Volkswagen boss under pressure as US scandal wipes €25bn off stock
Published 23/09/2015 | 02:30
Volkswagen chief executive officer (ceo) Martin Winterkorn vowed to get to the bottom of the scandal shaking the carmaker, and do everything possible to prevent such an incident from happening again, but the German executive's own job may already be hanging in the balance.
"At this point, I don't have the answers to all the questions," Winterkorn said in a video on VWs website. "But we're in the process of ruthlessly investigating the issue, and to that end everything will be put on the table as fast, thoroughly and transparently as possible."
Yesterday the company said 11 million vehicles have the diesel engines at the centre of a widening scandal over allegedly faked pollution controls. VW has set aside €6.5bn to cover the likely costs. Shares have fallen 38pc in two days, wiping out €25bn of value. The executive committee will meet today, sources said. "It's not just a US matter for VW - you have regulators all over the globe looking into it with potentially numerous fines to come," said Vincenzo Longo, a strategist for IG Group in Milan. "We don't see any stop to this bloodbath unless there is a change at the head of VW and full co-operation with authorities. Some heads need to roll to get investors buying back VW."
As ceo Mr Winterkorn has been at the centre of scrutiny since the US Environmental Protection Agency claimed last Friday that VW cheated on air-pollution tests.
While the 68-year-old ceo repeated yesterday that he's deeply sorry and promised a thorough investigation, he didn't specifically comment on his role.
Adding to the pressure, regulators in Germany, France, South Korea and Italy are now looking at the case.
Germany said it will send an investigative team led by Deputy Transport Minister Michael Odenwald to VW's headquarters in Wolfsburg this week to speak with officials and examine documents. The team will seek to determine whether the cars affected in the case were built according to German and European standards, the ministry said.
The so-called defeat device at the centre of the VW storm was installed in some diesel engines, installed in models including the VW Passat sedan and the Audi A3 compact.
The US Justice Department has begun its own probe into the matter, according to two US officials familiar with the inquiry. (Bloomberg)