Volkswagen AG will hire Porsche’s Matthias Mueller to succeed Martin Winterkorn as CEO after the latter resigned yesterday amid the cheating scandal plaguing the German manufacturer, Reuters learned.
What’s more, three top executives have been fired by the supervisory board including Ulrich Hackenberg, head of research and development at Audi, Wolfgang Hatz, who holds the same title at Porsche, and Michael Horn, CEO of Volkswagen USA. Both Hackenberg and Hatz had held senior posts at VW in development before they switched to Audi and Porsche.
Mueller, 62, was the clear frontrunner to replace Winterkorn, whose fate was sealed when news broke out that the company had used special software in diesel vehicles. He has a majority on the 20-member supervisory panel, a source told Reuters, although Volkswagen refused to comment.
Is Mueller the right man for the job?
"He is a good choice even though he may be seen as a transitionary CEO until another internal candidate such as VW brand CEO Herbert Diess has earned their stripes," said Arndt Ellinghorst, an analyst at Evercore ISI investment banking advisory firm.
Of course, Mueller inherits the unenviable role of rescuing Volkswagen AG out of its colossal misery, which means regaining the trust of customers and investors (VW has lost more than 40% of its stock since last Friday) while restoring the image of the company.
Making things even worse than they already are, Germany's transport minister, Alexander Dobrindt, revealed today that Volkswagen manipulated tests in Europe in addition to the U.S.
A $90 million exit bonus for Winterkorn?
Before resigning, Winterkorn took responsibility for the scandal while at the same time denying any wrongdoing on his part. Yet, France’s Le Monde newspaper reports that he could be given a whopping exit bonus of nearly €60 million (approx. $90 million). Try not to swallow your tongue, there.
How is that possible? Well, according to Volkswagen AG’s 2014 financial statement, Winterkorn is entitled to a €28.5 million retirement plan… regardless of the conditions of his departure. Plus, he has negotiated his exit and could receive the equivalent of two years’ salary, or about €30 million when all the benefits are included. The fallen big wig may even get to keep his corporate vehicle!
Still, the supervisory board has yet to confirm the reason of Winterkorn’s departure, and if it turns out that he left after committing a serious offense, he could wind up with nothing at all.
Dieselgate rages on, and we’ll keep bringing you the latest news over the next few weeks and months.