This is undoubtedly a dark phase for Volkswagen amidst the ‘dieselgate’ scandal involving up to 11 million oil-burning cars that are apparently fitted with an illegal “defeat device” which allows each car to cheat strict emissions tests in the US. The magnitude of these unfortunate turn of events are so far reaching that a mid-week dip in the Dow Jones Index was observed.
A scandal of this magnitude must somehow see the top guy taking responsibility, and that man is none other than the CEO of Volkswagen AG himself, Martin Winterkorn. Prior to his resignation, he said he was “stunned that misconduct on such a scale was possible in the Volkswagen Group” and mentioned that the company needs a fresh start – also in terms of personnel.
Winterkorn in his statement said “I have always been driven by my desire to serve this company, especially our customers and employees. Volkswagen has been, is and will always be my life. The process of clarification and transparency must continue. This is the only way to win back trust. I am convinced that the Volkswagen Group and its team will overcome this grave crisis.”
The misconduct that Winterkorn was referring to in his statement is a ‘defeat device‘ fitted to roughly 482,000 VW and Audi cars in the US. All these vehicles are powered by the four-cylinder 2.0-liter TDI turbodiesel engine and have a special software in the ECU that automatically detects when the car was put through EPA (Environmental Protection Agency) emissions testing, thus activating full emissions control by way of reducing engine output.
The EPA said the software allowed all US-bound VW and Audi models to fully comply with the emissions standards during lab testing, but in real-word driving the nitrogen oxides emissions are up to 40 times above the permissible limit. Under US federal law, the EPA can apply a maximum fine of $37,500 (RM164,193) per car which means the group could face a total fine of up to $18 billion (RM78 billion).
In light of Winterkorn’s resignation, he may receive over $32 million (RM140 million) as part of a severance pack and has since been succeeded by Porsche’s CEO Matthias Müller.