Matthias Müller becomes CEO of troubled Volkswagen Group

Posted on 26 Sep 2015 by Michael Cruickshank

Following a company meeting on Friday, Matthias Müller has been appointed as the new CEO of Volkswagen (VW) Group effective immediately.

Müller took over this role following the resignation of the former CEO, Martin Winterkorn, who resigned on Wednesday.

Winterkorn’s resignation came in the face of a depending scandal related to allegations that VW had cheated on emissions tests in the US.

Matthias Müller was previously the Chairmain of Porsche AG, a VW subsidiary, and will remain in this position until a replacement is found.

“My most urgent task is to win back trust for the Volkswagen Group – by leaving no stone unturned and with maximum transparency, as well as drawing the right conclusions from the current situation,” remarked Müller in a statement.

“Under my leadership, Volkswagen will do everything it can to develop and implement the most stringent compliance and governance standards in our industry.”

In addition to this leadership change, VW plans sweeping structural reorganization across the entire company, with a new management model hoped to be in place by 2016.

11 million vehicles affected by scandal

The ongoing scandal VW faces regarding the use of so-called ‘defeat devices’ – specialized sensors which would detect when a car was undergoing emissions testing and change its engine output – has continued to worsen this week.

While the US EPA claimed that 480,000 cars were affected by this issue, VW has since reportedly revealed that up to 11 million cars globally could contain the ‘defeat device’ software.

Responding to this, the company announced that it had earmarked €6.5bn ($7.27bn) to deal with the associated costs of this scandal, a move which sent its share price tumbling.

European response

With one of the most well-known European brands now tarnished, the EU is scrambling to deal with the fallout from this scandal.

European Commission Vice President Frans Timmermans reportedly called on Volkswagen to come clean. “We have to stop fraud, and that’s why we have to get to the bottom of this,” he said according to Reuters.

He also announced that the EU could change its laws to introduce stricter emissions tests.

Meanwhile fellow European car manufacturers BMW and Daimler have distanced themselves from the issue, saying their diesel-powered vehicles comply with US clean air rules.