Volkswagen appoints Porsche head as new VW chief executive

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Berlin (dpa) – Volkswagen new chief executive Matthias Mueller said Friday he plans to tighten controls at the scandal-hit German carmaker after he was appointed head of the embattled group.

The up-until-now chief of the luxury sports carmaker Porsche, Mueller takes over from Martin Winterkorn, who resigned as chief executive on Wednesday in the wake of the scandal, which followed revelations that VW cheated on exhaust emissions tests around the world.

“We will introduce even stricter compliance and governance in the group so that a scandal like this can never happen again,” said the 62-year-old Mueller, who said his number one priority now was to restore the carmaker’s battered reputation.

“My most urgent task is to win back trust for the Volkswagen Group … through maximum transparency,” he said following a more-than six-hour meeting of the company’s supervisory board at VW’s sprawling headquarters in the northern German city of Wolfsburg.

“We can and will overcome this crisis and make VW even stronger,” the new VW chief said. VW plans to hold an extraordinary annual general meeting on November 9.

Earlier this week, VW said about 11 million of its vehicles around the world were fitted out with software aimed at evading the emissions tests.

The carmaker said it was laying aside 6.5 billion euros (7.3 billion dollars) in the third quarter to help meet the costs of the scandal, which in the end could cost the group more than 18 billion dollars in fines in the US alone.

German Transport Minister Alexander Dobrindt said Friday that Volkswagen had manipulated the exhaust emission tests of 2.8 million cars alone in Germany and that the company’s light commercial vehicles had also been installed with the software.

Signs have already emerged that Mueller’s rise to the chief executive job will set the stage for sweeping changes to the management of the company’s 12 car brands.

The scandal had been “a moral and political disaster” for VW, said acting supervisory board Berthold Huber, who apologized for the affair adding that several of company employees had already been sent on leave as result of the revelations.

VW said that Skoda brand chief Winfried Vahland will take up a newly created post in the US to help the company rebuild its tarnished name in the giant North American market where the scandal first broke a week ago.

This forms part of VW’s plans to establish a more regional-based management structure. The head of VW’s US operations Michael Horn is to remain in his job.

Company chief sales officer Christian Klingler is to leave the company because of “difference in opinions” over strategy, VW said.

VW is widely tipped to appoint Porsche’s production chief Oliver Blume to replace Mueller as the sports carmaker’s new chief executive.

Since taking over as Porsche chief in 2010, Mueller has steered the sport car group to a string of record profits with sales almost doubling during his five years as head of the company as he oversaw the expansion in the range of its models.

Mueller’s VW career, which stretches back to the 1970s when he joined the group’s luxury Audi offshoot, has given him a background in the operations of both Audi and Porsche, which are today the mainstays of the VW group’s profit.

Underlining the scale of the scandal, VW is now bracing itself for a wave of litigation from around the world as the carmakers’ consumers and prosecutors consider legal action against the group, which last year generated 202.5 billion euros in revenue. Lawsuits could take years to settle.

The revelations sent shockwaves across Germany’s 368-billion-euro a year car sector with VW rivals distancing themselves from the scandal.

VW shares closed 4.3-per-cent down on Friday on the Frankfurt Stock Market amid investors’ worries about the implications of the scandal, which has wiped about one third off the group’s value this week.

However, stocks in other leading German auto groups – BMW and Daimler – rebounded strongly on Friday after incurring heavy losses earlier in the week following VW’s cheating revelations.

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