Volkswagen Ousts CEO. The move comes nearly three years after Volkswagen admitted to rigging 11 million diesel-powered vehicles to cheat on emissions tests..Todd Horwitz, Bubba Trading

 

BIG CHANGES AT VW

Volkswagen AG’s board ousted Chief Executive Matthias Müller and replaced him with Herbert Diess, who quietly orchestrated a boardroom coup while he was rebuilding the company’s namesake brand. The move comes nearly three years after Volkswagen admitted to rigging 11 million diesel-powered vehicles to cheat on emissions tests, sparking a large recall and criminal prosecutions, while costing the company more than $25 billion in fines, penalties, consumer compensation and legal fees.

The global auto industry is undergoing big changes. Ever tougher emissions regulation is driving the development of electric cars, and technology companies are moving into the core business of conventional auto makers. “My most important task will now be to join with our management team and our group workforce in consistently pursuing and pushing forward our evolution into a profitable, world-leading provider of sustainable mobility,” Diess said in the statement.

Diess’s appointment to succeed Matthias Mueller, who steps down immediately, will be key to reassuring investors that the highly centralized German industrial behemoth is capable of reform. Excessive spending and poor budget discipline were eroding profit margins even before the carmaker’s diesel-emissions scandal erupted in September 2015. His term will be judged early on by whether he can scale up his revamp of the VW brand to the entire 12-brand group to prepare for an era of battery-powered self-driving cars.

One sign of the overhaul gaining traction is VW entering the home stretch for a potential share sale in its heavy-truck division, the biggest organizational shift since the aftermath of the diesel-emissions crisis. The unit, which shares little or no overlap with the manufacturer’s other divisions, will change its legal structure to prepare its access to capital markets, VW said in a separate statement. Granting the truck unit more independence from the larger passenger-car business marks the culmination of efforts by division chief Andreas Renschler. He’s worked since 2015 on welding the commercial-vehicle operations more tightly together to reducing costs by sharing development.

Keep those stops tight
Todd “Bubba” Horwitz

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Todd Horwitz - Author of “Average Joe Options“. Todd began his trading career in 1980 at the CBOE. He was one of the original traders in the OEX & helped start the SPX. He is a member the CME where he trades S&P futures as well as foreign currencies & is a regular contributor to CNBC, Bloomberg, BNN, Fox & many other major news networks.