Volkswagen chief executive Martin Winterkorn has bowed to pressure and quit, accepting responsibility for the diesel emissions scandal that has all but destroyed the reputation of the German carmaker in recent days.
Winterkorn is unlikely to be the only casualty of the emissions scandal. The embattled company’s executive committee said yesterday that it is “expecting further personnel consequences in the next days”.
The US department of justice, as well as German authorities, are reportedly pursuing criminal investigations.
Winterkorn, who has run Volkswagen since 2007, said yesterday he was “shocked by the events of the past few days”, adding:
“Above all, I am stunned that misconduct on such a scale was possible in the Volkswagen Group.”
But while Winterkorn said that he was resigning “in the interests of the company”, he refused to accept blame for any wrongdoing, despite the company’s admission that 11m cars had been outfitted with a device deceiving regulators over diesel emission levels.
“I am doing this in the interests of the company even though I am not aware of any wrong-doing on my part,” Winterkorn said.
Even so, the resignation marked a U-turn for the chief executive, who on Tuesday issued a video statement saying that he would do “everything necessary to win back trust, step by step”.
Yet that responsibility will now fall on somebody else. Volkswagen has yet to name a successor for Winterkorn, though it has been widely speculated that he will be replaced by Porsche chief executive Matthias Muller.
Analysts agree that whoever takes the helm at Volkswagen will face a difficult road ahead.
David Papier, head of sales trading at ETX Capital, told City A.M. that the new chief executive will have to overhaul Volkswagen’s operations.
“The new boss has got to come in, and has got to turn this area of the business around,” Papier said. “The new boss has got to make the public and investors believe in the stock, believe in the company again.”
The scandal has sent the company’s share price into freefall, wiping more than a third off the automaker’s value since the beginning of the week.
Shares recovered by five per cent yesterday.
MY OTHER COMPANY’S A PORSCHE…
Now that Winterkorn is out, who are the runners and riders to take the top job at Volkswagen?
German media has been speculating all week that Muller, the current Porsche chief exec, will take the reins at Volkswagen.
The head of Volkswagen’s Audi division, is also being mooted as a possible boss for all of Volkswagen’s operations.
This would be another internal hire. While Diess only joined Volkswagen from BMW at the start of the summer, some analysts say that he has what it takes to run the German car giant.