Volkswagen chief’s days appear numbered as crisis deepens

Martin Winterkorn’s days as head of Volkswagen appeared numbered yesterday after the German car maker said a scandal over falsified vehicle emission tests in the US could affect 11m of its cars worldwide.

The Tagesspiegel newspaper, citing unidentified sources on Volkswagen’s supervisory board, said the board would decide on Friday to replace Winterkorn with Matthias Mueller, the head of the carmaker’s Porsche sports car business.

A Volkswagen spokesman denied the report. A key Winterkorn ally withheld public support for the under-fire chief executive yesterday.

“I don’t want to pre-empt the upcoming intense deliberations and will not comment on details or any consequences,” Stephan Weil, the head of the German state of Lower Saxony, told reporters in Hanover when asked about Winterkorn.

Weil, a supervisory board member representing Volkswagen’s second-largest shareholder, earlier this year helped Winterkorn to see off a challenge to his leadership by long-time chairman Ferdinand Piech.

Shares in Europe’s biggest carmaker plunged almost 20% on Monday after it admitted using software that deceived US regulators measuring toxic emissions in some diesel cars.

The stock tumbled another 20% to a four-year low yesterday after some countries in Europe and Asia said they would launch investigations themselves.

Volkswagen said it would set aside €6.5bn in its third-quarter accounts to help cover the costs of the biggest scandal in its 78-year-history, blowing a hole in analysts’ profit forecasts.

It also warned that that sum could rise, saying that diesel cars with so-called Type EA 189 engines built into about 11m Volkswagen models worldwide had shown a “noticeable deviation” in emission levels between testing and road use.

Volkswagen sold 10.1m cars in the whole of 2014. The US Environmental Protection Agency said last week Volkswagen could face penalties of up to $18bn (€15.97bn) for cheating emissions tests.

The carmaker also faces lawsuits and damage to its reputation that could hit sales, while media reports have said the US department of justice has opened a criminal inquiry into the matter. And the German government has opened an investigation into Volkswagen, as Chancellor Angela Merkel pressed the carmaker to come clean.

Amid growing criticism by government and opposition politicians in Berlin, transport minister Alexander Dobrindt yesterday said he had set up an investigative commission that will visit VW headquarters in Wolfsburg this week.

In her first comments since the revelations by the EPA, Ms Merkel said VW executives must take action.

“Considering the difficulty of the situation, there has to be full transparency and an effort to clarify the whole matter. I hope the facts will be put on the table as quickly as possible,” said Ms Merkel.


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