Volkswagen’s board abruptly ended the tenure of CEO Matthias Mueller and picked Herbert Diess, chief of the VW brand, as his successor, people familiar with the matter said.
Volkswagen’s board abruptly ended the tenure of Chief Executive Officer Matthias Mueller, a caretaker who revived the carmaker after its worst crisis on record, turning instead to a leader who can implement deeper changes, people familiar with the matter said.
Key stakeholders came to the conclusion they couldn’t afford to wait two years until Mueller’s contract expired to appoint a fresh CEO, as they deliberated an overhaul of the company and how to most rapidly implement those changes, said the people, asking not to be identified discussing the private talks.
The 64-year-old Mueller, always a reluctant CEO who had grown weary of the regular grillings by board members, responded during the talks by signaling he was prepared to step aside, they said. With Mueller agreeing to go, the controlling Porsche-Piech clan, the state of Lower Saxony and powerful labor leaders settled on Herbert Diess, chief of the Volkswagen brand, as the successor, the people said.
None of these behind-the-scenes deliberations were apparent from VW’s surprise release that was as short as it was cryptic when it landed on Tuesday afternoon. The statement said the board was considering changes that included the position of the CEO, and Mueller had signaled his “general willingness to contribute to the changes.’’ The company declined to comment further.
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In tapping the 59-year-old Diess for the top job, Volkswagen would elevate a senior executive from its own ranks, while handing the reins to someone who was not at the automaker when the diesel cheating began. Diess joined VW from German rival BMW in mid-2015, shortly before the scandal erupted publicly. As the executive overseeing VW’s biggest unit, he has routinely butted heads with labor leaders while seeking to cut costs and simplify the carmaker’s Byzantine structure.
The supervisory board will meet Friday to sign off on the management changes, the people said.
While Mueller is a lifelong VW veteran, at times he cut an uneasy figure as CEO, which required him to manage the often contradictory demands of angry car owners, disgruntled investors, well organized workers, and state officials with their own political agendas.