Volkswagen CEO Martin Winterkorn announced his resignation after an emergency meeting held Wednesday. Five supervisory board members met with Winterkorn on Wednesday ahead of a regularly scheduled meeting Friday.
Winterkorn resigned five days after it was announced that 482,000 Volkswagens in the U.S. had illegal “defeat devices” that allowed them to cheat through emissions tests. It later came out that 11 million cars worldwide had the programming, and the company set aside more than $7 billion to pay for the ongoing scandal.
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.
The company had shed more than $26 billion in value over the last two days in a stock free-fall.
It wasn’t immediately clear who would replace Winterkorn as CEO.
The downward spiral continues. Who else in the VW management food chain will be caught in the downdraft I wonder?
You quit or we fire you.
BTW “irregularities” LOL ! Can these people ever take responsibility for anything ?
Uhhh, his statement starts “As CEO I accept responsibility …”.
I expect that any wording, on this and any other statements, will be carefully vetted for legal reasons.
“I accept responsibility for the widespread brazen fraud committed by VW under my watch” probably wouldn’t bode well for his future freedom.
Umm, they’ve already admitted to the fraud, why the mealy-mouthed corporate speak about “irregularities” ?
Of course he says he accepts responsibility as CEO, what else is he going to say ? I’m talking about taking moral responsibility and just fess up to what you did. It doesn’t mean he is taking personal responsibility for what others have done. The buck stops here.
Michael Horn (CEO of VWoA): “We totally screwed up”
The board probably asked him one question.
“When did you find out about the emissions defeating software and what did you do about it”
You can then draw a conclusion as to what his answer was.
The problem with capitalism is that companies can just as easily choose to navigate regulations instead of abiding by them. Understanding that there is no easy, foolproof way to enforce regulations on a sprawling global conglomerate, the fact that this corporate backed lie was sustained for years is a failure of epic proportions that will lead to massive reforms.
Based on what I have gathered so far, if somebody had grabbed and tested any VW/Audi TDI off the road dating back to 2008/09, they would have identified a marked difference between claimed and actual emissions. Pretty remarkable if that is the case.
I doubt the board asked him anything before reaching a decision, or that any answer he gave to such questions could impact the outcome. VW stock cratered. Whether he knew anything about the issue or not is largely irrelevant in this decision. They have to restore investor confidence and the easiest/fastest/most efficient way to to that is usually to replace the person at the top. This happens all the time in private or public companies in financial free fall.
In the most direct precedent, BP actually went contrary to your strategy after the spill stating for months that the CEO “has the full confidence of the board of directors of BP.”
The board needs cause in these cases or the move could just as easily be labeled by investors as false application of blame without basis and compound the problem.
The swiftness of the decision suggests the board has reasonable assurance that the investigation will ultimately implicate Winterkorn and reinforce the decision.
Others will determine Mr Winterkorn’s guilt or innocence.
But he had to leave, both symbolically and practically. Someone else can ride in on a white horse and clean up the mess – someone with no connections to ‘old’ VW. As such, I bet the board will bring in an outsider. If they choose an insider, the dark cloud will hang over VW forever.
Both Herbert Diess (VW brand chief) and Andreas Renschler (trucks chief) are quite new to the company and would be untainted by this.
It sounds like it’s going to be Muller.
Ferdinand Piech is saddling up his white horse.
And this is VW, they aren’t going to hire a CEO from somewhere else. Expect someone like Muller or Stadler.
Muller and Stadler are qualified, but both are longtime VW management. We’ll see whether that will be considered to be a plus or a minus.
Hiring someone from the outside would take months in any case (it would take that in any company), at this point there is a new (and relatively inexperienced) chairman, and a company in crisis. I believe they will have a new CEO appointed on Friday after the supervisory board meeting.
Piech was in talks with the Agnelli family about a merger with FCA prior to his ouster (Today’s headline on “The Street”). Watch for the merger of FCA and VW to be the next breaking news story in the days to come.
Now you’ve got my juices flowing.
Sergio? That would be awesome!
How many members of the VW board are Porsche family members/relation?
Two. Ferdinand Piech’s family has three seats. There are twenty seats total.
Oh, I thought Piech WAS a Porsche, in essence!
Kind of. He owns 10% of Porsche.
