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Volkswagen crisis: chief executive Martin Winterkorn resigns – as it happened Volkswagen crisis: chief executive Martin Winterkorn resigns – as it happened
(7 months later)
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And here’s our latest story on the VW scandal and Winterkorn’s decision to do the honourable thing:And here’s our latest story on the VW scandal and Winterkorn’s decision to do the honourable thing:
Volkswagen has announced the resignation of its chief executive, Martin Winterkorn, and said the fallout from the diesel emissions test scandal would result in further executive scalps and a likely criminal investigation in Germany.Volkswagen has announced the resignation of its chief executive, Martin Winterkorn, and said the fallout from the diesel emissions test scandal would result in further executive scalps and a likely criminal investigation in Germany.
Winterkorn said on Wednesday he took full responsibility for the scandal, in which the company admitted that 11m cars were installed with a defeat device that reduced emissions under test conditions only, but he denied personal wrongdoing.Winterkorn said on Wednesday he took full responsibility for the scandal, in which the company admitted that 11m cars were installed with a defeat device that reduced emissions under test conditions only, but he denied personal wrongdoing.
The company’s stock market value has fallen dramatically since the admission this week. As he resigned, Winterkorn described the situation facing the carmaker as a “grave crisis”.The company’s stock market value has fallen dramatically since the admission this week. As he resigned, Winterkorn described the situation facing the carmaker as a “grave crisis”.
Volkswagen faces up to £12bn in fines and is the subject of multiple investigations after the US Environmental Protection Agency accused it of manipulating tests on 18 September. Its executive committee said on Wednesday that it had voluntarily submitted a complaint to the state prosecutors’ office in Brunswick.Volkswagen faces up to £12bn in fines and is the subject of multiple investigations after the US Environmental Protection Agency accused it of manipulating tests on 18 September. Its executive committee said on Wednesday that it had voluntarily submitted a complaint to the state prosecutors’ office in Brunswick.
“In the view of the executive committee, criminal proceedings may be relevant due to the irregularities,” it said.“In the view of the executive committee, criminal proceedings may be relevant due to the irregularities,” it said.
Full story here:Full story here:
Related: Volkswagen CEO Martin Winterkorn quits over diesel emissions scandal
On that note, it’s time to close up for the evening. Thanks for all your comments and we’ll be back to cover all the latest developments.On that note, it’s time to close up for the evening. Thanks for all your comments and we’ll be back to cover all the latest developments.
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Here’s our explanation of how the defeat device worked and how VW cheated in emissions tests:Here’s our explanation of how the defeat device worked and how VW cheated in emissions tests:
Related: The Volkswagen emissions scandal explained
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This is not the first time Volkswagen has run foul of US authorities over pollution controls, CNBC is reporting:This is not the first time Volkswagen has run foul of US authorities over pollution controls, CNBC is reporting:
Volkswagen has had a previous run-in with U.S. authorities for selling vehicles that used so-called “defeat devices” to disable pollution-control systems in four models of its vehicles produced in 1973.Volkswagen has had a previous run-in with U.S. authorities for selling vehicles that used so-called “defeat devices” to disable pollution-control systems in four models of its vehicles produced in 1973.
News reports archived by the nonprofit Center for Auto Safety show the German automaker, then known as Volkswagenwerk AG, and its American subsidiary, Volkswagen of America, paid a $120,000 fine in March 1974 to settle a complaint filed by the Environmental Protection Agency over the use of so-called “defeat devices” that disabled certain pollution-control systems. The complaint said the use of the devices violated the U.S. Clean Air Act.News reports archived by the nonprofit Center for Auto Safety show the German automaker, then known as Volkswagenwerk AG, and its American subsidiary, Volkswagen of America, paid a $120,000 fine in March 1974 to settle a complaint filed by the Environmental Protection Agency over the use of so-called “defeat devices” that disabled certain pollution-control systems. The complaint said the use of the devices violated the U.S. Clean Air Act.
