Porsche boss set to take over as Volkswagen CEO

Porsche chief Matthias Mueller (left) - seen in a 2012 photo with Mr Martin Winterkorn in a Porsche Boxster S sports car - has been named by Volkswagen's board to replace Mr Winterkorn as CEO. The latter was forced to resign.
Porsche chief Matthias Mueller (left) - seen in a 2012 photo with Mr Martin Winterkorn in a Porsche Boxster S sports car - has been named by Volkswagen's board to replace Mr Winterkorn as CEO. The latter was forced to resign.PHOTO: EUROPEAN PRESSPHOTO AGENCY

Mueller faces challenge of rebuilding trust after carmaker admits rigging emission tests

FRANKFURT • Volkswagen is set to appoint Porsche brand chief Matthias Mueller as its new chief executive and announce the departure of top executives in a sweeping overhaul to begin repairing the carmaker's image tarnished by rigged emissions tests.

The 62-year-old Porsche chief would take charge as Volkswagen seeks to regain the trust of consumers and regulators after admitting to rigging engines to circumvent pollution controls.

A 20-man supervisory board voted to name Mr Mueller, a company veteran of four decades who enjoys the support of the family that controls VW as well as the carmaker's influential labour leaders.

Audi development chief Ulrich Hackenberg and Porsche development head Wolfgang Hatz are among those who will leave.

Mr Hackenberg, a confidant of former CEO Martin Winterkorn, was previously responsible for VW brand development and Mr Hatz ran the firm's motor development.

Mr Mueller has run the maker of the 911 sports car since October 2010. Like his predecessor, he is a long-serving Volkswagen employee, joining the Audi division as a toolmaking apprentice in the early 1970s.

To repair VW's image, he will have to move quickly to get into the public's eye.

"For the next 12 months, he'll be a problem-solver who'll have to credibly drive this process internally and represent it publicly," said Mr Juergen Pieper, a Frankfurt-based analyst at Bankhaus Metzler.

VW's admission, that millions of its "clean diesel" cars have software intended to cheat emission tests, has wiped about €20 billion (S$32.1 billion) off the firm's market value this week.

Mr Mueller has experience dealing with critical audiences. As Porsche boss, he attended classic-car events to connect with purists and justify expanding into mainstream segments with models like the Macan compact SUV.

Under his watch, profit rose 62 per cent over four years, and deliveries are on track this year to surpass 200,000 vehicles for the first time.

To succeed, he will also have to dismantle "Fortress Wolfsburg", Mr Pieper said, referring to the carmaker's centralised oversight, which funnels decisions through its headquarters.

"The challenge will be how to break up a bureaucratic culture so that people can speak up when there's a problem, even if it means they won't meet a deadline and they won't make market share," said Professor Lynn Wooten, associate dean at the University of Michigan's Ross School of Business.

"How do you rebuild that reputation now and change the culture at the same time? That's going to be the two major challenges."

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A version of this article appeared in the print edition of The Straits Times on September 26, 2015, with the headline 'Porsche boss set to take over as Volkswagen CEO'. Print Edition | Subscribe