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VW Group restructuring in response to emissions testing scandal; greater focus on the modular toolkits; Klinger out, Horn stays

Following its appointment of Matthias Müller as the new CEO of the Group (earlier post), the Supervisory Board of Volkswagen AG approved a new management structure for the Group and the brands as well as for the North America region. The changes follow in the wake of the diesel emissions testing scandal that led to the resignation of former CEO Martin Winterkorn.

The interim Chairman of the Supervisory Board, Berthold Huber, said that the new structure strengthens the brands and regions; gives the Group Board of Management the necessary leeway for strategy and steering within the company; and lays a focus on the targeted development of future-oriented fields.

Reorganization of the North America region. The markets in the US, Mexico, and Canada will be combined and significantly strengthened to form a new North America region. Effective 1 November, the Group’s activities in the region will be led by Prof. Dr. Winfried Vahland, formerly Chairman of the Board of Directors at Škoda, who in this new role becomes a member of the Volkswagen brand Board of Management. Prof. Vahland’s successor as Chairman of the Board of Directors at Škoda will be Bernhard Maier, until now Board Member for Sales and Marketing of Porsche AG. Michael Horn remains President and CEO of Volkswagen Group of America.

At Group level the management structure will be oriented even more systematically to the modular toolkits. These toolkits (Baukasten) feature standardized technical components for each automotive vehicle segment (volume, premium, sport and commercial vehicles).

Consequently, a Porsche brand group with Bentley and Bugatti will be established for the sportscar and mid-engine toolkit. (MSB) The toolkit strategy will come under the even closer guidance of the Group CEO; a separate department will be set up for this purpose.

The Audi brand group (MLB evo) with Lamborghini and Ducati will be continued as will the Truck Holding, and the Power Engineering and Financial Services business lines. The volume brands Volkswagen (with principal responsibility for the modular transverse toolkit MQB), SEAT, and Škoda will be represented by one member each in the Group Board of Management.

New Group functions for efficiency and future-oriented fields. Group functions will concentrate more closely on efficiency and future-oriented fields; the Group will establish organizational units—for example, for Group product strategy, new business fields, cooperations and holdings, connected car activities, and CO2 reduction. A Chief Technology Officer will analyze and, if necessary, co-steer technical developments throughout the Group as mandated by the Group Board of Management.

At the same time, existing corporate bodies, structures and processes will be streamlined at Group level, in particular by strengthening the brands and regional accountability. To that end the Volkswagen brand will introduce a management structure with four regions, each led by a local CEO with a direct reporting line to the brand Chairman, Herbert Diess.

Streamlining the Group Board of Management. The production department at Group level, until now led by Thomas Ulbrich in an interim capacity, will be abolished with immediate effect. This is one consequence of delegating responsibility to the brands and regions.

Going forward, the brands and regions will also have greater independence with regard to production. So it follows that they should also hold the responsibility for these activities.

—Berthold Huber

The interim Supervisory Board Chairman emphasized that “one key point is that we are scaling back complexity in the Group. In recent weeks, we have already undertaken important steps such as separating Group and brand functions.” He said the developments of the last few days had underscored the urgency of this project: “We will not lose any time. The new management model will be implemented at the beginning of 2016.” This would bring the Board greater freedom to address urgent issues concerning Group strategy, development and steering.

Further Board of Management changes. The Supervisory Board extended the contract with Francisco Javier Garcia Sanz, Member of the Board of Management of Volkswagen Aktiengesellschaft with responsibility for Procurement, by five years.

Christian Klingler (47), member of the Board of Management of Volkswagen Aktiengesellschaft with responsibility for Sales and Marketing and member of the Volkswagen brand Board of Management with responsibility for Sales and Marketing, is leaving the company with immediate effect as part of long-term planned structural changes and as a result of differences with regard to business strategy. This is not related to recent events, the Group said. The new CEO Matthias Müller will head the Sales department at Group level in an interim capacity until further notice.

Jürgen Stackman, previously Chairman of SEAT, will take over Christian Klingler's function as a member of the Volkswagen brand Board of Management. Stackman is succeeded by Luca de Meo, currently Audi AG Board of Management member for Sales and Marketing. These personnel changes become effective from 1 October.


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