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Don’t question all diesel technology or the whole German motor industry because of the VW scandal, is the plea from the country’s VDA auto industry association. Reuters reports:Don’t question all diesel technology or the whole German motor industry because of the VW scandal, is the plea from the country’s VDA auto industry association. Reuters reports:
The head of VDA warned on Wednesday against calling into question all diesel technology because of the crisis at Volkswagen.The head of VDA warned on Wednesday against calling into question all diesel technology because of the crisis at Volkswagen.
“One shouldn’t make the mistake of using this case where software was manipulated to produce better test results to call into question all diesel technology,” VDA chief Matthias Wissmann said.“One shouldn’t make the mistake of using this case where software was manipulated to produce better test results to call into question all diesel technology,” VDA chief Matthias Wissmann said.
“The diesel that is used by the German auto industry in many configurations is a major driver of the reduction in CO2 emissions worldwide. Therefore we need a clear separation here,” he added. “My plea is, no general suspicion towards the German auto industry.”“The diesel that is used by the German auto industry in many configurations is a major driver of the reduction in CO2 emissions worldwide. Therefore we need a clear separation here,” he added. “My plea is, no general suspicion towards the German auto industry.”
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Here’s the view of one of Volkswagen’s biggest shareholders on the scandal. The BBC has spoken to AXA fund manager Gilles Guibout about Winterkorn’s resignation and the accusations against the company:Here’s the view of one of Volkswagen’s biggest shareholders on the scandal. The BBC has spoken to AXA fund manager Gilles Guibout about Winterkorn’s resignation and the accusations against the company:
There was no alternative - it is an attempt to keep the fire under control. He has tried to take all the responsibility but it is not easy to say if this will be enough.There was no alternative - it is an attempt to keep the fire under control. He has tried to take all the responsibility but it is not easy to say if this will be enough.
[The allegations have] been a real shock. We are a long term shareholder and we put a lot of emphasis on management credibility. The fall in the share price was too big for us to sell - it would not be in our clients’ interest to sell.[The allegations have] been a real shock. We are a long term shareholder and we put a lot of emphasis on management credibility. The fall in the share price was too big for us to sell - it would not be in our clients’ interest to sell.
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Volkswagen shares recovered some of the losses they have sustained since the emissions scandal broke at the start of the week. They closed 5.19% higher at €111.5, but the company has still lost around €26bn of value following the crisis.Volkswagen shares recovered some of the losses they have sustained since the emissions scandal broke at the start of the week. They closed 5.19% higher at €111.5, but the company has still lost around €26bn of value following the crisis.
Overall European markets have - mostly - regained some ground, helped by the rebound in VW and comments from European Central Bank president Mario Draghi that the bank was ready to adjust its QE programme if necessary in the light of economic circumstances. He told the European parliament:Overall European markets have - mostly - regained some ground, helped by the rebound in VW and comments from European Central Bank president Mario Draghi that the bank was ready to adjust its QE programme if necessary in the light of economic circumstances. He told the European parliament:
The asset purchase programme has sufficient in-built flexibility. We will adjust its size, composition and duration as appropriate, if more monetary policy impulse should become necessary.The asset purchase programme has sufficient in-built flexibility. We will adjust its size, composition and duration as appropriate, if more monetary policy impulse should become necessary.
With a rebound in commodity prices despite yet more weak Chinese data, the final scores showed:With a rebound in commodity prices despite yet more weak Chinese data, the final scores showed:
On Wall Street, the Dow Jones Industrial Average was hit by weak US manufacturing data, which showed growth at a two year low in September, and is currently 106 points or 0.6% lower.On Wall Street, the Dow Jones Industrial Average was hit by weak US manufacturing data, which showed growth at a two year low in September, and is currently 106 points or 0.6% lower.
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Volkswagen’s supervisory board has admitted criminal charges could follow after the revelation of the emissions scandal, and it has called in the state prosecutor.Volkswagen’s supervisory board has admitted criminal charges could follow after the revelation of the emissions scandal, and it has called in the state prosecutor.
As mentioned earlier it plans to set up a task force to investigate what happened, with external advisors.As mentioned earlier it plans to set up a task force to investigate what happened, with external advisors.
It also thanked Martin Winterkorn for his “invaluable contributions” to VW and noted he had no knowledge of the manipulation of emissions data.It also thanked Martin Winterkorn for his “invaluable contributions” to VW and noted he had no knowledge of the manipulation of emissions data.
