January 19, 2016 / 3:22 PM / 2 years ago

VW picks ex-BMW manager to head brand in North America

A Volkswagen company logo sits atop the VW factory in Wolfsburg, Germany November 20, 2015.Ina Fassbender

BERLIN (Reuters) - Volkswagen (VOWG_p.DE) has picked ex-BMW (BMWG.DE) manager Hinrich Woebcken to run the North American business of its core brand as the German carmaker faces growing criticism of its handling of the emissions scandal in the United States.

Woebcken's appointment aims to strengthen the VW brand's operational performance in North America, where it has been grappling with legal and image problems since it admitted last September to installing devices to cheat emissions tests in several diesel vehicle models.

Michael Horn remains head of VW Group of America, a position he has occupied since 2014, responsible for VW and the group's other brands in the United States, including Audi and ultra-luxury marques Bentley, Lamborghini and Bugatti.

Four months after the diesel emissions scandal broke, there is no timetable for winning approval of a fix for about 500,000 affected U.S. cars, or for lifting the government's ban on the sale of 2016 VW diesel models.

The U.S. Justice Department this month sued Volkswagen for up to $48 billion for allegedly violating environmental laws.

The Volkswagen brand has long struggled in the United States, where its failure to develop new models quickly and a lack of crossover vehicles have left it a niche player behind rivals such as General Motors (GM.N), Hyundai (005380.KS) and Toyota (7203.T).

The 55-year-old Woebcken, who in his 10 years at BMW ran global purchasing besides other positions, will head efforts to coordinate development, procurement, production and sales activities in the United States, Mexico and Canada, the carmaker said on Tuesday, confirming a Reuters story.

"The U.S. is and will remain a key market for the VW brand," VW brand CEO Herbert Diess said. "That's why the North America region must be steered in the interest of our customers and dealers there."

Woebcken last year quit Germany's Knorr-Bremse Group STELLG.UL, a manufacturer of braking systems for rail and commercial vehicles, after about 15 months. Prior to his stint at BMW, he was managing director at industrial systems and automotive supplier Duerr (DUEG.DE).

Last September, the carmaker picked group veteran Winfried Vahland, previously head of Czech brand Skoda, as new head for North America as it pursued a policy to cede more power from its German headquarters to regional and car brand divisions.

But Vahland, previously seen as a possible candidate for the VW group CEO post, quit three weeks later. A labor source said then this was because his new position failed to secure him a role on the group's executive board.

Separately, VW said Chief Executive Matthias Mueller has the backing of top players on the carmaker's supervisory board who questioned the CEO on Tuesday, dismissing rumors that support for the CEO is crumbling due to his handling of the emissions crisis in the United States.

VW plans to hire Louis Freeh, former head of the Federal Bureau of Investigation (FBI) to help it deal with U.S. authorities investigating the scandal, the Sueddeutsche Zeitung daily of Munich reported on Monday.

But VW's powerful labor representatives, who control about half the seats on the carmaker's supervisory board that appoints and dismisses executives, will not support a possible appointment of Freeh, said one labor representative who declined to be named.

"We have (a new compliance chief) Christine Hohmann-Dennhardt to handle this ambitious task," the labor official said. "We see no further need" for special hirings, he said.

The issue may add to tensions between VW's top management and the carmaker's labor leaders at a time when both sides are struggling to find ways to contain the multi-billion-euro costs of the scandal.

"The company plans to hire further external specialists to deal with certain issues in the U.S.," VW said, adding that a decision will be taken in coming weeks.

Reporting by Andreas Cremer and Jan Schwartz; Editing by Maria Sheahan, Keith Weir and Adrian Croft

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