BUSINESS

Matthias Mueller, Porsche Executive, Named Volkswagen's New CEO

09/25/2015 03:06 EDT | Updated 09/25/2015 03:59 EDT

BERLIN — Volkswagen's board appointed Matthias Mueller, the head of the group's Porsche unit, as CEO on Friday — handing a longtime company insider the task of trying to lead the world's top-selling automaker past a growing emissions-rigging scandal.

The company also said it was suspending some employees and would reorganize its North America operations after admitting it had cheated on diesel car emissions tests in the U.S. through a piece of software.

The decisions come after the previous CEO, Martin Winterkorn, quit the job this week over the scandal, which has damaged the company's reputation and threatens its business.

The company faces fines and class action lawsuits that could cost it billions. It will also have to fix software it has said is in some 11 million cars worldwide, way more than the 482,000 identified last week by U.S. authorities.

"I am taking on this task at a time in which our company faces unprecedented challenges,'' Mueller, 62, said at Volkswagen's headquarters in Wolfsburg, Germany. "I have respect for this, but I am also facing this task with confidence.''

"I will personally do everything to win back the trust of our customers, our employees, our partners, investors and the whole public,'' he said. "We stand by our responsibility. Occasionally, our and your patience will be tested, but ... carefulness is even more important than speed.''

"What is decisive is that nothing like this ever happens at Volkswagen again,'' he said. "So we will introduce even tougher compliance and governance standards in the company.''

He pledged to make Volkswagen an "an even stronger company.''

Winterkorn, who had been CEO since 2007, said he took responsibility for the "irregularities'' found by U.S. inspectors in VW's diesel engines, but insisted he had personally done nothing wrong.

Volkswagen offered few new details Friday on the fallout from the scandal.

"The supervisory board has, on the basis of current information, recommended suspending some employees immediately until the whole case is cleared up,'' acting board chairman Berthold Huber said. "This has in part already happened.''

He did not elaborate, and a statement from Volkswagen did not specify who the employees were, at what level or where they worked.

Mueller brings long-standing experience of several of Volkswagen's 12 brands to his new job at the head of a sprawling group that has nearly 600,000 employees worldwide.

He was an apprentice toolmaker at Audi between finishing high school and studying computer science at Munich's University of Applied Sciences. Mueller returned to Audi in 1978 and worked his way up to become head of product management for Audi, Seat and Lamborghini.

In 2007, Mueller became head of product management for the Volkswagen Group. He has been Porsche chief executive since 2010 and a member of parent Volkswagen's management board since March.

Alongside Mueller's appointment, the supervisory board also approved changes to the management structure — aimed, the company said, at scaling back complexity and strengthening brands and regions.

That includes a reorganization of the North America business under Winfried Vahland, until now chairman of the board of directors at Czech-based brand Skoda.

The company said Michael Horn will remain as president and CEO of Volkswagen Group of America, but its U.S, Canada and Mexico markets will be "combined and significantly strengthened'' to form a new "North America region.''

Huber said the board would task a U.S. law firm with helping investigate the scandal. He didn't say who that would be.

He also offered another apology.

"In the name of the supervisory board, I apologize in every way to our customers, the public, the authorities and investors,'' he said. "I ask all of you: Give Volkswagen a chance to make good the damage and win back lost trust.''

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