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Pressure piles on VW CEO in US test scandal
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Pressure piled on the head of Volkswagen yesterday in the wake of an emissions-testing scandal that鈥檚 seen 15 billion euros (US$16.9 billion) wiped off the company鈥檚 market value.
Following revelations that the German carmaker had rigged US emissions tests for about 500,000 diesel cars, VW CEO Martin Winterkorn apologized on Sunday for the fact that his company had 鈥渂roken the trust of our customers and the public.鈥
But saying sorry wasn鈥檛 enough for investors as they digested the financial and reputational implications of the scandal on the world鈥檚 biggest carmaker by sales 鈥 VW鈥檚 share price fell by a stunning 17.14 percent to close at 133.70 euros in Frankfurt. Earlier it had tumbled by more than 20 percent.
In the wake of Friday鈥檚 revelations from the US鈥檚 Environmental Protection Agency, VW has already halted sales of some vehicles in the United States and pledged to cooperate with regulators in an investigation that could, in theory, see the company fined up to US$18 billion.
Industry analysts said Winterkorn faces difficult questions in the coming days, particularly when the company鈥檚 board is scheduled to meet on Friday.
鈥淎t the moment, I鈥檇 be surprised if Winterkorn can ride this out, but in Germany there鈥檚 often a slightly slower process in these matters,鈥 said Christian Stadler, a professor of strategic management at Warwick Business School.
Stadler said that if VW were a US company, then the CEO would have gone more or less immediately.
In essence, VW stands accused of skirting the US鈥檚 clean air rules. The EPA said VW used a device programed to detect when the cars are undergoing official emissions testing. The software device then turns off the emissions controls during normal driving situations, allowing the cars to emit over the legal limit of pollutants.
Guido Reinking, a German auto expert, said that for a company to engage in such blatant trickery its top executives would have to be informed.
Winterkorn led research and development across the VW group from 2007. He became chairman of the management board the same year.
鈥淚t鈥檚 almost impossible to imagine that he didn鈥檛 know about this special way of programing the engine,鈥 Reinking told German television station n-tv.
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