Volkswagen CEO's Surprise Motto for Workers: Have Some Fun

Matthias Mueller Gives First Q&A Since Emissions Scandal Broke

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Matthias Müller
Matthias Müller Credit: Volkswagen AG
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Volkswagen CEO Matthias Mueller had a surprise motto in store for the embattled carmaker after reporting its first loss in more than 15 years: It should be a fun place to work again.

In his first public question-and-answer session since a diesel-emissions cheating scandal swept out his predecessor a month ago, Mr. Mueller laid out a new business strategy and a fresh code of conduct that breaks with the style of the old guard.

Mr. Mueller said Volkswagen will take a hard look at the 300 models it produces to decide if they make sense. By the middle of next year, he'll draft a plan through 2025, saying Europe's largest carmaker can no longer be "steered by yesterday's principles and structures."

In a thinly veiled swipe at his detail-obsessed predecessor, Martin Winterkorn, Mr. Mueller said he won't get involved in the minutiae of product design, a task he said is not the job of the board and should instead fall to the divisions as part of a new culture of empowerment and decentralization.

Mr. Mueller's first public interaction with investors came after the company reported an operating loss of 3.48 billion euros ($3.86 billion) in the third quarter after setting aside 6.7 billion euros to cover repairs tied to rigged diesel engines. The CEO was flanked by his new finance chief, Frank Witter, as analysts grilled them on a wide range of topics, from provisions to corporate strategy and the business outlook.

"Of course this isn't something you can impose top-down; this has to be organic," said Mr. Mueller, who -- unlike Winterkorn's public utterances -- spoke English on the conference call. "But as I told my management team quite frankly, we simply need to get on with it. Things will only change if we as leaders bring a new spirit of openness and cooperation to life," he said, adding that the measures will make the company "more fun to work for."

Executives did not discuss marketing plans on the call.

Max Warburton, an analyst for Sanford C. Bernstein, was critical of the presentation, stating in a report that "VW appears to have little of note to tell us today about its diesel emissions crisis. There's nothing new on the real extent of the problem, nothing new on likely actions and nothing new on likely costs."

He added: "The conference call – including a fleeting appearance by new CEO Mueller – was largely pointless, with management's evasiveness aided and abetted by some unusually toothless questioning from much of the analyst community."

Some of the toughest questioning came from a Financial Times reporter, who asked executives why VW had not sent a top executive from its German headquarters to the U.S. Mr. Witter responded that "we have a very senior officer over there, Michael Horn and he is of highest regard within the organization and outside." Mr. Horn is the president and CEO of Volkswagen Group of America. Mr. Witter added: "You can be assured, once conditions have been ready and prepared. Mr. Müller is also planning together with other senior executives to travel to the United States."

While Mr. Mueller has routinely thanked Mr. Winterkorn for his contributions to Volkswagen's growth, the new CEO has been keen to set himself apart from the style of his predecessor, who was notorious for berating employees for perceived shortcomings and keeping managers on a short leash.

Mr. Mueller said he will evaluate each of the group's car models, which range from Lamborghini sports cars and ultra- luxury Bentley sedans to little Seat and VW-brand hatchbacks. While the company considered lumping together the Volkswagen, Seat and Skoda brands, Mr. Mueller said the board ultimately decided to keep them separate.

The CEO dropped off the call to join German Chancellor Angela Merkel on a trade trip to China. He will brief her on the diesel scandal, which affects some 11 million cars worldwide. To investors, Mr. Mueller promised toughness. At least six managers have been suspended so far. "We will be ruthless in punishing those involved," Mr. Mueller said. "And we will be comprehensive in learning from it so something like this never happens again."

Bloomberg News with contributions from Ad Age.

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