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Volkswagen turns to Porsche boss to steer it out of crisis

Volkswagen (VOWG_p.DE) will name Matthias Mueller, the head of its Porsche sports car brand, as its chief executive, a source close to the matter said on Thursday, as the fallout from the U.S. vehicle emissions test rigging scandal broadened.

Mueller, 62, has been widely tipped to succeed Martin Winterkorn, who quit on Wednesday, when the German carmaker’s supervisory board meets on Friday. He will take responsibility for steering Volkswagen through the biggest business crisis in its 78-year history. The crisis deepened on Thursday as officials in Europe and the United States stepped up their investigations. Germany’s transport minister said Volkswagen had manipulated tests in Europe too.

Separately, a group of at least 27 U.S. state attorneys general launched a multi-state investigation of Volkswagen’s representations to consumers about its diesel vehicles, and said it will send subpoenas to the automaker. The state also intends to order a recall of Volkswagen diesel vehicles sold in the state with software that enabled the cars to pass the agency’s emissions tests, but then emit far more pollution on the road.

Volkswagen has said 11 million cars globally had the software fitted, but it was not activated in the bulk of them. As well as the cost of regulatory fines and potentially refitting cars, Volkswagen faces criminal investigations and lawsuits from cheated customers and possibly shareholders. More immediately, the new CEO will have to restore the confidence of customers and motor dealers, who have expressed frustration at a lack of information about how they will be affected by the scandal.

Mueller has a majority on the 20-member supervisory board, the source said. Volkswagen declined to comment. The board will also dismiss the head of the company’s U.S. operations and top engineers at its Audi and Porsche brands, a senior source told Reuters, as it seeks a fresh start.

Mueller, who has worked for parts of the Volkswagen empire since the 1970s, is a management board member of Porsche SE (PSHG_p.DE) and so is close to the Piech-Porsche family that controls Volkswagen through the holding company.