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Volkswagen gets new boss before radical changes

Wolfsburg, Germany – Volkswagen replaced general manager Matthias Mueller with chief brand chief Herbert Diess and says he is creating a new administrative structure to allow for faster decision making as electric and autonomous automobiles transform the industry .

VW said on Thursday it would reorganize its management into six broad business areas plus China, to streamline decision-making in individual operating units.

Diess, 59, is a former BMW executive who since 2015 has headed the main Volkswagen brand. Mueller, who previously headed Porsche, assumed the position of CEO unexpectedly in September 2015 when Martin Winterkorn resigned over the company's scandal over rigged cars to cheat the emissions tests.

He led the Wolfsburg-based company after the scandal and became record sales and solid profits in 2017. The company sold 10.74 million vehicles and earned € 11.6 billion (R174 billion) in profits.

Board Chairman Hans Dieter Poetsch said Mueller, 64, had done "outstanding work" at one point, the company "faced the biggest challenge in its history."

Conventional car manufacturers such as Volkswagen compete with industry outsiders such as Waymo and Uber to master new forms of travel, such as autonomous taxis and car-sharing services where people use vehicles only when they need them instead of owning them . Volkswagen has established a service company, Moia, and plants to produce more models powered by battery.

Three groups of brands

The new structure will include three groups of brands: volume, premium and super premium products. The company produces high-volume cars under the brands Volkswagen, SEAT and Skoda, luxury cars under the Audi brand and very low-priced vehicles under the Lamborghini and Bentley brands.

According to his statement, the truck and bus division is the fourth group, it would be ready for the capital markets, a step that could include the sale of shares in the division, but did not detail the fifth and sixth business divisions.

Diess will not only head the board of directors, the highest executive body in German companies that report to the supervisory board, or board of directors, but will also be in charge of vehicle development and research, as well as related information technology with vehicles.

Diess was the subject of speculation as a possible successor to Winterkorn when he arrived at BMW's Volkswagen, less than three months before Winterkorn's sudden departure left the company in need of a new CEO in a hurry. The board of directors turned to Mueller, a long-time employee of the company, who started at Audi in 1978.

Since his arrival at Volkswagen in July 2015, Diess had the difficult task of negotiating the restructuring and cost reduction with representatives of the German workers as head of the Volkswagen central identification plate.

More changes

The company made other changes to the main publications. He said that the head of purchases, Francisco Javier García Sanz, left at his own request and that his position would be occupied by the head of purchases of the Volkswagen brand Ralf Brandstaetter.

The head of human resources Karlheinz Blessing is being replaced by Gunnar Kilian, until now an official of the works council of the company or representatives of the employees. In addition, the head of the sports car division of Porsche Oliver Blume is being promoted to the senior management of the entire group.

Volkswagen is controlled by the Piech and Porsche families, who hold 52 percent of the voting rights. Other major shareholders are the German state of Lower Saxony, where Volkswagen has its headquarters, with 20 percent of voting rights, and Qatar Holding with 17 percent.


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