Published: Sat, April 14, 2018
Money | By Armando Alvarado

Volkswagen's new CEO says to consider asset sales

Volkswagen's new CEO says to consider asset sales

Muller, formerly the CEO of Porsche, took the helm of the group in the aftermath of the diesel scandal in 2015, in which the company had been found to be installing "defeat devices" in their cars to cheat emissions tests.

VW administrator Hans Dieter Poetsch said in an announcement that Mr. Mueller had done "extraordinary work" for the organization.

The scandal surrounding the Volkswagen associated with intentional understatement of the level of harmful emissions from diesel engines, has erupted in the fall of 2015.

Newly named Volkswagen CEO Herbert Diess (center) speaks at a technology conference in Germany past year.

VW said that Diess will oversee group development and vehicle IT while Rupert Stadler will handle group sales, Oliver Blume group production, company IT by Frank Witter, and procurement and components will be combined into one entity.

VW's goal is "to safeguard its position among the leaders of the worldwide automotive industry with innovativeness and profitability", said supervisory board chairman Hans Dieter Poetsch.

The Volkswagen Group is in the process of completely revamping its corporate structure, splitting its impressive brand portfolio into three segments - Volume, Premium and Super Premium - in order to streamline its decision-making processes and make the company more agile.

The volume business will include the VW brand, Seat and Skoda, as well as light commercial vehicles.

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Diess made the disclosure at his first news conference as chief executive at VW's headquarters in Wolfsburg, Germany, on Friday.

The company said it would reorganise into six business areas and the China region to help it adapt "in a phase of highly dynamic change in the company and the entire automotive industry".

Mr Mueller had been running Porsche before being elevated to replace Martin Winterkorn as VW chief. Mueller had been tapped as CEO unexpectedly in September 2015 when Martin Winterkorn resigned over the scandal in which the company had rigged carts to cheat on USA emissions tests.

"The group has fundamentally realigned and repositioned itself for it 2025 strategy".

Analysts welcomed the appointment of Diess, a former BMW (BMWG.DE) executive who has more than doubled profitability at the VW brand since taking charge in 2015.

"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.

Diess appears to have an appetite for change, having warned employees in 2016 that "in its current form, our company is not sustainable".

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