Volkswagen CEO could be out in shock management shakeup

Volkswagen CEO could be out in shock management shakeup

Volkswagen's boss Matthias Mueller could be set to depart after the German vehicle giant said it was mulling a reshuffe of its top ranks, with VW brand chief Herbet Diess tipped as his successor. The 64-year-old Mueller's contract is due to run until 2020.

Volkswagen's board abruptly ended the tenure of Chief Executive Officer Matthias Mueller, a caretaker who revived the carmaker after its worst crisis on record, turning instead to a leader who can implement deeper changes, people familiar with the matter said.

The company said in its statement on Tuesday that it was considering changes to its complicated management structure.

The company said it was contemplating a management reshuffle and reassigning responsibilities among executives that "could include a change in the position of the chairman of the board of management", the German term for CEO.

Mueller has expressed frustration with the pace of Volkswagen's transformation and more recently about his ability to turn around the brand's image following revelations the company had tested toxic fumes on monkeys.

Mueller's possible replacement will likely face similar challenges to get Volkswagen's stakeholders to unite.

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VW said earlier Tuesday that it was considering a change in the CEO job.

Volkswagen's (VW) supervisory board will on Friday replace personnel chief Karlheinz Blessing with Gunnar Kilian, managing director of the carmaker's works council who works directly under labor boss Bernd Osterloh, four sources close to VW told Reuters.

The move would be a major concession by management to worker representatives, potentially handing labour leaders insight into management plans for investments and cost cutting plans.

"If Diess is confirmed as the successor, VW shares will extend their gains", Evercore ISI analyst Arndt Ellinghorst said, who has an "outperform" rating on the stock.

Business newspaper Handelsblatt reported that Herbert Diess, head of the VW brand - one of the group's 12 makes of cars, trucks and motorbikes - was slated to take Mueller's place. A veteran of the company, he had previously served as head of Porsche.

A Volkswagen spokesman declined to comment on the rumours when contacted by AFP.

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