Published: Sun, April 15, 2018
Worldwide | By Sean Reid

Herbert Diess Joins Volkswagen As New Group CEO

Herbert Diess Joins Volkswagen As New Group CEO

VOLKSWAGEN has chosen Herbert Diess as its new chief executive in an overhaul that includes streamlining the company's multiple vehicle brands into just three groups while preparing its truck business for a potential listing.

The move is the biggest shake up of the German vehicle giant since the Dieselgate scandal back in 2015.

In this role, Muller will replace Herbert Diess, who was Chairman of the Volkswagen brand.

Muller, formerly the CEO of Porsche, took the helm of the group in the aftermath of the diesel scandal in 2015, in which the company had been found to be installing "defeat devices" in their cars to cheat emissions tests. It is a scandal that continues to plague VW in Europe.

The appointment of Diess comes as VW investors are demanding for increased profitability.

Diess, who has been head of the VW brand since moving from BMW in 2015, will also assume direct responsibility for research and development and vehicle connectivity.

"Matthias Müller has laid the groundwork for our transformation", said new CEO Diess.

Sanford Bernstein analyst Max Warburton said Diess' track record of cost-cutting points to a more efficient VW under his leadership. Luxury group Audi will be placed in a separate premium division and high-end brands Porsche, Bentley, Bugatti and Lamborghini in a super-premium group. The company sold 10.74 million vehicles in the year.

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"We will emphatically address the special challenges that lie ahead of us, especially in electromobility, digitisation and new mobility services", he told a press conference at the group's Wolfsburg headquarters.

Osterloh's comments come after repeated clashes over Diess's drive to cut costs and improve profits at the carmaker's core VW brand, where Diess was handed the reins only three months before the Dieselgate scandal erupted.

Reuters reported that Volkswagen will give labour leaders a management board seat as part of a broad agreement to win approval for Herbert Diess as the German carmaker's new chief executive, sources said.

The company said it would reorganise into six business areas and the China region to help it adapt "in a phase of highly dynamic change in the company and the entire automotive industry".

Chairman of the Supervisory Board Hans Dieter Pötsch, said: "We've already accomplished a great many things since Autumn 2015; we managed the greatest corporate crisis in its corporate history".

Its statement said the truck and bus division, the fourth business group, would be made ready for capital markets, a step that could include selling shares in the division, but did not detail the fifth and sixth business divisions.

Human resources head Karlheinz Blessing is being replaced by Gunnar Kilian, until now an official with the company's works council, or employee representatives.

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