Mueller's short term
Mueller, who has held the CEO post for less than three years, is stepping down immediately.
Diess’s appointment will be key to reassuring investors that the highly centralized German industrial behemoth is determined to reform itself. Excessive spending and poor budget discipline were eroding profit margins even before the automaker’s diesel-emissions crisis erupted.
His tenure will be judged early on by whether he can scale up a revamp of the VW nameplate to the entire 12-brand group and prepare for an era of battery-powered and autonomous vehicles.
The former BMW AG executive, who joined VW just a few months before the emissions violations came to light, pledged from the beginning to pursue new technology while reining in spending growth. That project became much more urgent as the diesel scandal generated massive costs, and meant taking on established interest groups.
Bernd Osterloh, the company’s powerful labor leader, balked at negotiating with him during tough contract talks in 2016, but Diess prevailed with a landmark deal that paved the way to cutting as many as 30,000 jobs and saving 3.7 billion euros ($4.6 billion).
One sign that the VW Group's overhaul is gaining traction is the potential share sale of its heavy-truck division, the biggest organizational shift since the aftermath of the diesel-emissions crisis. The unit, which shares little or no overlap with the manufacturer’s other divisions, will change its legal structure to prepare its access to capital markets, VW said in a separate statement.
Granting the truck unit more independence from the larger passenger-car business marks the culmination of efforts by division chief Andreas Renschler. He’s worked since 2015 on welding the commercial-vehicle operations more tightly together to reduce costs by sharing development.
The realignment of VW’s brands focuses power in Diess’s hands.
“My most important task will now be to join with our management team and our Group workforce in consistently pursuing and pushing forward our evolution into a profitable, world-leading provider of sustainable mobility,” Diess said in company's statement.
Although specific details of Volkswagen AG’s new senior management roles won’t be available until Friday, the company did make some things clear. Rupert Stadler, the embattled head of Audi, was given responsibility for sales for the entire Volkswagen Group, while Oliver Blume, head of Porsche, was put in charge of group production and will join the group’s management board, the company said.
Diess, Stadler and Blume will also take charge of the new volume, premium and super premium groups, respectively, VW said, without giving more details.
Volkswagen is also making a change in its purchasing operations. The company said Francisco Javier Garcia Sanz, its head of procurement, is leaving the company “at his own request.” Sanz played a pivotal role as the automaker wound its way through the diesel emissions violations. He is to be replaced, at least temporarily, by Ralf Brandstätter, who oversees procurement for the Volkswagen brand, the company said.
Other appointments announced Thursday by the automaker include Gunnar Kilian, from the company’s works council, as group head of human resources, succeeding Karlheinz Blessing, who will be available as a consultant until his contract expires.
As head of purchasing at BMW, Diess was instrumental in the luxury brand’s ability to weather the financial crisis by squeezing more than 4 billion euros out of supply costs. He then took charge of development, but was ultimately passed over for the CEO job, when the company picked Harald Krueger in December 2014. That spurred his move to Volkswagen.
The appointment of Diess was cheered by analysts.
"Diess is a man of action; he is the most plausible choice at VW to lead the group into the next phase of its transformation," said Nord LB analyst Frank Schwope.
Diess’s appointment comes two days after a company statement that was as surprising as it was cryptic, saying that Mueller had agreed “in principle” to contribute to a management change, without elaborating or mentioning his chosen successor by name.
The supervisory board plans a press briefing on Friday to outline the company's management and operating changes, and strategy.
Bloomberg, Reuters and Larry Vellequette contributed to this report.