And it warned anyone found to have committed wrongdoing would face the consequences. Here is the full statement:And it warned anyone found to have committed wrongdoing would face the consequences. Here is the full statement:
1. The Executive Committee takes this matter extremely seriously. The Executive Committee recognizes not only the economic damage caused, but also the loss of trust among many customers worldwide.1. The Executive Committee takes this matter extremely seriously. The Executive Committee recognizes not only the economic damage caused, but also the loss of trust among many customers worldwide.
2. The Executive Committee agrees that these incidents need to be clarified with great conviction and that mistakes are corrected. At the same time, the Executive Committee is adamant that it will take the necessary decisive steps to ensure a credible new beginning.2. The Executive Committee agrees that these incidents need to be clarified with great conviction and that mistakes are corrected. At the same time, the Executive Committee is adamant that it will take the necessary decisive steps to ensure a credible new beginning.
3. The Executive Committee has great respect for Chairman Professor Dr. Winterkorn’s offer to resign his position and to ask that his employment agreement be terminated. The Executive Committee notes that Professor Dr. Winterkorn had no knowledge of the manipulation of emissions data. The Executive Committee has tremendous respect for his willingness to nevertheless assume responsibility and, in so doing, to send a strong signal both internally and externally. Dr. Winterkorn has made invaluable contributions to Volkswagen. The company’s rise to global company is inextricably linked to his name. The Executive Committee thanks Dr. Winterkorn for towering contributions in the past decades and for his willingness to take responsibility in this criticall phase for the company. This attitude is illustrious.3. The Executive Committee has great respect for Chairman Professor Dr. Winterkorn’s offer to resign his position and to ask that his employment agreement be terminated. The Executive Committee notes that Professor Dr. Winterkorn had no knowledge of the manipulation of emissions data. The Executive Committee has tremendous respect for his willingness to nevertheless assume responsibility and, in so doing, to send a strong signal both internally and externally. Dr. Winterkorn has made invaluable contributions to Volkswagen. The company’s rise to global company is inextricably linked to his name. The Executive Committee thanks Dr. Winterkorn for towering contributions in the past decades and for his willingness to take responsibility in this criticall phase for the company. This attitude is illustrious.
4. Recommendations for new personnel will be presented at the upcoming meeting of the Supervisory Board this Friday.4. Recommendations for new personnel will be presented at the upcoming meeting of the Supervisory Board this Friday.
5. The Executive Committee is expecting further personnel consequences in the next days. The internal Group investigations are continuing at a high tempo. All participants in these proceedings that has resulted in unmeasurable harm for Volkswagen, will be subject to the full consequences.5. The Executive Committee is expecting further personnel consequences in the next days. The internal Group investigations are continuing at a high tempo. All participants in these proceedings that has resulted in unmeasurable harm for Volkswagen, will be subject to the full consequences.
6. The Executive Committee have decided that the company will voluntarily submit a complaint to the State Prosecutors’ office in Brunswick. In the view of the Executive Committee criminal proceedings may be relevant due to the irregularities. The investigations of the State Prosecutor will be supported in all form from the side of Volkswagen.6. The Executive Committee have decided that the company will voluntarily submit a complaint to the State Prosecutors’ office in Brunswick. In the view of the Executive Committee criminal proceedings may be relevant due to the irregularities. The investigations of the State Prosecutor will be supported in all form from the side of Volkswagen.
7. The Executive Committee proposes that the Supervisory Board of Volkswagen AG create a special committee, under whose leadership further clarifying steps will follow, including the preparation of the necessary consequences. In this regard, the Special Committee would make use of external advice. Further details about this will be decided at the Supervisory Board meeting on Friday.7. The Executive Committee proposes that the Supervisory Board of Volkswagen AG create a special committee, under whose leadership further clarifying steps will follow, including the preparation of the necessary consequences. In this regard, the Special Committee would make use of external advice. Further details about this will be decided at the Supervisory Board meeting on Friday.
