Thank the maker for Volkswagen, today has been a slow news day with plenty of twiddling of thumbs and waste-paper basketball competitions. Twiddling of thumbs and waste-paper basketball is something the PR machine over at Volkswagen has had very little time for as VW have just announced they have sacked their CEO, Martin Winterkorn.
Winterkorn has been the CEO of VW since 2007 and has overseen a transformation of unprecedented success. He has also overseen its dramatic downfall and although the captain never leaves the ship, VW’s attempt to deceive US air pollution laws meant Winterkorn had effectively scuttled the ship he once sailed in so proudly.
In a statement Winterkorn said: ” I am shocked by the events of the past few days. I am doing this in the interests of the company even though I am not aware of any wrong doing on my part. I am clearing the way for a fresh start with my resignation.”
Winterkorn has been put before the firing squad and taken the bullets for what many are saying is the biggest fraud ever committed by a car manufacture. The company developed complex software to make it look as though their diesel powered cars emitted low C02 emissions.
The deception was unraveled first in the US where over 500,000 cars were said to be using this “defeat device”. VW subsequently admitted 11 million cars were affected worldwide.
The vehicles sold to consumers with this “defeat device” are effectively breaking anti-pollution laws and measures designed to improve air quality and reduce fatalities caused by high polluting cars. In addition consumers believe they are lowering their carbon footprint and tax.
As a result VW’s share price has been seriously devalued on stock markets around the world, litigation will run into the billions. But perhaps the worst scenario is that VW could loose current and future sales as consumers loose confidence with how clean a VW branded car actually is.
Being the head of VW is a well paid job, Winterkorn earned a reputed 14 million euros a year before performance related bonuses. No one should feel sorry for Winterkorn.
He built up VW to a position of worldwide strength and in doing so cut corners in order to meet new emission’s regulations. Someone else will have to clear up the mess.