WOLFSBURG, Germany – Volkswagen’s effort to fix its emissions scandal will be largely led by company insiders. Some experts say it’s the only way, given the German carmaker’s unusually complicated structure and power groups.
Others, however, argue the company is just compounding its risks if it does not bring an outsider to change its ways.
Volkswagen has named a new CEO and chairman since the scandal became known Sept. 18. Both are longtime employees.
The effort to find the guilty and prevent a recurrence is in the hands of new CEO Matthias Mueller, who has been with the group for almost three decades. Mueller, who previously led Volkswagen’s highly profitable Porsche brand, took over when Martin Winterkorn resigned.
The new board chairman, Hans Dieter Poetsch, had been chief financial officer since 2003. There’s no indication he knew about the decision to cheat on the U.S. diesel emissions tests with software installed in engines. But he was a member of the top management team in place when the cheating took place, a group of executives that hasn’t yet been formally cleared of involvement.
Mueller has promised a new, more open approach.
The question is, will Volkswagen identify the guilty – but miss the chance to change the culture that enabled the scandal in the first place? Volkswagen can be a complicated place to figure out.
The billionaire members of the Piech and Porsche families collectively control a majority of the voting rights through their holding company, Porsche Automobil Holding SE. They include Ferdinand Piech, who served as CEO from 1993 to 2002 and only left the board chairmanship in April.
And the local government and unions hold a lot of power, too.
Lower Saxony, the Germany state where Volkswagen’s Wolfsburg headquarters is located, holds a 20 percent voting stake, giving it the legal right to block plant closures. Employee representatives by law hold half of the board seats, and can also veto important decisions.
Dirk Toepfer, a member of the parliament of Lower Saxony, presents a commonly heard argument in Germany: that the peculiarities of Volkswagen mean company veterans are best positioned to lead the cleanup.
“Volkswagen is a different world,” says Toepfer. “That means this enterprise functions under different rules than other enterprises. That’s why they need someone that knows the structure.”
“Someone who comes completely from the outside and doesn’t know how the rules of the game go will fail at the cleanup.”
The management under Winterkorn also has been criticized as overly opaque and hierarchical. Employee representative Bernd Osterloh lamented last month the need for “a culture in which it’s possible and permissible to argue with your superior about the best way to go.”
Some question whether pressure to meet Volkswagen’s target of passing Toyota as the world’s largest car maker led people to cut corners. Volkswagen achieved that goal in the first half of this year, just before the scandal broke out.
Toepfer acknowledged that the inside-outside question has two sides: “Before it’s known who was involved and how, there’s the danger that those put in charge of clarifying matters were involved themselves.”