8. The Executive Committee is aware that coming to terms with the crisis of trust will be a long term task that requires a high degree of consistency and thoroughness.8. The Executive Committee is aware that coming to terms with the crisis of trust will be a long term task that requires a high degree of consistency and thoroughness.
9. The Executive Committee will work on these tasks together with the employees and the Management Board. Volkswagen is a magnificent company that depends on the efforts of hundreds of thousands of people. We consider it our task that this company regains the trust of our customers in every respect.9. The Executive Committee will work on these tasks together with the employees and the Management Board. Volkswagen is a magnificent company that depends on the efforts of hundreds of thousands of people. We consider it our task that this company regains the trust of our customers in every respect.
UpdatedUpdated
at 5.28pm BSTat 5.28pm BST
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Martin Winterkorn had no choice but to go following the discovery of the emissions scandal, says Karl Brauer at auto industry analyst Kelley Blue Book:Martin Winterkorn had no choice but to go following the discovery of the emissions scandal, says Karl Brauer at auto industry analyst Kelley Blue Book:
With more than 20 years at Volkswagen AG, during which he rapidly rose through the ranks to lead the automaker, Winterkorn appeared ready to bask in the glory of seeing VW become the world’s largest automaker.With more than 20 years at Volkswagen AG, during which he rapidly rose through the ranks to lead the automaker, Winterkorn appeared ready to bask in the glory of seeing VW become the world’s largest automaker.
But VW’s intentional, widespread efforts to deceive regulators across the globe suggests a dark side to the company’s growth. This activity has been going on for years, meaning Winterkorn either had full knowledge of the deception, and approved it, or he was negligent in uncovering and stopping it. Either situation reflects poorly on Winterkorn and his leadership skills, and given the tragic impact this scandal will have on VW, his resignation wasn’t just likely, but necessary.But VW’s intentional, widespread efforts to deceive regulators across the globe suggests a dark side to the company’s growth. This activity has been going on for years, meaning Winterkorn either had full knowledge of the deception, and approved it, or he was negligent in uncovering and stopping it. Either situation reflects poorly on Winterkorn and his leadership skills, and given the tragic impact this scandal will have on VW, his resignation wasn’t just likely, but necessary.
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Volkswagen says it will create a task force with an external advisor to look into the emissions scandal.Volkswagen says it will create a task force with an external advisor to look into the emissions scandal.
Further heads are likely to roll after Martin Winterkorn’s resignation, with more news expected after Friday’s board meeting.Further heads are likely to roll after Martin Winterkorn’s resignation, with more news expected after Friday’s board meeting.
Volkswagen Says: Greatly Respect CEO Martin Winterkorn's DecisionVolkswagen Says: Greatly Respect CEO Martin Winterkorn's Decision
Volkswagen Says: Expect Further Personnel Consequences In Coming DaysVolkswagen Says: Expect Further Personnel Consequences In Coming Days
Volkswagen Says: To Discuss New Personnel Proposals On FridayVolkswagen Says: To Discuss New Personnel Proposals On Friday
Volkswagen Says: Creating Task Force To Clear up CaseVolkswagen Says: Creating Task Force To Clear up Case
Volkswagen Says: Task Force Will Include External AdvisorVolkswagen Says: Task Force Will Include External Advisor
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at 4.37pm BSTat 4.37pm BST
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No word either on any compensation for Winterkorn. Which if it happens is likely be be controversial, to say the least.No word either on any compensation for Winterkorn. Which if it happens is likely be be controversial, to say the least.
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No news yet on a successor to Winterkorn, although reports on Tuesday suggested he could be replaced by Matthias Müller, the current chief executive of Porsche. This was denied at the time.No news yet on a successor to Winterkorn, although reports on Tuesday suggested he could be replaced by Matthias Müller, the current chief executive of Porsche. This was denied at the time.
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Volkswagen shares have reacted favourably to the news of Winterkorn’s departure, with investors perhaps sensing there could indeed now be a fresh start as he suggested.Volkswagen shares have reacted favourably to the news of Winterkorn’s departure, with investors perhaps sensing there could indeed now be a fresh start as he suggested.
Up around 5% before the news, they now stand 8.35% higher at €114.Up around 5% before the news, they now stand 8.35% higher at €114.