Could Growing Volkswagen Scandal Engulf New CEO Mller?

Analysts have questioned whether newly hired Volkswagen CEO Matthias Müller will effectively navigate the automaker through a deepening scandal as more vehicles and more cheating is uncovered, Automotive News reported.

Müller, who took over as Volkswagen AG CEO from the top spot at Porsche, has yet to instill confidence in investors, according to analysts.

“It’s a like a virus that’s spreading,” Dave Sullivan, an analyst with AutoPacific, told Automotive News. “With every new bit of information that’s uncovered, it digs the knife in a little deeper and produces more doubt and skepticism that they have an understanding of how deep this crisis is.”

Müller was tabbed to replace outgoing CEO Martin Winterkorn after it became clear that the automaker would lose billions of dollars in the diesel scandal. On Sept. 18, the Environmental Protection Agency notified the automaker that 482,000 of its cars in the U.S. were illegally polluting and that the automaker had installed a “cheat device” to cover up its emissions.

Winterkorn apologized for the “defeat device” without acknowledging that he knew anything about it prior to the EPA’s notification and resigned from Volkswagen.

Volkswagen’s supervisory board hired away Müller from his top spot at Porsche, in part, to help the automaker recover from its widening, deepening scandal.

Müller promised transparency throughout the process, but the automaker has been slow to specify how it would fix its 11 million cars and the German transportation authority has ordered the automaker to speed up its recall.

“As far as the U.S. justice officials, it’s going to be much more difficult for Mueller to credibly lead Volkswagen’s efforts to uncover the fraud behind the scandal,” Ferdinand Dudenhoeffer, head of the Center for Automotive Research at the University of Duisburg-Essen in Germany, told Automotive News.

Since the scandal has initially developed, the EPA alleged this month that some Porsche models may have cheated emissions — something the automaker denied in September — and more Audi models have been added to the list.

Shortly after making the announcement Nov. 2, Volkswagen issued a statement denying its 3-liter diesel engines were cheating and the automaker would clarify with the EPA how those cars complied with emissions standards.

Müller was head of Porsche for six years before taking the top job at Volkswagen. If the allegations by the EPA are true, Müller could either have to acknowledge that he knew the Porsche cars were cheating or admit — similar to Winterkorn — that the company he ran for years operated without his direct supervision.