Volkswagen's New CEO Brings Software Know-How - InformationWeek

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Volkswagen's New CEO Brings Software Know-How

Taking over from Martin Winterkorn, former Porsche chairman Matthias Muller will try to regain customer trust for Volkswagen in the wake of its emissions cheating scandal. Holding a master's degree in computer science, Muller brings a familiarity with software that may help the automaker emerge from its crisis.

Crisis Response: 6 Ways Big Data Can Help
Crisis Response: 6 Ways Big Data Can Help
(Click image for larger view and slideshow.)

Volkswagen AG on Friday appointed Matthias Müller, chairman of Porsche AG, as its new CEO. Müller replaces Martin Winterkorn, who resigned on Thursday in the wake of revelations that the company used software to cheat on emissions tests.

Müller, 62, apprenticed as a toolmaker with Audi AG after high school. He subsequently studied computer science at Munich University of Applied Sciences. His master's degree in computer science may provide greater awareness of the implications of automotive software than that exhibited by his predecessor.

"My most urgent task is to win back trust for the Volkswagen Group -- by leaving no stone unturned and with maximum transparency, as well as drawing the right conclusions from the current situation," said Müller in a statement. "Under my leadership, Volkswagen will do everything it can to develop and implement the most stringent compliance and governance standards in our industry."

[Check out other ways technology has derailed C-Level careers. Read 14 Security Fails That Cost Executives Their Jobs.]

Volkswagen has much to do. A week ago, the US Environmental Protection Agency, in conjunction with the California Air Resources Board, issued a Notice of Violation charging that the company had deliberately employed software -- a "defeat device" -- to allow noncompliant diesel engines to pass emissions tests.

Matthias Muller, CEO, Volkswagen AG
(Image: Volkswagen AG)

Matthias Müller, CEO, Volkswagen AG

(Image: Volkswagen AG)

According to EPA tests, the 482,000 affected vehicles emit as much as 40 times more pollution than allowed by emission standards. Affected diesel vehicles include: Jetta (2009–2015), Beetle (2009–2015), Audi A3 (2009–2015), Golf (2009–2015), and Passat (2014-2015).

The scandal subsequently widened when Volkswagen acknowledged that 11 million vehicles worldwide relied on its deceptive software. According to The Guardian, the company's software allowed between 250,000 and 1 million additional tons of nitrogen oxides (NOx) into the atmosphere annually, potentially as much as all of the industries in the UK emit each year.

Volkswagen has set aside €6.5 billion ($7.2 billion) in its third quarter to cover costs arising from the scandal. The company faces dozens of lawsuits and fraud investigations in multiple countries.

Other automakers may also face renewed scrutiny. On Thursday, German magazine Autobild said BMW's X3 exceeded European emissions limits. BMW responded with a statement insisting that it doesn't manipulate emissions tests.

Volkswagen's Transparent Factory in Dresden.
(Image: ZU_09/iStockphoto)

Volkswagen's Transparent Factory in Dresden.

(Image: ZU_09/iStockphoto)

In a phone interview, Jason Hanold, managing partner of executive search firm Hanold Associates, said it's too early to tell whether Müller will be successful in dealing with the crisis, and whether he will remain at the helm for a long time.

"You can make a case for either someone from the Volkswagen AG portfolio or someone from the outside."

Hanold said that if Volkswagen AG were a standalone entity, there would be a clear case for finding new leadership from outside the organization. "The upside to this is that you have somebody who has relationships across the corporate portfolio, across the supervisory board. He's a known quantity, which will help in efforts to identify the unethical behavior and to eradicate it."

He said that, while the extent of the problem remains unclear, Müller's existing relationships should help the company fix things sooner.

"Müller could be an outstanding choice if he approaches this with precision, urgency, and transparency," said Hanold. "Or he could be a mask for the issue if he's vague."

Thomas Claburn has been writing about business and technology since 1996, for publications such as New Architect, PC Computing, InformationWeek, Salon, Wired, and Ziff Davis Smart Business. Before that, he worked in film and television, having earned a not particularly useful ... View Full Bio

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User Rank: Ninja
9/28/2015 | 11:49:16 AM
Re: Volkswagen's New CEO Brings Software Know-How
It definitely seems like a timely PR move and due consideration was given to how his background would affect the company, but yeah, many of the details are as yet unknown. Moreover, we can only speculate how much direct agency one man really has in the long-term goings on of a company this size, and how much he'll actually be getting his hands dirty rooting out that corruption and spearheading new software plans. I had to do a double-take at the amount of emissions listed - not forty percent more, but forty times more. repairing that is going to be a multidisciplenary effort that will require buy-in from all parts of the organization. Marketing has to come up with tasteful commercials for years to come, , recalls, buybacks, PR, etc., have to be handled, and the role of IT/Software is obvious. No small undertaking.
User Rank: Moderator
9/28/2015 | 11:02:32 AM
Re: No software knowledge necessary....
Here in Ontario we have emission testing on most vehicles every 2 years. It used to be that the machines would be hooked up directly to the exhaust system with another module hooked into the console. That seemed like a simple testing method for compliancy.

These systems have been updated in Ontario & are largely reading the diagnostics from the in-car computing. Seems like the former method would have been better since it reads direct from the exhaust system.

I figure with more advanced automotive computing we'll probably see more of these issues moving forward.
User Rank: Ninja
9/28/2015 | 9:44:21 AM
No software knowledge necessary....
There is no software knowledge necessary to solve this one.

He needs to start by issuing a buy-back of all the affected models. Get them off the road as quickly as possible, and hope for leinency in fines for taking quick action, and it's the move that will most likely make current owners happy (and it saves a LOT of time and money trying to 'rig' the affected vehicles up).

Then, he should probably offer some kind of incentive to these owners as a way to make-up and potentially win them back. They are going to have a hard enough time going forward without 11 million pissed off former customers!

And, to at least attempt to undo the massive (highly politically incorrect!) 'green' screw-up they've committed, they'll have to get real green, real quick.... donating to green causes... making their cars, plants, etc. ultra-green going forward, etc. That's going to be a tough one... maybe they'd better double the efforts on an electric car or something. Possibly software knowledge will be helpful here, I suppose (if that's what the article was aiming at).

Finally, they'll have to hope and pray for the goldfish attention span of the populace and move on to as many positive things as they can possibly pull off on the PR front.
User Rank: Apprentice
9/28/2015 | 9:31:13 AM
Software Experience?
The company doesn't need software experience; they need a leader who is willing to make difficult choices, like improving engineering, or not selling cars in a market that requires better fuel efficiency than they can muster.


Now that we know Audi also had the cheat device (and who knows about Porsche?), we better check all cars from all companies...


VW doesn't need software experience; our government agencies tasked with protecting us do...
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