Coverage: Volkswagen to vote on new CEO

As the fallout surrounding its emissions scandal continues to grow, Volkswagen is taking its first real steps at recovery by appointing a new CEO. The current frontrunner for the job is Matthias Müller, who is the current head of Porsche, a VW subsidiary.

Mark Thompson and Chris Liakos of CNN Money set up Friday’s news:

A week after the company was found to have falsified U.S. pollution tests on half a million VW and Audi diesel cars, its directors meet Friday to name a new CEO.

Martin Winterkorn stepped down as head of the world’s biggest automaker Wednesday in the wake of the shocking admission that it may have manipulated emissions data for as many as 11 million vehicles worldwide.

Volkswagen programmed software to make the cars appear cleaner than they were when being tested. Once on the road, they would pump out up to 40 times the allowed level of nitrogen oxide.

Winterkorn, who claimed to know nothing about the cheating, apologized twice and said he was stunned by the scale of the misconduct. The company has been forced to set aside 6.5 billion euros ($7.3 billion) to cover the cost of the scandal, and the final bill could be many times that.

For Volkswagen, the appointment of a new CEO will represent just the first step in its attempt to recover.

The Wall Street Journal’s William Boston and Hendrik Varnholt discussed how the appointment of a new CEO is bittersweet for some at VW:

The management upheaval is a bitter victory for Ferdinand Piëch, scion of Beetle inventor Ferdinand Porsche, who was forced in April to resign as chairman in the wake of a failed attempt to oust Mr. Winterkorn.

“Ironically, Piëch finally gets what he was aiming for, a new CEO. Unfortunately, it needed an expensive external catalyst,” said Arndt Ellinghorst, an analyst at Evercore ISI research group.

He said Mr. Müller is a “good choice” albeit likely a transitional figure while other internal candidates have time to prove their mettle.

“Our company was dishonest with the EPA, the California Air Resources Board, and with all of you,” Michael Horn, head of VW’s U.S. business told customers and dealers in New York on Tuesday. “We screwed up.”

This week, the company’s top shareholders and labor leaders on the supervisory board forced Mr. Winterkorn to resign. People familiar with the situation said three of the company’s most senior engineers have been asked to turn in their resignations.

They include Ulrich Hackenberg, the chief engineer at Audi who is widely considered the father of VW’s modular manufacturing system which has helped cut production costs, Wolfgang Hatz, the research and development chief at Porsche, and Heinz-Jakob Neusser, a development chief who once designed engines for Porsche, people familiar with the situation said.

Mr. Hatz and Mr. Hackenberg were key allies of Mr. Winterkorn, the people said.

The three didn’t respond to requests for comment.

Jack Ewing and Melissa Eddy of The New York Times discussed VW’s lead candidate for the job, Matthias Müller:

Volkswagen is expected to name a new chief executive on Friday to replace Martin Winterkorn, who resigned on Wednesday in the face of a widening emissions scandal that has engulfed the automaker.

A leading candidate is Matthias Müller, who is in charge of the division of Volkswagen that makes Porsche sports cars, according to people close to the company’s supervisory board, which meets on Friday. But those people said it was too early to confirm that a decision had been made.

Mr. Müller, 62, leads a division that is untouched by revelations that VW used software in diesel cars to fool emissions tests in the United States. Porsche, along with the Audi division, accounts for most of the parent company’s profit.

The board that oversees the management of Volkswagen, the world’s largest automaker, is also expected to announce further management changes as the company tries to quell the growing outcry over the deception.

CNBC reporter Kalyeena Makortoff explained the difficulties that Müller would face if given the job today:

Embattled German carmaker Volkswagen is scheduled to announce its next chief executive Friday to replace Martin Winterkorn who stepped down following revelations over the auto giant’s manipulation of emission tests for its diesel cars.

One of the frontrunners for the job is Matthias Mueller, president and CEO of Volkswagen’s subsidiary Porsche.

The 62-year-old has been in the Volkswagen fold for years, working under the Audi brand from 1977 after studying information technology and toolmaking in his native Germany. At Audi, he headed up system analysis, product management and later the Lamborghini product line, before moving to Volkswagen’s Wolfsburg headquarters to lead VW’s projects department.

At Porsche, which he has led since 2010, Mueller is credited with helping deliver record revenue and profit, with deliveries jumping 17 percent in 2014 from a year earlier.

If successful, Mueller faces a tough job at the at the helm: Volkswagen will now try to navigate its way through civil suits and multi-national investigations over allegations it deliberately tricked regulators who were testing emissions levels on diesel vehicles issued between 2008 and 2015.