2018-04-10 09:41:08
Volkswagen Considers Replacing Chief Executive After Diesel Scandal

FRANKFURT — Volkswagen said on Tuesday that it was considering replacing Matthias Müller as chief executive as it grapples with a long-running diesel emissions scandal that has cost it billions of dollars, led to the imprisonment of two executives, and scarred the German carmaker’s reputation.

Mr. Müller, who took over after the company admitted in September 2015 that it had cheated on diesel emissions tests, has steadfastly denied any knowledge of the deception. The cheating involved the installation of illegal software in 11 million Volkswagen diesel vehicles, playing a major role in creating a serious air pollution problem in Europe.

Mr. Müller, 64, an auto manager of the old school who spent his entire career at Volkswagen and its subsidiaries, struggled to move the company beyond the scandal, which was costly both to its reputation and to its bottom line.

And while he insisted he had no knowledge of the cheating, he was a high-ranking executive involved in product development at the same time that Audi and Volkswagen were concocting the illegal software and deploying it in vehicles. Mr. Müller also worked closely with some of the people under investigation over possible involvement in the emissions conspiracy.

In a statement, Volkswagen said it was considering “a further development of the management structure of the group,” which could “include a change in the position of the chairman of the board of management.”

If Mr. Müller leaves, as seems all but certain, the most likely front-runner to replace him appears to be Herbert Diess, a member of the management board who is in charge of Volkswagen brand cars.

A former BMW executive, Mr. Diess joined Volkswagen shortly before the emissions cheating became public in September 2015 and carries less baggage. At the same time, he would satisfy Volkswagen’s longtime preference for choosing chief executives from its own ranks.

The scandal, and Volkswagen’s continued vulnerability to it, came into renewed focus after The New York Times reported in January that the company had helped to finance experiments on monkeys in a bungled attempt to show that exhaust from modern diesels was benign.

The experiments, in which monkeys were forced to breathe diesel fumes at a lab in Albuquerque, caused a furor in Germany and elsewhere. Chancellor Angela Merkel condemned the research, the German Parliament debated possible consequences, and animal rights activists demonstrated outside Volkswagen’s headquarters in Wolfsburg.

Mr. Müller promised to change Volkswagen’s corporate culture to be less authoritarian and less prone to the kind of behavior that led to the emissions cheating. At the same time, he presided over a management board still dominated by people who, like himself, were products of that culture.

Critics said that, as a longtime insider, Mr. Müller lacked the credibility needed to force change within Volkswagen.

Volkswagen’s stock price rose almost 5 percent, to 172 euros, or about $211, per share, on the news of Mr. Müller’s potential departure. They are about 2 percent higher than their value when the company made its diesel admission in 2015.

The emissions scandal has had wide-ranging impacts beyond the company.

For one, it has contributed to increased wariness of diesel. The fuel had been seen as more environmentally friendly than gasoline because it emits lower levels of greenhouse gases, but it nevertheless spews out poisonous nitrogen oxides. As a result, cities across Europe have taken steps to restrict the use of diesel vehicles in urban centers, and sales of diesel cars have slowed dramatically across the region.

The diesel cheating and its aftermath has also focused attention on the tight links between Germany’s political elite and the auto industry. Carmakers employ around 800,000 people in Germany and are the country’s highest-value export. But as politicians in Berlin have refused to crack down on car companies, voters have increasingly seen them as complicit with the industry.