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Economy & Business

For Some Industry Observers, Volkswagen CEO Change Spells A Missed Chance

KELLY MCEVERS, HOST:

Volkswagen's board named a new CEO today. The company is trying to recover its reputation after a huge emissions cheating scandal. The new CEO was head of Porsche and has worked at other VW brands. Critics say naming an insider was not the way to go. NPR's Eleanor Beardsley sends this report from Volkswagen's hometown of Wolfsburg, Germany.

(SOUNDBITE OF ARCHIVED RECORDING)

MATTHIAS MULLER: (Speaking German).

ELEANOR BEARDSLEY, BYLINE: After meeting much of the day, a spokesman for Volkswagen's board announced the company was naming Matthias Muller as its new CEO. It was no surprise as Muller was the favorite candidate to replace former CEO, Martin Winterkorn, who resigned on Wednesday. Still, people in Wolfsburg seemed relieved to have someone at the helm again.

In the town's central plaza with its fountain, people gathered to drink beer and listen to live music. The square is full of well-off retirees and blossoming families. Sixty-two-year-old Heinze Kushel says Muller was a good appointment. Like most people in Wolfsburg, he says he's loyal to Volkswagen.

HEINZE KUSHEL: (Through interpreter) Of course Volkswagen has to clean up this mess, but what I don't think is good is that people have almost shattered the company over this thing.

BEARDSLEY: Across town Hardwig Erb looks out from his office window at VW's massive factory. He's a senior official at Volkswagen's union of metalworkers. Erb says with 30,000 engineers working for VW in Wolfsburg alone, it's impossible to know what everyone is doing.

HARDWIG ERB: (Through interpreter) All of this was caused by a small group of people who were in a position to manipulate the technology. It was just a mistake by a small group, but we'll deal with it.

BEARDSLEY: Erb says Muller comes from the VW world, and that's good. But Frankfurt-based consultant Hasso Manfeld disagrees. He says handing an insider the job was exactly the wrong thing to do. He says VW's CEOs, like the former Winterkorn, were seen as untouchable.

HASSO MANFELD: They were regarded as gods and, for example, Mr. Winterkorn - it was known that he punishes mistakes in public, and so he created an atmosphere where mistakes are not possible.

BEARDSLEY: Car City, or Autostadt, is a giant campus complex beside the Volkswagen factory. It has perfectly groomed lawns and spacious exhibit halls dedicated to the automobile and its history. The guides here say there's no exhibit about the Nazis who started this company or the slave laborers who worked and died here. Everything in VW-land seems perfectly scripted. Mathias Tilling is on a tour of Car City. He says the VW scandal has hurt the entire nation.

MATHIAS TILLING: The brand Made in Germany was, up to this scandal, a symbol for quality, for good working. And meanwhile, I think it has become a criminal touch.

BEARDSLEY: Tilling believes Volkswagen should get rid of a whole layer of management and start afresh. Even then, he says, it will take a long time to restore the damage done to German manufacturing. Eleanor Beardsley, NPR News. Wolfsburg, Germany. Transcript provided by NPR, Copyright NPR.