Newsmaker: Volkswagen boss Martin Winterkorn
Published 07/09/2015 | 02:30
Last week marked a victory for Volkswagen boss Martin Winterkorn. The German carmaker announced that it plans to extend Winterkorn's term through to the end of 2018, a coup for the company's top manager after he clashed with former chairman Ferdinand Piech earlier this year.
The supervisory board will vote on the proposal on September 25, the Wolfsburg, Germany-based company said.
Volkswagen's contract with the 68-year-old Winterkorn is scheduled to expire in December 2016.
Under Winterkorn's leadership, Volkswagen is closing in on Toyota as the world's biggest carmaker, with the German manufacturer overtaking its Japanese competitor in sales in the first half of 2015.
Winterkorn is overhauling Volkswagen's corporate structure to create a decentralised system with four holding companies in a bid to boost profits at Europe's largest carmaker.
Under Winterkorn's direction, VW has expanded from eight to 12 brands, more than doubled the number of production plants to over 100, boosted unit sales by 64pc and nearly doubled revenues.
But he has also faced criticism for the company's underperforming operations in the United States, its failure to keep pace with rivals like BMW on fuel efficient technologies and the slowness of its push into budget cars.
And he survived a challenge from Piech earlier in the year that made global headlines and rattled management at a crucial time for the company.
The management dispute erupted in April, when Piech told 'Der Spiegel' magazine that he was keeping his distance from the chief executive.
Other board members, including relatives in the Porsche-Piech shareholding clan and labour and political leaders, rallied behind Winterkorn, prompting Piech to leave.
"Potential internal CEO candidates now have the opportunity to make their mark," Arndt Ellinghorst, a London-based analyst at Evercore ISI, said.
"There's now a higher probability VW will get an external chairman, as Winterkorn will be too old to take the post when his contract expires."
Eventual candidates for the CEO position include Herbert Diess, head of the Volkswagen nameplate; Rupert Stadler, who runs the Audi division; and group Chief Financial Officer Hans Dieter Poetsch.
Porsche-brand CEO Matthias Mueller (62), who has been touted as a potential successor, will be too old for the VW top job by 2018, Ellinghorst said.
VW's six-month sales amounted to 5.04 million cars and trucks, exceeding Toyota's 5.02 million deliveries. The German carmaker has a goal of becoming the number one carmaker by 2018.
With Winterkorn keeping his post, "we will continue on our successful path of recent years", supervisory board chairman Berthold Huber, who replaced Piech on a temporary basis in April, said.