Volkswagen plans to extend chief executive officer Martin Winterkorn's term through the end of 2018, a victory for the carmaker's top manager after he clashed with former chairman Ferdinand Piech earlier this year.
The supervisory board will vote on the proposal on September 25th, the company said on Wednesday in a statement.
VW's current contract with Mr Winterkorn, 68, is scheduled to expire in December 2016. Under Mr Winterkorn's leadership, VW is closing in on Toyota as the world's biggest car maker, with the German manufacturer overtaking its Japanese rival in sales in the first half of 2015.
Mr Piech tried to oust the CEO and then left in April when other board members rallied behind Mr Winterkorn.
While the contract extension stabilises Volkswagen’s day-to-day management, long-term succession issues remain unresolved.
The trickiest question may be finding a new chairman who pleases the Porsche-Piech clan that controls the firm, union leaders and the German state of Lower Saxony and the emirate of Qatar, which are shareholders.
“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 car brand; Rupert Stadler, who runs the Audi division; and chief financial officer Hans Dieter Poetsch. Porsche-brand chief Matthias Mueller, 62, who has been touted as a potential successor, will be too old for the VW top job by 2018, Mr Ellinghorst said.
Volkswagen fell as much as 0.8 per cent and was trading down 0.4 per cent at €163.70 at lunchtime in Frankfurt, reversing a gain earlier in the day.
The stock has dropped 11 per cent this year. Mr Winterkorn pledged in June to delegate more responsibility to Volkswagen’s brands and regional chiefs to make the company more responsive to industry changes.
That would mark a change from the centralized structure favoured by Mr Piech, who was CEO before becoming chairman. That has left open the question of who will guide VW through a reorganisation likely to be outlined this month.
– Bloomberg