“As CEO I accept responsibility for the irregularities that have been found in diesel engines”
‘Irregularities?’ Like, that they rattle? I thought that was part of their ordinary function. You don’t have to own up to that, buddy!
Why is this guy getting canned? All this stuff happened under Piech watch. This is some hot potato BS
Because he’s the CEO now. He was also CEO of VW AG from 2007-2015. He probably should have known (or did know) this was going on.
“Why is this guy getting canned?”
They’re scrambling to assure the shareholders. The CEO almost always has to fall on his sword in these situations.
Winterkorn has (had) been CEO since 2007; the defeat software was installed beginning with model year 2009. While it’s possible that this may have gotten up to the Advisory Board level, it certainly couldn’t have done so without being approved by the CEO on the way up. Either way, Winterkorn’s tenure overlaps almost exactly with the scandal, and he had to go.
Hmmmmm, so did he get a golden parachute or not?
He’s been at VW for over 30 years. Yeah, he’ll get that parachute of gold.
You normally don’t get a parachute if you resign. But Winterkorn has been paid well enough that he won’t have any financial worries.
I would think that he got something. Nasser resigned from Ford and got a $17 million handshake.
Should have taken a page from Casino:
Ace Rothstein: [to the winner] All right, I’m gonna give you a choice. You can either have the money and the hammer or you can walk out of here. You can’t have both. What do you want?
I think his parting gift should be an out of warranty VAG product.
Make it a Chinese built MkIV Jetta with the 1.8T.
It’s called a Phaeton Parachute, covered in shiny GOLDENMETALLIKTEFFEKT.
Nice going Martin. Winterkorn just undermined the best legal argument to save VW from fines and sanctions. Legal websites noted that the law states that vehicles must pass emissions limits “during testing”, and the little trick VW used is within that definition. There’s no testing procedure that covers emissions under all driving conditions, so VW could have claimed it was following the emissions law. Now they have to explain why Winterkorn resigned, though a (temporary) loss of $26 billion in market value is justification enough.
Defeat devices violate federal law. You ought to read the Code of Federal Regulations re: the Federal Test Procedure prior to forming and offering an opinion.
It’s not a “defeat device”, that’s just the jackwagon verbiage from CARB and EPA. It’s part of the emissions system, not a separate hidden piece of hardware that would qualify as a “device”. It doesn’t detect testing equipment, it’s tuned for the conditions under which a test operates.
It will do the same thing when those conditions are encountered on the road, with no testing equipment attached. Most people may not know the difference, but I assure you lawyers will be able to explain it in detail, or provide expert witnesses who can. What CARB and EPA claim is a cheat device or a violation of federal law has to be proven in court.
Unfortunately for you, in the real world, administrative codes are not built on silly semantics from internet comments….
VW has already publicly admitted that it has done this.
The EPA-CARB press release stated that VW had admitted to it.
The defeat devices are specifically banned under federal law.
These things did not happen out of the blue. The feds and VW were already haggling over this prior to the public announcements.
At this point, VW has no defense.
Pch101 – – –
Fully agree.
==============
Lorenzo – – –
“It doesn’t detect testing equipment…”
Back-pressure sensors can tell when EPA hosing is attached, and from that deduce that testing equipment is going to be used. So, no, it’s not a mechanical device: that is just a convenient euphemism, as you point out. But it is a software subroutine that instructs the engine to go into “lean burn” mode to reduce NOx upon detecting back-pressure beyond a specified value; and to release that mode and return to a
normal, more powerful operation when the back-pressure falls below that critical value.
I suspect this was discovered accidentally in an EPA testing Lab when a technician failed to install the exhaust-collecting hose properly, and allowed lower than the proper back-pressure, only to discover that the NOx levels went up dramatically, compared to what happened when he then readjusted the hose to seal as it should.
===========================
No. EPA didn’t detect anything. VWU did all the detecting, it was handed to EPA on a platter.
th009 – – –
Well, Dr Carder at WVU tested 3 diesels (two VW’s; one BMW) in early 2014, and tried to hand the poor VW data on a platter to VW.
They ignored him.
Them he tried to hand it on platter to the EPA.
They ignored him.
But obviously their (the EPA’s) curiosity was aroused, and then they did their own testing. And the rest is now history…
======================
I wonder when he knew about it, and did he in fact approve or suggest doing it. What else did VW cheat on. Gas engines?
