Coverage: Volkswagen names Diess its new CEO

Volkswagen Group, the world’s largest automaker by sales volume, has appointed Herbert Diess as its new CEO to replace the executive who helped steer the company out of its diesel emissions scandal and into a new era of investment in electric cars.

Nathan Bomey of USA Today had the news:

CEO Matthias Mueller will relinquish his post and will be succeeded by Herbert Diess, who had been serving as CEO of the VW brand and has gained a reputation for cost-cutting at the sprawling company.

The elevation of Diess to the top job was widely expected after he helped reinvent the VW brand as a more profitable enterprise, though Mueller had been expected to serve for a longer period.

Mueller held the top job for more than 2½ years after succeeding CEO Martin Winterkorn, who was ousted days after the company’s diesel pollution scandal was exposed in September 2015.

Mueller charted a course toward a new era of multibillion-dollar investments in electric cars and SUVs, which surprised industry observers who identified VW with its diesel roots and small cars.

In the U.S., Diess steered VW toward new SUVs, including the recently introduced seven-passenger Atlas, which has been well received.

Jack Ewing of The New York Times reports that Diess is a relative newcomer to the company:

As a relative newcomer to the company, a former BMW executive who joined only two months before an emissions scandal erupted, Mr. Diess is not associated with the wrongdoing that continues to weigh heavily on the company’s image and finances, and that remains the subject of major criminal investigations by German and United States authorities.

That sets Mr. Diess apart from his predecessor, Matthias Müller. While Mr. Müller denies having known of illegal software that evaded emissions regulations, he held high-ranking positions at Volkswagen when the so-called defeat device was being developed and deployed.

But unlike Mr. Müller, who spent his whole career at Volkswagen and its subsidiaries before being ousted this week, Mr. Diess is an outsider. Named chief executive by the Volkswagen supervisory board at a meeting late Thursday, he must now show that he can navigate Volkswagen’s notoriously insular, hierarchical company culture.

Alanna Petroff of CNNMoney.com reported that the move is a clean break from the diesel scandal:

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.

Diess currently heads the firm’s namesake Volkswagen division, but now takes over a larger parent company that owns brands including Porsche, Audi, Bentley, Bugatti and Lamborghini.

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

Volkswagen admitted in 2015 it had rigged millions of diesel engines to cheat on emissions tests. The scandal sent its share price plunging, and caused consumers and regulators to reevaluate diesel technology.