A mechanic from Porsche: who was assigned to clean Volkswagen's reputation

New Director of Volkswagen is the head of Porsche Matthias Mueller. Born in East Germany, an ambitious manager was able to bring the luxury car maker out of the crisis. Now he has to clean up the reputation of the entire Volkswagen Group.
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On Friday, the Supervisory Board of the Volkswagen Group (VW) unanimously approved Matthias Müller new Head of German auto giant. VW director general place remained vacant for at least two days: a long-term head of the group Martin Winterkorn announced his resignation on Wednesday. According to the newspaper Handelsblatt, previously on the candidate Muller 20 members of the Supervisory Board agreed to the evening of the next day.

"My primary task - to restore confidence in the Volkswagen Group and make this the best I can with the maximum transparency, and also to make the right conclusions from the current situation. Under my leadership, Volkswagen will make every effort to establish the most stringent monitoring and control standards in the automotive industry, "- presented in a press release words of the new VW CEO automaker.

Muller could become the head of Volkswagen in April: he was a protege of the former head of the supervisory board Ferdinand Piech in his struggle with Winterkorn. But then the Council refused to support its chairman and Piech left the company. Six months later, Muller has made a long-awaited increase, nduring this time the situation has changed dramatically in the company. Now his main task will be to restore the company's reputation after the grand scandal about the violation of environmental regulations and minimizing financial losses which threaten to VW.


Biographies Winterkorn and Muller - former and current directors of VW - have a lot in common. Both businessman work in group structures for over 30 years, both at different times led by specialized departments in the VW subsidiary companies. Winterkorn has worked in the department of quality control in the first Audi, then around the concern. Müller studied the development strategy of brands Audi, Lamborghini, and from 2007 to 2010 - all VW.

Muller biography from the beginning has been associated with the history of the automotive brand Audi. He was born in June 1953 in Chemnitz, which the authorities of the GDR shortly before it was renamed the Karl-Marx-Stadt. Father Siegfried Mueller worked for DKW - it is one of the four car brands, which formed in the prewar period brand Auto Union, and which subsequently evolved into the Audi.

primary industrye power DKW were in the suburbs of Chemnitz, that is the territory that has fallen in the Soviet zone of occupation. After the war, Audi launched the plant in a West Ingolstadt (Bayern) its line of vehicles under the brand name DKW, in the same factory in East Germany produced mainly motorcycles. Siegfried Müller in the East German DKW responsible for conducting motorcycle races and for a time was the technical commissioner of the race track Sachsenring.

After the Berlin crisis of the summer of 1953 (a popular uprising against the communist government, which was suppressed), Siegfried and his family moved to the west - in Ingolstadt. Own the refugee experience largely explains why, in September 2015, at the height of the migration crisis in the EU, Muller, Jr. was one of the first German manufacturers, who proposed the creation of jobs for Syrian refugees in the Porsche plant, says Handelsblatt. "I just want to let all people in the world have at least a hot meal and a good night's sleep. No one leaves their homeland willingly and with a light heart, "- he explained.

Mechanic from Porsche

As a teenager, Matthias Müller finished coursesAudi at the specialty mechanic-toolmaker, then trained at a specialist in the IT field at the Munich University of Applied Sciences, and in 1977 returned to Ingolstadt, starting work in the department of e-Audi group data. By age 30 Muller headed this department.

In the early 1990s, Audi leadership appointed him in charge of a production strategy. One of the first projects was the development of the former mechanic from scratch and setting the conveyor Audi A3, the first 20 years of Audi compact class. The commercial success of the new model has achieved largely due to its image of a sports car of the youth. In the future, Muller became responsible for the development strategy of sports brands of the VW Group (Audi, Lamborghini, Seat), and then for the entire Group Product Planning.

In October 2010, Mueller became CEO of Porsche. The company - a manufacturer of premium cars in that time was in the process of absorption of the concern VW and parallel trying to deal with the consequences of the global recession. The crisis has severely crippled Porsche: Porsche if the net profit in the 2007/08 financial year amounted to riversordnye € 6,4 billion, that in a year the company recorded a loss of € 3.6 billion. 2009/10, he was reduced to € 454 million.

