Daily Management Review

Volkswagen Board Meeting to Choose New CEO and Axe Some Top US Officials of the Company


09/25/2015




Volkswagen Board Meeting to Choose New CEO and Axe Some Top US Officials of the Company
In an effort to show that it is acting decisively to end a crisis over its rigging of U.S. diesel emission tests and to install confidence among the investors and shareholders after the historic fall in its share prices, the Volkswagen board expected to name Matthias Mueller, the head of its Porsche division, as chief executive on Friday.

Martin Winterkorn, the former CEO of the company had resigned on Wednesday and said Volkswagen needed a fresh start and it is reported by Reuters that Matthias Mueller, the 62-year-old company veteran will be chosen at a supervisory board meeting to replace Winterkorn.

Reports also said that the head of the U.S. business of the company would be dismissed at the board meeting to be held at the German carmaker's Wolfsburg headquarters. The others top executives who are expected to be axed following the US emission crisis include the top engineers of its luxury Audi and Porsche brands and the head of brand development at its VW division, reported Reuters.

These are steps that the board of the company is possibly taking haste in an effort to show the world's largest automaker ,despite being under pressure, can get to grips with the biggest business-related scandal in its 78-year history.

There has been historic drop in the shares of the company to 40% of its value in the last week following the debacle and has written off tens of billions of euros off its market value since last Friday. This was the day when the US environment agency the company had admitted to programming diesel cars to detect when they were being tested and alter the running of their engines to conceal their true emissions.

On Thursday, Germany's transport minister had said that the company had also cheated on tests in Europe, where it enjoys higher sales than in the United States, and on Friday, the minister added that the light vans as well as cars of the company were affected by the scandal.

Similar investigations have been ordered in some other countries as well.

A drop in sales of diesel cars and tighter regulations is being feared by the wider car market which has also been has been rocked by the incident. On the other hand, the dealers and customers of Volkswagen are angry that the company has yet to decide on whether it will have to recall any cars.

"VW needs to be very open about what has happened, how it was possible that this could happen to make sure that this never happens again in the future. These are priorities that should override all other considerations at the moment," said a leading VW shareholder, underlining the importance of the meeting, reported Reuters

The task ahead for the new boss of the company would be enormous as the company had announced on Tuesday that some 11 million vehicles worldwide were fitted with the software that allowed it to cheat the U.S. tests.

Market analysts are hopeful that after the board meeting Volkswagen would announce which models and construction years are affected and whether cars will need to be refitted.

(Source:www.reuters.com) 






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