Reuters
