Martin Winterkorn, chief executive of Volkswagen AG has resigned six days after the firm admitted to cheating on US emissions tests. The announcement was made after a supervisory board meeting on Wednesday.
Mr Winterkorn announced he was stepping down but was not aware of “any wrongdoing on my part”.
He issued a statement which read: “I am 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.
“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 wrongdoing on my part.”
VW shares appear to have rallied on the news that Volkswagen’s four-member Supervisory Board held an emergency meeting at Braunschwieg airport on Tuesday night, then sat again to hear Dr Martin Winterkorn fight for his job on Wednesday. It’s believed the resignation was accepted earlier in the day but the announcement was withheld until after European stock markets closed.
Dr Winterkorn’s three-year contract extension was due to be ratified by the full 20-member board on Friday.
Despite a rise in the share price on Wednesday the company has still lost nearly 40 per cent of its value in less than a week. Its one-day losses on Monday, where it dropped more than €22 billion, exceeded the market capitalisation of Renault, and almost matched the capitalization of Fiat Chrysler and Peugeot combined.
Possible replacements
Possible replacements include Audi chairman, Rupert Stadler, Porsche boss Matthias Mueller, incoming Volkswagen brand boss Herbert Diess and Volkswagen’s director of development, Hans-Jakob Neusser. None of the four come without complications.
The posts of chairman and chief executive at Volkswagen Group traditionally go to engineers, which would rule out the economist Stadler. Mueller has a background as a computer scientist (handy when software code is at the heart of the crisis) and tool maker.
Neusser is in an awkward position. He became the engine boss of Volkswagen in 2011 and, with Dr Winterkorn insisting he didn’t know about the software cheat, investigators will inevitably be curious about why Neusser wouldn’t have told him. Neusser took over from Jens Hadler, the diesel-engine development specialist who abruptly resigned from Volkswagen at the age of just 45.
Along with Mueller, Diess seems a real option, though the former Director of Development at BMW only joined as Volkswagen brand boss weeks ago and barely knows his way to the coffee machine yet.
The man who will decide is nominee Volkswagen Group Supervisory Board Chairman, Hans Dieter Pötsch, a Ferdinand Piech-nominee who has been utterly silent on the issue, allowing Interim Chairman, Bernhold Huber, to take the heat.
While Mueller is the speculative (and Piech) favourite, it’s possible that Pötsch and Diess would prefer to start as a “fix it” team with no links to the scandalous past.
Cheating on tests
On Tuesday the car giant admitted the scandal affects some 11 million vehicles worldwide, thereby turning a US scandal into a global one.
It follows Friday’s admission that that it revealed it used hidden software to consistently cheat on US emissions tests carried out by the US Environmental Protection Agency. The software could detect when the car is being tested and ran treatments to reduce nitrogen oxides (NOx). Once out on the road, the cars were discovered to produce pollutants up to 40 times the legal limits. NOx emissions are known to be a major contributor to serious respiratory disease.