Volkswagen names Hinrich J. Woebcken for US operations; Michael Horn continues

January 24
7:55 PM 2016

Emission scandal-hit Volkswagen has appointed Hinrich J. Woebcken, a former BMW executive, to oversee its business operations in the US, Canada and Mexico. His appointment is effective from 1 April 2016. However, Audi and Porsche brand don't come under Woebcken's responsibility. Volkswagen has retained Michael Horn as CEO of Volkswagen Group America Inc.

Volkswagen is facing intense pressure from regulators over cheating the environment norms. The sales of Volkswagen were drastically hit by the recent scam of emission results rigging software installed in the German auto giant's vehicles particularly diesel versions. In this turbulent situation, Volkswagen feels leadership vacuum for restoring relationship with customers and government authorities in the US market.  

The 55-year old Hinrich J. Woebcken will head the Volkswagen for North America region. Michael Horn, Chief Executive of Volkswagen's US unit will continue in the same position. Horn is popular among the dealers in the US market. The US State Attorneys General complained about the non-cooperation of Volkswagen in the investigation process, according to The New York Times.

US District Judge Charles Breyer has appointed Robert S Mueller, a Washington-based lawyer and former Director at Federal Bureau of Investigation (FBI), as 'Settlement Master.' Breyer will help US District Court in settling over 500 lawsuits filed against Volkswagen over damage due to emission rigging software. 

Woebcken also became the Chairman of Volkswagen Group of America Inc. Michael Horn, CEO of Volkswagen Group America Inc, remains in his position, as reported by The Wall Street Journal (WSJ). The company's directors meet on Tuesday (19 January) to review the process to resolve the emission scandal problem for the customers and the company. 

Volkswagen has been facing investigations by US regulators over installation of cheating software that rigs emission results to make the vehicle compliant with US environment standards. Volkswagen has not yet been able to agree with Environmental Protection Agency and California regulators on fixing the rigging software in 600,000 vehicles. 

The appointment of Woebcken comes at a time when Volkswagen is undergoing turbulent phase as it's engaged in repairing the damage caused by its cheating emission software installed in the diesel-run vehicles. Volkswagen has recently rejiged the top managerial positions. Its global chief executive Martin Winterkorn was replaced by former Porsche chief Matthias Müller, according to Auto Blog.

It's estimated that more than 600,000 vehicles with diesel motors have been installed with the illegal software. The appointment of Woebcken comes in the wake of criticism that Volkswagen't top management is still dominated by longtime insiders. Auto industry observers feel that majority of top management officials are too ingrained in the existing corporate culture. 

After the emission scandal came into light in last August, the sales of Volkswagen vehicles have been dropping every month. Volkswagen brand sales fell nine percent to 31,000 vehicles in December 2015 despite booming auto industry sales. Volkswagen sales if Canada and Mexico markets included fell one percent to 53,000 vehicles. 

Woebcken's new job doesn't cover Audi and Porsche brands as the company is not witnessing sales drop for these vehicles. Volkswagen is offering some packages to keep its US customers happy. The offers include $2,000 loyalty program to customers who want to switch over from diesel car to compliant gas powered car. 

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