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.
In tapping the 59-year-old Mr Diess for the top job, Volkswagen would elevate a senior executive from its own ranks, while handing the reins to someone who was not at the carmaker when the diesel-cheating scandal began.
The sprawling corporate network of Volkswagen now employs more than 600,000 staff across the world and includes the brands Volkswagen, Audi, Porsche, Skoda, Seat, Bugatti, Lamborghini and Bentley, as well as a truck producers MAN and Scania.
Mueller, a former chief executive of sportscar-building VW subsidiary Porsche AG, was brought in to replace Martin Winterkorn in 2015 and was contracted to serve until 2020. The total cost to the company from the scandal is now near $30 billion. "Unions and Lower Saxony together have the power to block his appointment". The idea is reportedly to start fresh after the latest round of scandals related to diesel vehicle emissions.
The automaker's share price has since recovered, but some lawsuits are still pending.
"The range of tasks at group level, with its many brands, legal risks and political influence, makes the new assignment incomparably more complex", Speich said, adding that there is no guarantee reforms would become easier to push through.
Officially, the line from the company is simply that a change at the top of the company may be coming as part of a larger overhaul of management, but a number of unofficial sources (as quoted by Handelsblatt) have said Diess is likely to be appointed the new CEO soon.
Volkswagen has also put huge emphasis on China, branding the market "decisive" for its future success.
"Diess will hold both positions, CEO of the company and the VW brand", one of the sources said, speaking on condition of anonymity because of the sensitivity of the subject.
Chairman Hans Dieter Poetsch is in talks about changing the structure with fellow supervisory board members and members of the management board, Volkswagen said. He and Mr Mueller instead agreed to guarantee VW's German jobs until 2025, to get labour approval for a plan to turn the company into a mass producer of electric cars.