FILE - In this Jan. 15, 2018 Volkswagen brand Chairman Herbert Diess speaks at the North American International Auto Show in Detroit. The supervisory board of the German car maker is convening Thursday, April 12, 2018 to discuss a new leadership structure. (AP Photo/Tony Ding, file)

Volkswagen replaces CEO Mueller, announces new structure

April 12, 2018 - 3:01 pm

FRANKFURT, Germany (AP) — Volkswagen replaced CEO Matthias Mueller with core brand head Herbert Diess on Thursday and said it is creating a new management structure to enable faster decision-making as autonomous and electric cars transform the industry.

The German automaker said in a statement that it would group all its brands and management functions into six broad business areas plus China. It said the new structure would streamline decision-making in the individual operating units as the company deals with a rapidly shifting business environment.

Diess is a former BMW executive who since 2015 has headed the core Volkswagen brand.

The company also is replacing its heads of human resources and purchasing. Porsche sports car division head Oliver Blume was promoted to the top management body of the entire group.

Mueller, who formerly headed Porsche, took over as CEO unexpectedly in September 2015 when Martin Winterkorn resigned over the company's scandal over cars rigged to cheat on emissions tests.

He led the company through the aftermath of the scandal and turned in record sales and strong profits in 2017. The company sold 10.74 million vehicles and made 11.6 billion euros in profit.

Board Chairman Hans Dieter Poetsch said Muller had done "outstanding work" at a time when the company "faced the greatest challenge in its history."

Conventional carmakers such as Volkswagen are racing with industry outsiders such as Waymo and Uber to dominate new ways of getting around, such as autonomous taxis and car-sharing services in which people use vehicles only when they need them instead of owning.

The new structure will include dividing Volkswagen's 12 brands into three groups: volume products, premium and super premium. The company makes mass-market cars under the Volkswagen, SEAT and Skoda brands, luxury cars under the Audi nameplate and very high-priced vehicles under the Lamborghini and Bentley brands.

Its statement said the truck and bus division would be made ready for capital markets, a step that could include selling shares in the division.

Diess would not only head the management board, the top executive body at German companies that reports to the supervisory board, or board of directors. He would also have charge of vehicle development and research, and vehicle-related information technology, a key aspect in autonomous mobility and services offered through smartphone apps.

Diess was the subject of speculation as a possible successor to Winterkorn when he arrived at Volkswagen from BMW less than three months before Winterkorn's sudden departure left the company looking for a new CEO.

The board of directors turned to longtime company employee Mueller, who started at Audi in 1978. Since coming to Volkswagen in July, 2015, Diess has had the difficult task of negotiating restructuring and cost cutting with German worker representatives as head of the core Volkswagen nameplate.

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