Porsche CEO Matthias Mueller is about to take over Volkswagen as its new CEO. Mueller will help lead the troubled automotive company through the crisis as it works to recover from its recent emissions scandal.
Former CEO Martin Winterkorn resigned on Wednesday.
A veteran of the auto industry for four decades, Mueller will have his hands full in repairing Volkswagen’s image. The company is undergoing a sweeping overhaul, with looming changes throughout the company.
So far, Audi development chief Ulrich Hackenberg and Porsche development head Wolfgang Hatz have been fired. Hackenberg controlled Volkswagen’s brand development from 2007 to 2013, while Hatz was in charge of the company’s motor development from 2007 to 2011. Their departures come as no surprise, since the Volkswagen vehicles involved in the scandal spanned from 2009 to 2015.
Volkswagen United States brand chief Michael Horn is also on his way out. Before being let go, Horn took the opportunity to apologize.
“We have totally screwed up,” he said.
Winfried Vahland is set to take Horn’s place as brand chief. Vahland currently runs Škoda Auto.
It is highly likely that many more top executives within the company will be shown the exit as well. Additionally, they might face criminal charges.
Volkswagen was recently exposed for installing cheating devices in its diesel vehicles in order to make the cars appear to be compliant with emissions standards, when they really weren’t. More than 11 million vehicles worldwide were affected.
So far, Volkswagen has lost $22.4 billion of its market value.
Mueller will have to be particularly savvy with the public, as the image of the company is in tatters. Working to repair it will not be an easy task.
Automotive analyst Juergen Pieper said, “For the next 12 months or so, he’ll be a problem-solver who’ll have to credibly drive this process internally and represent it publicly.”
Mueller is no stranger to dealing with tough crowds. While with Porsche, Mueller used to attend classic car conventions to connect with automotive purists and justify his company’s decision to expand into mainstream segments. Profits rose by 62% during his four years at Porsche.
As for the financial side of things, Volkswagen shares are making the slow recovery process. After the stock saw a disastrous loss of 35% over Monday and Tuesday, it gained as much as 4.3% near the end of the week.
Meanwhile, the rest of the automotive industry is coming under public scrutiny. All 28 members of the European Union have been urged to launch investigations of their own. Additionally, Japan, India, and South Korea have announced that they will look into the situation as well.
In the United States, individual states are looking into the scandal, with many sending subpoenas to Volkswagen. The states are pursuing charges on the grounds of consumer-protection and environmental laws. The United States Justice Department has already launched a criminal investigation.
Volkswagen has already hired Kirkland & Ellis to represent the company in its legal affairs. Kirkland & Ellis is the same law firm that led BP through their oil spill fiasco. The company has also requested local prosecutors in Germany to start a criminal investigation, a clear way to show the public that the company wants to move forward and take responsibility for its actions.
For now, Matthias Mueller is excited about his latest opportunity.
“It won’t be boring in our business,” he said.