Martin Winterkorn, Volkswagen’s CEO, has resigned following a massive scandal which rocked the automaker. US environmental regulators recently discovered Volkswagen had modified programs and software in their vehicle’s computers to pass computerized emissions tests. Regulators first suspected this program effected around 500,000 vehicles, but since the initial discovery that number has skyrocketed to over 11 million vehicles worldwide. Volkswagen now faces massive penalties not only in the US, but from various different countries.
In regards to his resignation and the scandal Martin Winterkorn has stated, “”I am doing this in the interests of the company even though I am not aware of any wrongdoing on my part.” Winterkorn has also gone on to state he was totally unaware such a massive wrongdoing was taking place at his company and that he feels his resignation will allow the company to achieve a “fresh start”. Winterkorn had been CEO at Volkswagen for eight years prior to the scandal and had a clean corporate record as CEO and and previously as head of Audi.
After news broke of a potential recall of more than 11 million cars, shares of Volkswagen immediately crashed twenty percent. Volkswagen executives announced they have set aside approximately 6.5 billion euros to cover the costs of the recall. Shareholders and lawmakers are convinced the financial pain is not going to end there. It is believed Volkswagen will face another few billion in fines from various countries it does business in. Volkswagen officials are also being told to prepare for a possibly criminal prosecution over the issue.
The EPA believes this is an isolated issue and other car manufacturers were not involved in any way. Volkswagen recently overtook Toyota for most car purchases, an achievement they can now surely expect to lose. Volkswagen faces a long and costly road to redemption and recovery.