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VW CEO Wants Workers to Have Some Fun Again

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Volkswagen AG Chief Executive Officer 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, Mueller laid out a new business strategy and a fresh code of conduct that breaks with the style of the old guard. Mueller said Volkswagen will take a hard look at the some 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, 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.

Organic Change
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 queried 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 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.”

Still, the call provided little new information of note about the diesel scandal, Max Warburton, a Singapore-based analyst with Sanford C. Bernstein Ltd., said in a note to investors. Mueller’s ideas about new structures are “all very interesting, but it was hardly what we dialed in to hear.”

Considering the third-quarter report’s “tempered language and vague explanations, one can sense that VW hopes this will all just go away soon. It won’t,” Warburton wrote, saying that the lack of detail may indicate the company still doesn’t understand how big its problems are or how to fix them.

Style Difference
While Mueller has routinely thanked 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.

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, Mueller said the board ultimately decided to keep them separate.

The CEO cut short his participation on 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, but has yet to visit the U.S., where the cheating was discovered. To investors, Mueller promised the company, which has suspended at least six managers so far, would get tough as it seeks to move ahead.

“We will be ruthless in punishing those involved,” Mueller said. “And we will be comprehensive in learning from it so something like this never happens again.


Naomi Kresge, Christoph Rauwald

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