Volkswagen’s CEO has suggested that decentralizing the scandal-plagued German automaker’s mostly centralized business culture is more difficult than the executive initially expected.
Managers are struggling to deal with the nearly cataclysmic changes VW must undergo to inoculate the company from engaging in another dieselgate-type scandal, company head Matthias Mueller told business representatives Monday.
Investors believe the world’s largest automaker must become more transparent and decentralize power to regain trust following revelations VW cheated U.S. diesel emissions tests. They worry the company’s deference to authority created a culture that ultimately let the emission cheating go unchecked for years.
“There are definitely people who are longing for the old centralistic leadership,” Mueller said. “I don’t know whether you can imagine how difficult it is to change the mindset.”
One of his top priorities since taking over the company shortly after the scandal has been to decentralize power and reform the command-and-control structure that permeated every aspect of VW under its former bosses.
The company pleaded guilty in March to charges from the so-called dieselgate, which affected more than 500,000 vehicles and cost the automaker billions of dollars. VW was sentenced to three years of probation and forced to pay billions of dollars in penalties.
VW admitted in 2015 to installing so-called defeat devices in hundreds of thousands of diesel-powered vehicles in the U.S. The devices would only kick on during road conditions when emission measuring tools were not engaged.
Mueller promised shortly after investigators caught wind of the duplicity that VW would learn from its mistakes and introduce changes to prevent such a scandal from recurring. He now says that promise will be much more difficult than he previously thought.
“The process (of change) has been started but it’s a process,” Mueller added. “One now has to endure this, also as chief (executive), that some things go wrong and some things remain unsuccessful while other things are successful.”
The German automaker is promising to swivel from pushing diesel and gas-powered vehicles to targeting one million electric car sales by 2025. The company’s push to edge out Tesla in the electric auto market could be a play to recover from the 2015 dieselgate scandal.
The shift could potentially hit a few speed bumps, according to some sources within the company. Many managers are focusing on protecting themselves rather than providing leadership on producing a whole fleet of electric vehicles
“The search for those who made mistakes always took precedence over the search for the mistakes,” one said, speaking on condition of anonymity. “That mindset is still there.”
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