Volkswagen CEO Winterkorn Resigns Amid Emissions Scandal
Editors’ Note: Since the time of writing, three more Volkswagen executives have lost their positions at the company. They are Michael Horn, who led Volkswagen USA; Ulrich Hackenburg, who oversaw Audi R&D; and Wolfgang Hatz, who was in charge of R&D for Porsche. Porsche CEO Matthias Mueller is expected to take the reins in Winterkorn’s stead.
In a culminating head to a dramatic and raucous near-week for Volkswagen, Volkswagen Auto Group CEO Martin Winterkorn (left, opposite former chairman Ferdinand Piëch) has resigned his position as the industry continues to make sense of the massive scandal that broke with Friday’s allegations of cheating on emissions tests. Voicing his disgust that such deception could be so commonplace within such a large company, Winterkorn stepped down from his post and prematurely closed a bizarre chapter in Volkswagen’s history.
“I am shocked by the events of the past few days,” Winterkorn said, in a statement, per NPR. “Above all, I am stunned that misconduct on such a scale was possible in the Volkswagen Group.”
If you hadn’t heard, Volkswagen was accused by the Environmental Protection Agency last Friday of installing complex software on its diesel vehicles that would intentionally fudge the emissions results when hooked up to a diagnostics tool. In reality, the cars produce between 10 and 40 times the amount of nitrogen oxide (NOx) allowable under federal law. Backlash from the media, public, and especially VW’s TDI owners has been swift and brutal.
“As CEO I accept responsibility for the irregularities that have been found in diesel engines and have therefore requested the Supervisory Board to agree on terminating my function as CEO of the Volkswagen Group. I am doing this in the interests of the company even though I am not aware of any wrong doing on my part,” he said. “Volkswagen needs a fresh start — also in terms of personnel. I am clearing the way for this fresh start with my resignation.”
That’ll be easier said than done. The issue affects nearly 500,000 units in the U.S., but over 11 million worldwide. So far, the turbocharged 2.0-liter diesel engine is the only troubled unit, though investigations will undoubtedly expand into other TDI models. This week, VW’s stock has plummeted nearly 40% since Friday’s close.
“I have always been driven by my desire to serve this company, especially our customers and employees. Volkswagen has been, is and will always be my life,” Winterkorn continued. “The process of clarification and transparency must continue. This is the only way to win back trust. I am convinced that the Volkswagen Group and its team will overcome this grave crisis.”
A statement also noted, perhaps strangely, that Winterkorn was actually — supposedly — unaware that this was even happening. Though it’s laughable that the company CEO would miss such a large moral failing, it brings to mind the recent GM ignition situation that was dumped on now-CEO Mary Barra — immediately after Dan Akerson, too, resigned the post.
The issue has triggered external investigations of the matter, and criminal investigations are likely. Volkswagen engineers will now be tasked with finding a fix for the cars affected. Fallout from this will spread far and wide, and well into the future — the EPA will almost certainly levy fines against the company, and owners will likely be bringing a class-action lawsuit VW’s way as well. In preparation, VW has dog-eared $7.3 billion towards making the situation right.
Our take is that Volkswagen should be forced to buy back the affected units, at market value. The EPA will likely have different ideas, but it would be the best solution all around — cheaper than the potential $37,500/vehicle fines, it gets the cars off the road, eliminates the potential tanking of resale values, and owners get out nearly free and clear. The chips are in the air, so we’ll just see where they fall from here.
But perhaps most of all, Volkswagen will have to build back its consumer trust. And that will be its hardest task of all.
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