Volkswagen chief quits over emissions scandal

Resignation comes a day after asking the staff and public for trust

Shares in Volkswagen jumped yesterday after CEO Martin Winterkorn announced his resignation, days after admitting that the world’s top-selling carmaker had rigged diesel emissions to pass US tests during his tenure.

In a statement, Winterkorn took responsibility for the “irregularities” found in diesel engines but said he was “not aware of any wrongdoing on my part.”

“Volkswagen needs a fresh start, also in terms of personnel,” he said. “I am clearing the way for this fresh start with my resignation,” he said.

Winterkorn’s statement followed a crisis meeting of the Volkswagen supervisory board’s executive committee. Its acting chairman, Berthold Huber, told reporters moments later that company directors are “resolved to embark with determination on a credible new beginning.”

There was no immediate decision on a new CEO. Huber said that will be discussed only at a board meeting tomorrow.

Winterkorn said the company must continue providing “clarification and transparency.”

“This is the only way to win back trust. I am convinced that the Volkswagen Group and its team will overcome this grave crisis,” he added.

Stocks in Volkswagen closed 5.19% higher after a two-day rout over the widening pollution test cheating scandal.

The share ended the day at €111.50 minutes after Volkswagen chief executive Martin Winterkorn announced his resignation. The higher close booked by the heavyweight also lifted the Dax, which finished the session 0.44% ahead at 9,612.62 points.

Volkswagen chief quits over emissions scandal

After a two-day free fall that had axed 35%, or €25bn, off the company’s market value on Monday and Tuesday, the shares had bounced back. Volkswagen shares were up 8.7% at €121 following his resignation.

The share price still has a long way to go to recoup the billions wiped off its market value in the first two days of trading after the US Environmental Protection Agency announced that Volkswagen is violating the Clean Air Act.

Winterkorn, Volkswagen’s boss since 2007, had come under intense pressure since the disclosure that stealth software makes VW’s 2009-2015 model cars powered by 2.0-litre diesel engines run cleaner during emissions tests than in actual driving.

The EPA accused Volkswagen of installing the “defeat device” in 482,000 cars sold in the US. Volkswagen then acknowledged that similar software exist in 11 million diesel cars worldwide.

Huber said that “Mr Winterkorn had no knowledge of the manipulation of emission values” and praised the departing CEO’s “readiness to take responsibility in this difficult situation for Volkswagen.”

Before the scandal broke, Winterkorn, 68, had been expecting to get a two-year contract extension at the board meeting. His resignation came a day after he issued a video message asking staff and the public “for your trust on our way forward.”

The EPA said Volkswagen could face fines of up to €16bn. Other governments from Europe to South Korea have begun their own investigations, and law firms have already filed class-action suits on behalf of customers.

Volkswagen directors renewed pledges of a thorough investigation after Winterkorn’s resignation.

“We will clear up these events with all the possibilities we have inside the company and ensure that those involved are punished severely,” said Stephan Weil, the governor of Lower Saxony state, which holds a 20% stake in Volkswagen.

Weil said the company itself would file a criminal complaint, “because we have the impression that criminally relevant actions may have played a role here”.

The prosecutors’ office in Braunschweig, near Volkswagen’s Wolfsburg headquarters, said earlier that they are collecting information and considering opening an investigation against employees of Volkswagen who might be responsible.

Prosecutors said they already received several criminal complaints. Anyone can file a criminal complaint in Germany, and prosecutors must decide whether to act on them.

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