Analysts have questioned whether newly hired Volkswagen CEO Matthias Müller will effectively navigate the automaker through a deepening scandal as more vehicles and more cheating is uncovered, Automotive News reported.
Müller, who took over as Volkswagen AG CEO from the top spot at Porsche, has yet to instill confidence in investors, according to analysts.
“It’s a like a virus that’s spreading,” Dave Sullivan, an analyst with AutoPacific, told Automotive News. “With every new bit of information that’s uncovered, it digs the knife in a little deeper and produces more doubt and skepticism that they have an understanding of how deep this crisis is.”
Müller was tabbed to replace outgoing CEO Martin Winterkorn after it became clear that the automaker would lose billions of dollars in the diesel scandal. On Sept. 18, the Environmental Protection Agency notified the automaker that 482,000 of its cars in the U.S. were illegally polluting and that the automaker had installed a “cheat device” to cover up its emissions.
Winterkorn apologized for the “defeat device” without acknowledging that he knew anything about it prior to the EPA’s notification and resigned from Volkswagen.
Volkswagen’s supervisory board hired away Müller from his top spot at Porsche, in part, to help the automaker recover from its widening, deepening scandal.
Müller promised transparency throughout the process, but the automaker has been slow to specify how it would fix its 11 million cars and the German transportation authority has ordered the automaker to speed up its recall.
“As far as the U.S. justice officials, it’s going to be much more difficult for Mueller to credibly lead Volkswagen’s efforts to uncover the fraud behind the scandal,” Ferdinand Dudenhoeffer, head of the Center for Automotive Research at the University of Duisburg-Essen in Germany, told Automotive News.
Since the scandal has initially developed, the EPA alleged this month that some Porsche models may have cheated emissions — something the automaker denied in September — and more Audi models have been added to the list.
Shortly after making the announcement Nov. 2, Volkswagen issued a statement denying its 3-liter diesel engines were cheating and the automaker would clarify with the EPA how those cars complied with emissions standards.
Müller was head of Porsche for six years before taking the top job at Volkswagen. If the allegations by the EPA are true, Müller could either have to acknowledge that he knew the Porsche cars were cheating or admit — similar to Winterkorn — that the company he ran for years operated without his direct supervision.
VW needs to hire a pretty female CEO. It worked for GM ;
Possibly, instead of a Male German, saying ” that is the orders I gave and they disobeyed me”
RobertRyan – came pretty close to Godwin’s law on that one Robert ;)
Germans, just following orders since 1933.
@Lou_BC,
Nearly touched base,but managed to avoid it
Say what you want about Barra and GM, when the lid was blown off on ignition switches they handled this a lot better.
* They ripped the Band-aid off on other issues, resulting in millions upon millions of recalls for vehicles far outside of the initial problem vehicles. Anyone with a Zeta body car can tell you the ignition key recall was completely ridiculous on those cars.
* They almost immediately threw under the bus, errr, fired a group of allegedly culpable engineers to sacrifice to the media bonfire
* They setup a victims fund for payout – you may go so what – if you understand bankruptcy law – they didn’t have to – they could have fought all claims under court as “old GM sorry” and been correct.
* They cast a wider net in the victim fund then they had to – compensated parties included a driver who committed suicide (note and all) and multiple drivers who were speeding, and/or drunk, or otherwise impaired and bore some responsibility for their actions
This isn’t defending the indefensible, but Barra came across as leading, VW continues to come across as obfuscating and unaware of the depth of the problems.
The two possibilities are:
* Management was so isolated due to plausible deniability that they really are that incompetent or…
* Management had to have know about cheating on this scale and is trying to figure out how to save their bacon
Either is a load of crap. I agree with others who said last week they’ll be studying this in business school. There are ways to handle a crisis (Tylenol) and there are ways to make it far worse (Firestone)
APaGttH – agreed.
VW doesn’t have a body count. That matters to sane people.
Agreed. Laws don’t matter unless someone dies.
Robbery? Battery? Assault? Did anyone die? No?
Well THEN WHO CARES, LIBRUL!!
CJinSD – “VW doesn’t have a body count. That matters to sane people.”
That all depends on whether or not you work with pulmonary disease or in cancer care.
But hey, pollution affecting health and climate is an artificial construct of the left.
(I just thought I’d preemptively insert your rebuttal)
Weeks ago when this broke I cited an EPA statistic from 2009 which stated 95% of NOx produced at the time came from power plants. This may have changed slightly since then but I doubt it. NOx from other sources is barely relevant to the health issue and VAG’s responsibility specifically is likely to be statistically irrelevant (maybe 1% or less)
28-Cars-Later – IIRC there are no coal fired power plants in BC. Some remote areas running on diesel gen sets. Since this story broke I have noticed quite a few VW diesels.
Fair enough, I can’t speak for Canada. Does you province receive NOx pollution from the prevailing winds?
VW had a good thing going for years and millions of vehicles. The good thing came to an end almost by serendipity. VW was asked for details prior to being made public and they postured and stonewalled.
Its naive to think that only a small group of engineers knew, that they were afraid to divulge reality to upper management. Its perhaps possible that a select few at the very top of the pyramid did not know, while everyone else knew, or had serious doubts about the miracle diesels.
They are still working on a potential fix, in the meantime in Canada they have raised the incentives on the various models they can sell, and sales were up 8% in October compared to the previous year.
Miracle Diesels, they maybe in the end, but small capacity , direct injection Gas engines,have been flagged as really bad as far as particulates .So they want to replace the diesels with these?
This is why I said they should have hired an outsider. And their choice only proves the protective nature of the VW machine.
VW made the similar mistake GM made. They both fixated on being the #1 volume company in the world. You produce crap when your focus is on volume. MacDonald’s and WalMart come to mind and are also faltering and trying to create a better image.
I agree but I’d point out Wal-Mart doesn’t really “produce” a product.
28-Cars-Later – true. They do have the size and clout to dictate what they are willing to sell.
I thought of them because I just finished reading a story about how both companies are struggling due to their cheap volume image and to a great degree are trapped by it.
VW focused on becoming #1 and along the way got lost. They definitely are not managing the current problem well. Their obfuscation will trap them and define their company for decades to come.
Could the company break up?
In a word No.
Profits slipping?!?!? DISCOUNTS!
How will that help profits, Sir?
We’ll make it up with volume!
Doesn’t that just mean they will have more vehicles to recall?
It worked so well for GM…too big too fail and all…and VW is BIG!
APaGttH – but would Germany bail out VW?
They weren’t willing to bailout Opel – but Opel is a bit player, and is about as German as Jaguar is British these days.
It is an interesting question – is the second largest car maker in the world “too big too fail.”
A VAG failure pulls down Audi and Porsche with it — I would think the EU would prop them up, the other alternative is millions of job losses (direct and indirect) in a region that can’t afford any further unemployment.