Annual Media Conference of Volkswagen AG in Wolfsburg. Matthias Mueller, CEO of Volkswagen AG, during the press conference. In the background lettering Volkswagen.
Matthias Mueller, CEO of Volkswagen at a press conference at the automaker's headquarters in Wolfsburg, Germany, March 14, 2017. Ulrich Baumgarten—Getty Images

Volkswagen’s CEO Says Changing the Automaker’s Corporate Culture Is ‘Not an Easy Undertaking’

May 23, 2017

Volkswagen 's top executive said some managers are resisting the German carmaker's push for a new era of accountability after its emissions fraud, suggesting it could still take years to establish a new corporate culture.

The drive by the world's largest automaker to become more transparent and decentralize power is seen by investors as a key part of its campaign to regain trust following its admission in September 2015 that it cheated on U.S. diesel emissions tests.

But efforts to convince people in Volkswagen 's (vlkpf) broad middle management of the need to change are still proving tough 20 months after dieselgate broke, said chief executive Matthias Mueller, who became CEO of Volkswagen in September 2015.

"There are definitely people who are longing for the old centralistic leadership," Mueller said during a discussion with business representatives in Hanover late on Monday. "I don't know whether you can imagine how difficult it is to change their mindset."

After Porsche's ill-fated attempt in 2008-09 to take over VW, it took him three years to establish a new culture at the sports-car maker with its then 12,000 workers and shift the focus back to product, Mueller said of his time as Porsche CEO.

"Of course there are anxieties, it's not an easy undertaking" to overcome VW's long tradition of management hierarchies, he said. "The only question is how long will it take?"

Separately, Mueller criticized practices of U.S. ride-hailing firm Uber as VW is stepping up efforts to compete in the market for on-demand transportation with its new digital division MOIA.

"I would not want us to be compared culturally with Uber," the CEO said, calling Uber a company that is simple in its structure. "That is no role model for us."

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Mueller reiterated his doubts about a business case for producing battery cells in high-cost Germany even as VW is pondering such a move with a new research facility in Salzgitter.

"Of course we will at some point need many such factories (to mass produce battery cells) around the world," he said. "But if energy costs in Germany are what they are, then they (factories) will not be based in Germany."

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