The German carmaker is poised to replace group Chief Executive Matthias Mueller with the head of its core brand, Herbert Diess as it aims to boost efficiency amid a post-dieselgate strategic shift, sources said on Tuesday.
The 64-year-old Mueller, always a reluctant CEO who had grown tired of the regular grillings by board members, responded during the talks by signaling he was prepared to step aside, they said. The scandal has cost the company over $30 billion. It comes just a few weeks after Mueller presided over improved earnings, with operating profit excluding special items past year rising to 17 billion euros ($21 billion).
Mr. Müller promised to change Volkswagen's corporate culture to be less authoritarian and less prone to the kind of behavior that led to the emissions cheating and other scandals.
Previous executives who attempted deeper cuts in VW's homeland, including Bernd Pischetsrieder and Wolfgang Bernhard, were forced out of office or stifled in their reform efforts.
Markets reacted positively as both Porsche's and Volkswagen's shares rose by more than 4 percent shortly after the first reports of the looming management reshuffle.
Chairman Hans Dieter Poetsch is now in talks about changing the structure with fellow supervisory board members and members of the management board, Volkswagen said.
"These changes could include a change in the office of chief executive officer (CEO)", a statement by the Wolfsburg-based company read.
"If Diess is confirmed as the successor, VW shares will extend their gains", Evercore ISI analyst Arndt Ellinghorst said, who has an "outperform" rating on the stock. According to the company, final decision is expected to be made by the end of the week.
The issue with restructuring VW lies with a tug a war between interested parties including the controlling families, stakeholders, and unions. CEO of the group - has showed his general willingness to contribute to the changes.
Volkswagen (VOWG_p.DE) will give workers a management board seat to try to secure agreement for a far-reaching reform of the company under a new chief executive, sources familiar with the matter said on Wednesday.
Including Mueller, VW's management board totals nine people, with responsibilities ranging from purchasing to legal affairs to financing and human resources.