September 25, 2015, 00:13 / Auto / News

Porsche CEO could become Volkswagen's new leader

Porsche CEO Matthias Müller is the main candidate for the post of head of the Volkswagen concern after the resignation of Martin Winterkorn as a result of the “diesel scandal,” Bloomberg reports , citing its sources. Müller, who has been with the company for forty years, has the support of the Porsche and Piech families, who own VW, as well as the automaker's influential union leaders, the source said. The decision is due to be made on Friday at a meeting of the 20-member supervisory board at VW's headquarters in Wolfsburg. A Volkswagen spokesman declined to comment to Bloomberg.

If Müller, 62, takes over the leadership of the Volkswagen group, he will have to win back lost trust from consumers and regulators after the company admitted to falsifying diesel engine emissions. The crisis has wiped out €20 billion of the group's market capitalization in a week, the CEO has resigned, and the company is on the verge of radical changes, including the resignation of other key managers.

Audi development director Ulrich Hackenberg and Porsche Wolfgang Hatz may lose their positions, two agency sources said. Hackenberg was previously responsible for the development of the main VW brand, Hatz - for the development of VW engines. Also, the director of VW in the United States, Michael Horn, will be dismissed, who may be replaced by Winfried Faland, who now runs the group's Czech automaker Skoda.

"The supervisory board has drawn a line and given the opportunity to start from scratch," said Evercore ISI analyst Arndt Ellinghorst. Mueller "is a good choice, although he can only be seen as a transitional CEO" because of his age, he said.

“Dieselgate”, which began last week in the United States, is now developing in Europe, Asia and America. VW admitted to installing software “with bookmarks” that can reduce emissions during testing in 11 million cars. In the US, the company faces fines of up to $18 billion; it has already reserved 6.5 million euros for expenses to neutralize the consequences of the scandal. The discovered falsifications of VW have provoked mistrust of regulators towards other automakers; the governments of many countries are going to conduct emergency checks of the compliance of vehicle emissions of all brands with current standards.

Müller was already called a potential successor to the group's CEO in April 2015, when the former chairman of the VW supervisory board, Ferdinand Piëch, unsuccessfully tried to remove Winterkorn from his post. Müller took charge of the sports car maker in October 2010, and over the past four years the division's revenue has grown by almost 65%. Like his predecessor, Müller is a Volkswagen career employee who joined Audi as an apprentice toolmaker in the early 70s.

Another candidate for the post of VW CEO was Herbert Diess, a former BMW top manager who took over as head of the VW brand at the beginning of the year. But Mueller is likely to be appointed, two Bloomberg sources said.

In a letter to company employees obtained by Bloomberg, VW union leader Bernd Osterloh said he would only accept the appointment of a CEO with deep technological and corporate experience, as well as an understanding of workers' interests. Representatives of the workforce occupy half of the seats on the supervisory board, which controls the strategy and makes key management decisions of the company.