LDN - Business

Lower Saxony premier candidate calls for outsider as next VW boss

[September 06, 2017] By Andreas Cremer and Jan Schwartz

HANOVER, Germany (Reuters) - Someone from outside the auto industry should succeed Volkswagen chief executive Matthias Mueller, the man expected to lead the German state which is the carmaker's second-biggest shareholder told Reuters on Wednesday.

Investors are calling for more outside expertise on VW's management and supervisory boards to help clear up the German company's damaging diesel emissions scandal and help speed a shift to electric cars and new mobility services.

Mueller, whose contract expires in 2020, came from within the VW ranks and such a pedigree has long been a hallmark of the company's CEOs. But the tradition has been questioned following the emissions scandal that erupted two years ago on the watch of Martin Winterkorn, a long-serving VW insider.

Mueller, 64, said earlier this year that VW is likely to pick his successor from within its own ranks. The previous head of VW's Porsche brand has been with the German group for four decades and became its CEO a week after dieselgate broke, forcing Winterkorn to resign.

"Perhaps it is good after all to pick someone who is completely unstressed by all conceivable automobile scandals but who still has an affinity towards this important industry," Bernd Althusmann said, without suggesting names.

Althusmann's comments follow the news that current Lower Saxony Premier Stephan Weil, whose SPD party is forecast to lose the next regional election in October, allowed Volkswagen to vet a speech he made about the diesel scandal.

The 50-year-old Althusmann is the leading candidate for Chancellor Angela Merkel's conservative CDU party in a state election it is expected to win on Oct. 15, which would likely make him state premier and a member of VW's supervisory board.

"There are for sure highly qualified personalities in German industry who would be capable of leading such a company," Althusmann said, adding he may use his voice on the board to push for an external CEO.

"I see by no means an obligation to select a home-grown manager ... there should really be a serious search for a personality who further expands this global player," he said.

OUTSIDE CHANCE

Outsiders taking top positions at major carmakers is not new.

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A Volkswagen logo is pictured at the newly opened Volkswagen factory in Wrzesnia near Poznan, Poland September 9, 2016. REUTERS/Kacper Pempel/File Photo

Fiat Chrysler CEO Sergio Marchionne lacked engineering experience and ran a Swiss testing and certification firm before taking the helm at Fiat, while Ford's previous CEO Alan Mullaly joined from planemaker Boeing.

VW's unions favor an insider for the top job, given the carmaker's peculiar ownership structure, with the Porsche and Piech families together commanding 52 percent of VW voting rights and Lower Saxony controlling a further 20 percent.

Lower Saxony owns an 11.8 percent stake in VW and controls 20 percent of the voting rights in the world's largest carmaker.

Althusmann said he will not sell down the state's capital stake should the CDU win the vote, but he wants to cede one of two seats to a non-political expert and hire a specialist at the chancellery in Hanover to handle matters related to VW.

"We will have to act much more professionally on the supervisory board," he said, adding that investors, who have long criticized the close collaboration between Lower Saxony and the unions as obstacle to structural change, should not expect miracles from a possible CDU-led government.

"I have already spoken with everyone at the plants including (works council boss) Bernd Osterloh, therefore I'm counting on good ties with the works council," Althusmann said.

A poll by opinion research institute Infratest Dimap conducted between August 18 and 26 put the CDU in Lower Saxony at 39 percent, compared with 31 percent for the ruling Social Democrats (SPD), with the Free Democrats, Greens and the anti-immigration AfD party at 8 percent each.

(Reporting by Andreas Cremer and Jan Schwartz; Editing by Georgina Prodhan and Alexander Smith)

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