VW boss Matthias Müller to be removed as CEO

VOLKSWAGEN Group chief executive Matthias Müller is expected to leave his post on Friday, following a push from the company’s supervisory board.

A brief statement from Volkswagen released yesterday implied the imminent change, citing “a further development of the management structure of the Group, which would also be associated with personnel changes.

“This could also include a change in the position of the chairman of the board of management.”

According to the statement, decision makers are currently “in discussions with certain members of the board of management”, and “Mr Matthias Müller showed his general willingness to contribute to the changes.”

Confirmation that Müller, 64, would be a casualty came subsequently from sources close to him, according to German news. A vote by the supervisory board to seal his fate is expected at the end of this week.

What has motivated the change is yet to be made clear by its instigators, as Müller’s contract runs until 2020. Volkswagen Group under Müller’s leadership recorded an after-tax profit of 11.6 billion Euros (A$18.5b) last year on sales of €230.6 billion (A$367.4b), a return to form following the Dieselgate scandal.

The company as a whole sold 10.74 million vehicles in 2017 and claimed the title of world’s largest car maker. The Volkswagen brand is on track for another record year with 1,525,300 vehicles delivered in the first three months of 2018.

Müller received a huge pay rise under a remodelled remuneration program in 2017. A 40 percent salary increase put him on 10.1 million Euros (A$16.2m) per year.

He was elevated to the chief executive role from his position as head of Porsche in 2015 during the weeks of crisis immediately following widespread Dieselgate news coverage. It is believed Volkswagen’s senior stakeholders are seeking to cut ties completely with that torrid period of company history, and place a holistic focus on electrification.

German news outlets expect Müller’s successor to be announced as current VW brand manager Herbert Diess, who moved to Volkswagen from BMW two months before Müller’s appointment in 2015. His ‘clean skin’ is significant for the Group’s public perception going forward. Müller had no Volkswagen involvement during the time of diesel-emissions cheating that took place within the company prior to it becoming news.

Diess has an engineering background and is recognised as having been pivotal to increased profit margins at BMW and as the driving force behind BMW’s electrified ‘i’ sub-brand. He was regarded as a potential replacement for Martin Winterkorn as Volkswagen AG boss in 2015, though he had only been with the company for less than three months.

Taking over from Müller will put Diess in charge of more than 600,000 employees across 12 brands including Volkswagen, Skoda, SEAT, Audi, Porsche, Bentley, Lamborghini, Bugatti as well as commercial vehicle businesses Volkswagen Commercial, MAN and Scania, and the Ducati motorcycle operation.