Volkswagen names new chief executive in boardroom revamp

Unions will get a VW board seat if they agree to Herbert Diess as CEO

"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 worldwide 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. Excessive spending and poor budget discipline were eroding profit margins even before the carmaker's diesel-emissions scandal erupted in September 2015.

Mueller's contract as CEO at Volkswagen had been expected to run through the end of 2019, so a change now would represent a substantial reduction in his tenure at the head of the firm.

Shares in Volkswagen spiked earlier this week after the company said it was considering management changes.

The company announced Thursdaythat CEO Matthias Mueller was stepping down and will be replaced by Volkswagen brand chief Herbert Diess.

The 64-year-old Mr Mueller will be replaced before Volkswagen's annual general meeting on May 3, the Bild newspaper said yesterday.

Mueller, who has been in the top job for less than three years, took over the role as public outrage peaked over the company's diesel emissions scandal.

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Mr Diess, a former BMW executive who joined VW in July 2015, has clashed with the company's labour leaders.

"Diess will hold both positions, CEO of the company and the VW brand", one of the sources said, speaking on condition of anonymity because of the sensitivity of the subject.

But Diess, a lanky, cool-headed Bavarian, never got ruffled and ultimately secured a landmark deal that paved the way to cut as many as 30,000 jobs and save 3.7 billion euros ($4.6 billion). "Instead of being squeezed out, he has been pushed upward, and has been made CEO".

Including Mr Mueller, VW's management board totals nine people, with responsibilities ranging from purchasing to legal affairs to financing and human resources.

Kilian, who works directly under labour boss Bernd Osterloh, will replace personnel chief Karlheinz Blessing, the sources said, giving workers representatives a direct say on strategy and cost-cutting.

Diess's appointment comes two days after a company statement that was as surprising as it was cryptic, saying that Mueller had agreed "in principle" to contribute to a management change, without elaborating or mentioning his chosen successor by name.

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