VW Group ousts CEO, names Diess as replacement, announces restructuring

Herbert Diess

Volkswagen Group has ousted CEO Matthias Müller and replaced him with Herbert Diess, previously CEO of the Volkswagen brand within the larger 12-brand corporation. The move is part of an effort to reorganize the company to do business more efficiently, the company said.

VW Group will reorganized into six business areas and the China region, which is VW Group’s largest market. Its brands will be split into vehicle groups for Volume, Premium, and Super Premium nameplates.

“The Volkswagen Group’s goal is and remains to align the Company and its brands with future needs, to safeguard its position among the leaders of the international automotive industry with innovativeness and profitability, and to be instrumental in shaping tomorrow’s personal mobility with the strength of our Group brands,” said Chairman of the Supervisory Board, Hans Dieter Pötsch.

Matthias Muller

The change doesn’t come as much of a surprise, because the VW Group issued a statement on Tuesday saying it was in the process of reviewing its senior management structure, which it explicitly said could result in personnel changes.

Müller was named CEO in September 2015 after his predecessor, Martin Winterkorn, resigned within days of the Dieselgate scandal coming to light. Müller had previously served as the CEO of Porsche since July 2010. Under his leadership, VW Group made painful cuts to costs, invested in electrification and self-driving technologies, and managed to boost sales—all while dealing with the fallout of the emission cheating scandal that has cost the company more than $30 billion so far.

Müller, as well as other current and former VW Group executives, may still be under investigation by German authorities for their roles in the scandal.

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In addition to his role as Chairman of the Board of Management, Diess will be responsible for group development and research, as well as vehicle information technology. “In a phase of profound upheaval in the automotive industry, it is vital for Volkswagen to pick up speed and make an unmistakable mark in e-mobility, the digitalization of the automobile and transportation as well as new mobility services,” Diess said.

Oliver Blume, CEO of Porsche, joins the Group Board of Management, and takes on the responsibility for group production.

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