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Former VW Brand Boss Herbert Diess is Volkswagen Group’s New CEO

Matthias Müller is out

Matthias Müller is out

Confirming speculation from earlier in the week, Volkswagen appointed Herbert Diess as its new CEO at a board meeting on Thursday. He replaces Matthias Müller, who stepped up to lead Volkswagen through the dark days of dieselgate after a management shakeup.

Diess served as the head of the Volkswagen Passenger Cars brand since 2015. During this time, he was known for securing a deal that would streamline VW’s operations as it shifts to an electrified future. That deal cut many jobs but promised to save the company billions of euros. Before joining VW, Diess worked for BMW from 1996 in various positions, including as leader of the company’s purchasing network. Here, he slashed supply costs by more than 4 billion euros.

Diess’ predecessor, Müller, has led Volkswagen since the fall 2015. His tenure began when Martin Winterkorn resigned amid the huge scandal that involved VW installing cheat devices on millions of diesels to help skirt emissions controls. Müller made it his top priority to win back trust for the Volkswagen Group. He has been with the company since the 1970s, and just prior to his appointment as top dog at Volkswagen, he led the Porsche brand from 2010.

Matthias Müller

Two days ago, Volkswagen confirmed there would be changes to the company’s board of management. The company hinted at Müller’s exit, and cryptically, said he “showed his general willingness to contribute to the changes.”

In a statement today, chairman of the Supervisory Board Hans Dieter Pötsch said Müller “has done outstanding work for the Volkswagen Group.” Specifically, he praised Müller’s work in helping VW recover from dieselgate. “Not only did he safely navigate Volkswagen through that time; together with his team, he also fundamentally realigned the Group’s strategy, initiated cultural change and, with great personal commitment, made sure that the Volkswagen Group not just stayed on track but is now more robust than ever before,” said Pötsch. In addition to announcing a new CEO, Volkswagen said it was reorganizing itself into six business areas and the China region.

It’s unclear exactly what’s going on, but Bloomberg provides a few more answers. Unnamed sources told Bloomberg that VW didn’t view Müller as the right person to take on big changes the company is planning to make. As VW was figuring out what to do, Müller agreed to make room for a new CEO, the sources said.

As Bloomberg points out, Diess remained relaxed when asked tough questions related to the future of diesel while Müller gave only curt answers to the press at the recent Geneva auto show. As Bankhaus Metzler analyst Juergen Pieper said to Bloomberg, Müller “has displayed a certain weariness about his post.”

Müller’s resignation is effective immediately. Now, Diess will be charged with leading VW in its goal of introducing 15 new electric vehicles by 2025.

Source: Volkswagen, Bloomberg