Volkswagen CEO Shakeup? Dieselgate Still Roiling Upper Management Ranks At Volkswagen?

Senior works council members past year had their salaries cut and bonuses suspended after public prosecutors investigated alleged overpayments at the carmaker, a move that labor leaders are blaming on Blessing, one source said.

The German automaker owns other automotive brands such as Porsche and Audi.

Dieselgate has cost VW more than 25 billion euros ($31 billion) in buybacks, fines and compensation, and the carmaker remains mired in legal woes at home and overseas.

However, in May 2017 prosecutors in Stuttgart said they were investigating Mr Mueller over suspicions he may have known about the diesel cheating before it became public.

German vehicle giant Volkswagen is set to replace its chief executive Matthias Mueller Thursday, as it struggles to move on from the "dieselgate" emissions scandal that has mired the company since 2015. Amid opposition from labor leaders, Mueller failed to sell motorbike maker Ducati a year ago.

Mr Mueller had been running Porsche before being elevated to replace Martin Winterkorn.

In the aftermath of the diesel-cheating scandal, Mr Mueller sought to overhaul Volkswagen's rigid top-down management structure, delegating more responsibility to its brand and regional chiefs. "Unions and Lower Saxony together have the power to block his appointment".

Also under discussion has been a possible spinoff of the company's truck and bus division, which builds Man and Scania units - news on that is set to follow, as well as a decision on whether to give workers unions a place on the management committee in a bid to try and unblock obstacles to reform.

That plan comes as rivals, including Fiat Chrysler and Daimler, consider spin-offs or legally separate divisions to boost their share prices and raise cash to fund development of electric and self-driving cars.

Early in Diess's tenure as head of the VW vehicle brand, labour leader Bernd Osterloh publicly questioned his credibility in contract talks, raising concerns that he might fall victim to the carmaker's complex internal politics, which has toppled many high-profile newcomers.

"Mueller has expressed frustration with the pace of Volkswagen's transformation and more recently about his ability to turn around the brand's image following revelations the company had tested toxic fumes on monkeys".

Diess is due to outline the group's new leadership structure in front of the supervisory board on Friday, two sources said.