Any remaining obstacles standing between Hans Dieter Poetsch and his transition from VW Group Chief Financial Officer to Volkswagen Group Chairman were removed on 7 October with the appointment by a court in Braunschweig of Poetsch to the VW supervisory board. With that, VW’s supervisory board was able to elect its newest board member as its Chairman.
Having ignored the lessons of other corporate scandals of the recent past and the importance of plausible deniability, VW has now appointed two long-standing VW Group executives as Chief Executive and Chairman. Interestingly, both were previously championed by Ferdinand Piech; the former VW Group Chairman had openly spoken of Mueller as his preferred replacement for the then Chief Executive, Martin Winterkorn, while Poetsch has the backing of the wider Porsche family, which includes Piech. Winterkorn, gone after he took the fall for the diesel defeat device, had also supported the appointment of Poetsch.
Having ignored the lessons of other corporate scandals of the recent past and the importance of plausible deniability, VW has now appointed two long-standing VW Group executives as Chief Executive and Chairman
Winterkorn’s successor, Matthias Mueller, maintains that his predecessor was unaware of the use of a defeat device in diesel engine emissions testing. The investigation into who knew what and when continues, with high-level suspensions reportedly under way, but Mueller has been quoted as saying that he believes only a handful of Volkswagen engineers were aware of the illegal software.
Mueller’s time is currently occupied not only with planning how to lead the OEM through this crisis, but also with presenting his multi-pronged strategy – to management, to the workforce, to the press and to consumers.
That strategy includes a rethink of long-standing 2018 targets; a corporate restructure with emphasis on decentralisation; a recall timetable to begin in January 2016 and be completed by the end of the year; a new far-reaching cost-cutting initiative to fund that recall that will see the OEM postpone or cancel any unnecessary investments (raising questions about the future of models like the Phaeton, the future of certain brands and even the future of VW Group’s sports sponsorships); and Mueller is running a damage-limitation campaign to convince the automotive world and beyond that the VW Group and brands – and indeed the Made in Germany brand – can be trusted.
Trust is a word we hear time and again in association with this scandal, and Mueller needs to regain the trust not only of consumers, but more importantly of his workforce in the face of growing concern that cost-cutting means job cutting. This won’t be without pain, he’s conceded, and it will involve looking closely at every aspect of the business.
Is an organisation that is so desperately in need of independent external influence at the very highest level able to prove that it can turn itself around by appointing insiders to the two most senior roles?
Whilst Mueller operates as the new face of VW, enjoying a level of respect attributable to his earlier success as head of Porsche, it will be interesting to see what Poetsch can bring to the organisation as Chairman. For a start, a degree of calm – the role has been vacant since Piech stepped down in April; second, insider understanding and sensitivity – CFO since 2003, Poetsch understands the intricacies of the 12 brand organisation, and its relationship with workforce, unions, shareholders, government and numerous joint venture partners; and thirdly, continuity.
But the big question remains: is an organisation that is so desperately in need of independent external influence at the very highest level able to prove that it can turn itself around by appointing insiders to the two most senior roles?
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Martin Kahl is Editor, Automotive World
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