What other companies are doing the same?
If VW wants to do (and, in my view, needs to do) that which is “proper, honorable, and ethical”, then Mr Winterkorn’s departure is just the beginning. They MUST:
1) Take back ALL the diesels with the “defeat” software, worldwide;
2) Replace them with “clean” comparable or better new cars at no cost to owners;
3) Issue a document to the EPA and CRB and other agencies worldwide of VW’s guilt in this matter, and offer to agree to any fines imparted by those agencies;
4) Find out who was involved, or had knowledge, within VW in this deceit, and fire them promptly.
===============================
There’s nothing new under the sun:
http://www2.epa.gov/enforcement/caterpillar-inc-diesel-engines-settlement
Looks like Piech got what he wanted after all, though he should have made his wish more specific.
Darn monkey’s paw strikes again.
“I want Winterkorn to lose his job, but I don’t want to lose 50 million euros, or have a comet split the Moon in half, or turn into a giant booger or anything like that. Got it?”
VW are you listening?!?!?! The time to strike is now!! Hire a female CEO…it works for GM. Extra points if her name is Mary. Better yet…one up everyone and hire a transgender/LGBT. Your sales will surpass Subaru overnight. Opportunity knocks.
Aufstieg durch Schwule
Why is he smiling? He has destroyed a significant amount of wealth and trashed a company that has contributed, in a positive way regardless of how we might feel about their cars today, to personal mobility worldwide. Plus, he’s pretty much personally finished.
Ah but if he was short, he’s set.
Mr President, the picture is probably not from today.
He’s smiling because that’s a file photo from a car show or model introduction.
Take the picture, leave the poses and facial expressions, but make them 40 years younger and change the clothes and background to a yacht club, and it could be a Nautica ad.
I’m sad I missed that time in America. I like boats.
As I look beyond the haze caused by the implosion at VW and the excess NOx and particulates, I can see past the rumours….
I see the talented and gifted Sergio, riding to the rescue on in his black sweater his black stallion…
Yes, the man who fleeced GM and thus ‘saved’ Fiat, and then ‘saved’ Chrylser from demise, will now preside of the new VW-FCA! (It must be named that way–FCA-VW is too close to “F-cka-VW”). The “New AXIS”, as it were.
The prince, who was spurned by Princess Mary of GM, will now now take his new German bride, and be King of Autodom!
And in so doing, when there are no more mergers in the offing to cover up the rot, we may witness the eventual demise of Fiat, Chrysler, and then VW will break away again, as Germany will not allow it to suffer the same fate as the first two.
You read it here first…
“Talented and gifted Sergio?” Oh, please.
I just threw up in my mouth
Dear Leader, I call him.
You rang?
LOLOL
“I accept responsibility…”
RARE words spoken by… ANYONE!
NO one in this day and age accepts responsibility for their actions unless ‘forced’ to do so. But no matter what one does, you get ‘forced’ to do work that someone else did and get the sh!t that was already present!
Any “honest” person would be eaten alive in the corporate world, if not in life!
Anyway…
The guy doesn’t necessarily ‘need’ to work anymore. He probably made enough money working for VW over the years and built up his retirement account.
Others should also be found and fired for this matter!
Hey! A couple of government agencies have made accusations of law breaking. Are they true? Have those accusations been proven in court? Does what VW put in their emissions control system rise to the status and meaning of “cheat device”? That stuff has to be proven in court, and $18 billion on the line means VW will fight the accusations in that arena, once the head office gets over its hand-wringing.
Lorenzo – – –
It no longer matters what courts prove or don’t prove. The “Court of Public Opinion” has now found them guilty, and the “Judge” (read: EPA, et. al.) will meet out the sentence.
VW knows that. This thing is over for them. They have got to come MORE than clean verbally: they have to act boldly and courageously to compensate their customers and stop the hemorrhaging, or Toyota will happily resume being the world larges automobile manufacturer.
=========================
VW has already admitted it to the EPA. It’s over.
http://www3.epa.gov/otaq/cert/documents/vw-nov-caa-09-18-15.pdf
Page 4 – “Only then did VW admit it had designed and installed a defeat device…”
Well who didn’t see this coming.