Volkswagen AG to keep Winterkorn as CEO for another three years image

Volkswagen’s supervisory board executive committee wants Martin Winterkorn to remain as the company’s chief executive officer for another three years, extending his contract through the end of 2018.

This move means two things: the executive has received a vote of confidence after this year’s internal crisis that lead to the clash with long-running chairman Ferdinand Piech. Secondly, it also means a new chairman would be appointed. The company is still on the look for a permanent replacement to Piech, after the clash with Winterkorn over strategy left the chair vacant. Now filling the interim role is former union boss Berthold Huber. “With 71 years of age at the end of his CEO function he will be too old in our view. This increases the chances for an external chairman which is good news,” commented analysts about the probability of Winterkorn being named chairman. He now has the backing to remain chief executive for another three years from crucial members in the supervisory board – including influential labor leaders and representatives from the German state of Lower Saxony, a major stakeholder.

Piech played for decades a careful game balancing the power interests of investors and the worker representatives, which take half of the 20-member supervisory board. Now analysts and investors hope a strong character – an independent – would come to fill in the role as chairman to partner with Winterkorn and address some of the long standing company issues – such as declining sales and profitability at the mainstream namesake VW brand. Winterkorn’s current contract was set to expire next year.

Via Reuters