In a dramatic turn of events, Professor Dr. Martin Winterkorn has announced today that he is resigning from his position as Chairman of the Board of Management and CEO of the 12-brand Volkswagen Group empire.
The move comes after the explosive ‘dieselgate’ scandal where the US Environmental Protection Agency (EPA) revealed that diesel-powered Volkswagen and Audi vehicles sold in the US (four-cylinder Type 189 TDI engines) were fitted with a special software that is capable of detecting if the vehicle is being tested for exhaust emissions, and alters its engine mapping.
It was alleged that the software was responsible for discrepancies in exhaust emissions of up to 40 times between real-world driving conditions and laboratory testing.
In a statement to the press released today, Prof. Dr. Winterkorn said:
“I am shocked by the events of the past few days. Above all, I am stunned that misconduct on such a scale was possible in the Volkswagen Group.
"As CEO I accept responsibility for the irregularities that have been found in diesel engines and have therefore requested the Supervisory Board to agree on terminating my function as CEO of the Volkswagen Group. I am doing this in the interests of the company even though I am not aware of any wrong doing on my part.
"Volkswagen needs a fresh start – also in terms of personnel. I am clearing the way for this fresh start with my resignation.
"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."
Just six months ago, Winterkorn had successfully ousted Porsche family’s scion Ferdinand Piech from his positon as Chairman of the Supervisory Board of of Volkswagen AG.
One month ago, the board extended Winterkorn’s contract for another term, until 2018.
The unfolding drama for the one-time darling of Volkswagen AG’s shareholders is a lesson for CEOs chasing stellar growth results to please shareholders.
Under Winterkorn’s watch, Volkswagen AG went from a company that sold 5 million cars in 2003, to reach a record 10.14 million cars in 2014.
On Winterkorn’s resignation, the Executive Committee of Volkswagen AG’s Supervisory Board said:
“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 critical phase for the company. This attitude is illustrious.”
Rumour has it that the current CEO of Porsche AG, Matthias Muller, will be replacing Winterkorn.