VW CEO Steps Down Amid Scandal

Volkswagen is in for some serious problems following its emissions scandal.

VW installed a switch of sorts in the ECU on its TDI models. This switch sensed when it is being tested for emissions and put it in a mode that significantly reduced emissions. Once the diagnostics were over, it returned to its normal mode, which delivered better-than-average power for a diesel engine.

Well, the EPA eventually caught on, and VW CEO, Martin Winterkorn, admitted to the switch. After further investigation, the EPA found that the actual emissions were 10 to 40 times higher than testing indicated. Initial reports indicate that VW could be in store an $18 billion fine from the EPA, but VW has set back just over $7 billion for the potential fine.

Amid this scandal, VW’s CEO has been surprisingly up front and honest. Unfortunately, being honest wasn’t enough, as Dr. Winterkorn has announced his resignation today. The press release indicates that the resignation was his decision, but I suspect VW gave him a light nudge toward the door.

According to Dr. Winterkorn, “Volkswagen needs a fresh start” and he is “clearing the way for this fresh start with my resignation.”

There are no indications of who will replace Dr. Winterkorn, but whoever takes over has an uphill battle to gain the trust of buyers again. The brand will also be battling for survival, as an $18 billion fine will put a serious hole in its bank account. On top of all of this, we have yet to hear whether other countries will be issuing fines as well.

We’ll continue monitoring this developing story and bring you updates as they become available.