Milch cow

As a specialist in product development, Mueller began his work with the company's lineup. Within two years, he updated the entire range of Porsche products, and in 2014 Concern has launched a new compact crossover Porsche Macan. The new policy has been successful: in 2011 Porsche's revenue increased by 18% to € 10.93 billion and net profit was € 1.46 Bln.

In recent years, the financial performance of the company steadily grow by 10-20% per year. In 2014, Porsche turnover amounted to € 17.2 billion (+ 20% in 2013), net profit increased to € 2,2 billion (+ 14%), while the number of cars sold rose by 17% to 190 thousand. Thus, Porsche brought 8% of revenues and 20% of the entire VW group profit for the previous year. "His business success Muller turned the Porsche's main cash cow of the largest automaker in Europe", - said the German edition of the NDR.

Results Porsche Mueller earned the favor of Ferdinand Piëch and his family - the descendants of Ferdinand Porsche owners and Group VW (50,73% of shares). Piech was dissatisfied with the pace of development of the group's business in the US and towards the spring of 2015 he tried to replace the then director general Winterkorn Mueller how his protégé, but to vote the board was defeated and had to leave VW. Triumph of control over the owners lasted five months before the start of the environmental scandal, which led to the departure of Winterkorn.

Global investigation

On the investigation of the VW became known on September 18 when the Environmental Protection Department of the United States reported that the world's largest automaker faces a fine of up to $ 18 billion for the sale of the country about 500 thousand. Vehicles that have installed does not match the standard software .

In the world of software, which presumably lowers the data on the real level of emissions, set at 11 million Volkswagen cars. Concern has reserved € 6.5 billion for the costs associated with bringing the device eliminates the need for environmental standards to the statutory parameters.

On the eve of EBokomissiya encouraged countries - EU member states to conduct their own investigation regarding VW cars, which could be equipped with a prohibited device. His test will also hold Japan, India and South Korea.

A separate joint investigation against the prosecutor's office launched VW 27 US states, said on the eve of AP referring to the Attorney General of Michigan Bill Shuette.

In Germany, the test will affect not only the VW, but other automakers, said the German Minister of Transport Alexander Dobrindt.

On the eve of the scandal with the German concern reacted rating agencies: Moody's downgraded on VW's credit rating to "negative», Standard & Poor's experts reported that studying the possibility of reducing the long-term VW rating (A / A-1) to one or two notches. Fitch placed the issuer default ratings (IDR) of the company on review for possible downgrade.

On appeal Merkel

Players of the Frankfurt stock exchange and have not waited appointment of a new head of the Group: Playground closed an hour before the adjournment of the meeting VW supervisory board. The day anderate the company lost in the price of 4.3%. For the whole week - from the beginning of the environmental scandal - the VW stock fell by 34%.

German Chancellor Angela Merkel urged the company, which for decades was considered the epitome of German engineering, to take urgent steps to restore its credibility. The scandal forced the leadership of the group to make organizational conclusions and make personnel decisions. "We insist on these measures in the coming days they will be announced," - he said the Bavarian media member of the Supervisory Board of VW Olaf Lies.

However Winterkorn resigned leave three leading engineering concern. At this present management of the company. Their positions will leave Ulrich Hackenberg, Chief Engineer of the Audi (considered to be the developer of modular VW production system, which has helped the concern to reduce production costs), Wolfgang Hats, head of the R & D department the Porsche, and Heinz-Jakob Noysser, director of VW R & D, writes WSJ citing informed sources.

Moreover, his position will be deprived of the head of the US division VW Michael Horn. It can replace Winfried Faland, head podkontrlkogo VW Czech automaker Škoda, who had previously also headed investment "daughter» Volkswagen Group China division.

Experts believe that now for Muller is vital to remember their crisis management skills. "The next 12 months or so Muller is" problem-solvers ", he will gain credibility within the company and embody the upgrade process for third-party observers", - quotes Bloomberg Bankhaus Metzler analyst Juergen Pieper. According to him, the concern need governance reform, particularly decentralization. "Muller has to figure out how to break with the culture of bureaucracy in VW, - agrees Lynn Wooten from the University of Michigan. - Then employees can directly claim the problems are not afraid to disrupt the timing or miss market share. "