VW officially replaces Matthias Muller as CEO with brand head Herbert Diess

Volkswagen New Boss Is Herbert Diess

"He assumed the chairmanship of the Board of Management in the fall of 2015 when the Company faced the greatest challenge in its history", Hans Dieter Potsch, VW board chairman, said in a news release announcing the change.

Volkswagen will streamline into a more compact structure, and it's keeping "all options open" as it reviews which businesses to keep, Chief Executive Officer Herbert Diess told reporters Friday at company headquarters in Wolfsburg.

"Bringing Herbert Diess' CEO nomination forward is the next step in transforming VW into a more modern and effective company", Evercore ISI analyst Arndt Ellinghorst said in a note.

He assumes control from Matthias Mueller, who was designated in 2015 at the stature of the diesel emanations outrage.

The incoming group boss also said that the company's labor council, which represents the interest of the company's workers, was "fully committed" to the structural and operational changes. In 2015, Volkswagen admitted it had used special devices created to skew results on USA emissions tests. "Diess is a man of action, he is the most plausible choice at VW to lead the group into the next phase of its transformation", said Nord LB analyst Frank Schwope, who has a buy rating on Volkswagen. Mueller, 64, has steered the mammoth auto maker into a massive restructuring, aiming to offer electric versions of many of its models and slim down its operations over the coming decade.

A former executive with rival BMW, Diess joined VW only two months before the emissions cheating scandal broke in mid-2015 and is thus relatively untainted by the crisis.




However, in May 2017 prosecutors in Stuttgart said they were investigating Mr Mueller over suspicions he may have known about the diesel cheating before it became public.

Mueller followed a course toward a new era of multibillion-dollar investments in electric cars and SUVs, which surprised industry observers who identified VW with its diesel roots and small cars.

The carmaker remains mired in legal woes overseas and in its home market, where it also faces possible diesel bans in some smog-clogged inner cities, a prospect that has already depressed resale prices to the chagrin of millions of owners of diesel vehicles.

In addition to taking on the top job, the 59-year-old Austrian will stay on as VW brand chief and also be head of research and development.

Since then, Diess has worked to cut costs and increase profits at the core Volkswagen brand.

"Diess has no problem making enemies", the Sueddeutsche Zeitung daily wrote, recounting how the "tough-as-nails" executive drove a hard bargain with suppliers as head of purchasing at BMW. The last resigned after "diesel scandal".

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