Volkswagen scandal leads to CEO resignation

On Wednesday the Volkswagen scandal forced Volkswagen (VW) CEO Martin Winterkorn to resign.

It came to light this past week that the world’s top-selling car manufacturer was subverting emissions testing during his tenure.

Over 500, 000 Volkswagen diesel cars were installed with defeat devices which caused them to run more efficiently when they were being tested.

When they were not being tested, these vehicles emitted 40 times the legal limit of carbon into the atmosphere.

Models affected include the Jetta, Golf, Passat, Audi A3 and Beatle for the years 2009-2015.

When the scandal broke Winterkron, who has lead VW since 2007 said that he was “deeply sorry,” for the deception.

The revelations have hit VW hard, with the company losing 20 percent of its value on the stock market when the scandal broke on Friday, nearly $15 billion.

VW is also facing $18 billion in fines and has halted the sale of all affected vehicles in the U.S. and Canada.

In addition to the corporate fines, the EPA could slap VW with a $37, 500 per vehicle on top of a $3, 750 fine per individual for every violation of the Clean Air Act. In all those fines could reach nearly $2 billion.

Winterkorn submitted his resignation to VW’s board of directors as a sign of action and transparency on this scandal.

“I am doing this in the interests of the company even though I am not aware of any wrongdoing on my part,” his statement said. “Volkswagen needs a fresh start … I am clearing the way for this fresh start with my resignation.”

VW has admitted that 11 million vehicles worldwide had such defeat software installed and that the company had set aside $6.5 billion to deal with the scandal.

 

[Bloomberg] [The Associated Press]