As the Volkswagen diesel scandal grew, it cost long-time CEO Martin Winterkorn his job. VW’s board assumed that the head of its Porsche division, Matthias Müller, could replace Winterkorn and regain the trust of employees, shareholders and consumers. Müller was given the job as chief executive officer of VW in September.
He now may face being pushed out after less than a year, due to accusations by New York State that Müller knew Audi was building cars that did not have engines that would meet U.S. clean emissions standards when he was an executive at VW’s luxury division.
As the Daily Mail reported regarding the suits by New York State and Massachusetts:
While Volkswagen has previously blamed lower-level executives, the suits claim that a ‘willful and systematic scheme of cheating’ had been created, and point fingers at Volkswagen CEO Matthias Müller.
Müller has done several things to reverse the slide of VW. He dumped many of the company’s most senior management. He readily admitted that “rules were broken and boundaries overstepped … it’s very painful and we apologize sincerely.” He approved a settlement with the EPA that would address the problem in the United States via a $15 billion set aside to buy back diesel cars or compensate owners for the lost value of their vehicles.
Müller also began to retool VW’s long-term future as he set the company’s overall goal to be a major power in the electric car business. Under his “Strategy 2025,” VW plans to create more than 30 new electric models. In spirit, the clean energy of the future would replace its “clean energy diesels,” which were never clean at all.
VW’s board faces a deep problem, one nearly as troubling as what brought Müller to his job. If the largest car company in Europe, and a leader in the Chinese market, is to recover even close to rapidly from a debacle that will affect its brand for years, it cannot afford to have a CEO who might have had knowledge of the misleading engineering, particularly nearly a decade ago. It cannot have a CEO who faces believable accusations by the State of New York.
Müller could well be out of a job less than a year after he took it.
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