Volkswagen's Herbert Diess to head volume brand division

Frederick Owens
April 15, 2018

Volkswagen replaced Mr Mueller after he failed to refocus the group's portfolio of vehicle brands and transform the company into a leader in cleaner cars after the diesel emissions scandal of 2015.

Müller led the Volkswagen Group through one of its toughest periods as it faced fire for its emissions cheating scandal.

German auto giant Volkswagen on Thursday named Herbert Diess as its new chief executive, replacing Matthias Mueller, as the one-time paragon of German industry seeks to turn the page on the "dieselgate" emissions scandal that has dogged it since 2015.

With a reputation as a tough manager and cost-cutter, the trained engineer boosted VW profitability in the years since, despite the massive reputational damage of the emissions scam.

Herbert Diess, head of the Volkswagen brand, will succeed Muller as chairman of the group's board of management.

Volkswagen, which employs over 640,000 people, turned aggressively to electric cars under Mueller's leadership, as well as inking agreements with Navistar to explore electric truck development in North America.

"We are convinced that, with Diess, we have the right man on board", works council chief Bernd Osterloh said in a letter to employees on Friday.

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.

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More details are expected to be revealed at a press conference at VW's Wolfsburg headquarters Friday at 10:30 am (0830 GMT).

The carmaker remains mired in legal woes overseas and in its home market, where it also faces possible diesel bans in some smog-clogged inner cities, a prospect that has already depressed resale prices to the chagrin of millions of owners of diesel vehicles.

"He must finally clear up the diesel affair ..."

The company said in a statement that it would group all its brands and management functions into six broad business areas plus China.

The group also appointed Dr Oliver Blume, chairman of the Board of Management at Porsche, to its governing body.

The carmaker will prepare its truck and bus division for "capital market readiness" by making it a public limited company as a prelude to a potential listing, confirming a Reuters report from last month.

"In realigning the Volkswagen brand, he has demonstrated to impressive effect the speed and rigour with which he can implement radical transformation processes", said Pötsch."This makes him predestined to fully implement our Strategy 2025 in the decisive years that are now to follow".

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