Volkswagen is set to replace its chief executive, Matthias Müller, due to the diesel emissions scandal that has cost the car manufacturer billions of dollars, led to the imprisonment of two executives, and ruined the German carmaker’s reputation.
Two people with knowledge of the situation told the New York Times that Herbert Diess, who is in charge of the company’s flagship Volkswagen brand, was likely to succeed Müller. The company said earlier on Tuesday that it was considering a leadership change, and a final decision was expected by the end of the week.
In the statement, Volkswagen said it was considering “a further development of the management structure of the group,” which could “include a change in the position of the chairman of the board of management,” referring to Müller.
Political leaders are currently pressing the German carmaker to compensate diesel owners who bought cars that turned out to be dirtier than advertised, which could add to the already huge cost of the scandal.
Müller, 64, took over Volkswagen days after it admitted in September 2015 that it had cheated on diesel emissions tests, installing illegal software in 11 million vehicles.
He succeeded in preventing a collapse of sales and profits. But Müller, who has spent his entire career at Volkswagen or its subsidiaries, struggled to deliver on his promise to remake the company’s solid foundation.
However, the carmaker has continued to suffer blows to its reputation, including revelations in January that it had financed tests on monkeys in an attempt to show that diesel exhaust was not as dangerous as it once was.
“This is a chance for Volkswagen to make a change,” said Christian Strenger, the former chief executive of Deutsche Bank’s wealth management division, who is suing Volkswagen because he said it violated its duty to shareholders by failing to be forthcoming about the emissions scandal.
Diess has led Volkswagen’s push to mass produce electric cars, which are seen as essential to the company’s ability to defend itself against challengers like Tesla, Uber and Google that are trying to upend the auto industry.
German prosecutors have not charged anyone in the Volkswagen case, but they expect to complete their investigation this year.
Two former Volkswagen executives are currently serving prison sentences in the US after pleading guilty to charges including conspiracy to violate the Clean Air Act.
Müller was a high-ranking executive involved in product development at the same time that the company was developing the illegal software and deploying it in vehicles, however he has insisted he was ignorant of any wrongdoing, but he has faced the accusation that he was part of a system that allowed it to take place.