Volkswagen looks to Porsche to rev up battered company

Matthias Mueller, CEO of Porsche AG.
Thomas Niedermueller | Getty Images

Matthias Muller, the current chief of Volkswagen subsidiary Porsche, is expected to be named CEO of Volkswagen, sources close to the VW Supervisory Board told CNBC on Thursday.

The VW Board will hold a previously scheduled meeting in Wolfsburg, Germany, on Friday, where sources with knowledge of the situation say Muller will be tapped for the top job at the embattled automaker.

One person close to Volkswagen's leadership told CNBC that Muller "has strong support on the board."

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The executive will need it, given the widening scandal at the world's second-largest automaker. On Thursday, reports surfaced citing Germany's Transport Minister as saying that Volkswagen has admitted to rigging emissions tests on some diesel engine vehicles in Europe.

That news followed the bombshell announcement by the Environmental Protection Agency that Volkswagen had secretly put software on 482,000 clean diesel cars in the U.S., allowing those cars to cheat clean-air emissions tests. The scandal has erupted into the biggest corporate crisis Germany has seen in years.

Volkswagen CEO is out
Volkswagen CEO is out

After seven years running Volkswagen as CEO, the scandal claimed the scalp of Martin Winterkorn, who was forced to resign. In a parting statement, he described himself as "shocked by the events of the past few days. Above all, I am stunned that misconduct on such a scale was possible in the Volkswagen Group."

It remains to be seen how many other VW executives are forced to leave the company. Volkswagen's U.S. unit said it had no comment when asked about reports that its boss, Michael Horn, would also leave.

Volkswagen CEO Martin Winterkorn.
Martin Winterkorn resigns as Volkswagen CEO
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Volkswagen's leadership bench is loaded with veterans who have spent decades with the company. So why is Muller the best option to run the company while it grapples with the emission crisis?

"He has a lot of respect in this company," one source told CNBC. "Muller is thought highly of by executives and the labor unions as well."

Muller has run Porsche since 2010, during a time when Porsche sales and profits surged. It also helps that Muller is close to the Porsche family, which is the largest shareholder at Volkswagen.

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