Volkswagen names Herbert Diess as new CEO

Unions will get a VW board seat if they agree to Herbert Diess as CEO

Unions will get a VW board seat if they agree to Herbert Diess as CEO

German business newspaper Handelsblatt and national news agency DPA reported 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.

Senior works council members previous year had their salaries cut and bonuses suspended after public prosecutors investigated alleged overpayments at the carmaker, a move that labor leaders are blaming on Blessing, one source said.

But Diess, a lanky, cool-headed Bavarian, never got ruffled and ultimately secured a landmark deal that paved the way to cut as many as 30,000 jobs and save 3.7 billion euros ($4.6 billion).

Mr Diess, previously head of Volkswagen cars division, joined VW Group from BMW just months before the "dieselgate" scandal broke in 2015.

However, in May 2017 prosecutors in Stuttgart said they were investigating Mr Mueller over suspicions he may have known about the diesel cheating before it became public. For years, Volkswagen lied through its teeth to regulators and customers both at home and overseas about how clean its diesel cars were. "Unions and Lower Saxony together have the power to block his appointment".

Volkswagen is due to discuss a stock market listing for its truck and bus division at a supervisory board meeting tomorrow, two people close to the carmaker said, in another move aimed at creating a more focused business.

The automaker's share price has since recovered, but some lawsuits are still pending.

Volkswagen on Tuesday issued a cryptic statement saying Mueller has "showed his general willingness" to contribute to changes to the CEO job as part of a review of the group's management structure.

But the tug of war between its controlling families, unions and other stakeholders has made it hard to drive through structural changes that investors have said are key to the company fulfilling its potential.

It is not clear to what extent any restructuring plans for the Volkswagen Group - which includes the VW, Audi, Seat and Skoda brands - will be decided at the board meeting, expected to start at 1500 GMT and last late into the night.

"Matthias Müller has done outstanding work for the Volkswagen Group", said Hans Dieter Potsch, chairman of the supervisory board.

"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, who has a buy rating on Volkswagen.

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