The chief executive of Volkswagen has quit the car firm, insisting he was not involved in the emissions tests scandal that has rocked the automotive industry and could lead to one of the biggest ever legal claims.
Martin Winterkorn said the German company needed a fresh start but stressed he was “not aware of any wrongdoing on my part” as he stepped down as boss.
The resignation of Winterkorn follows five days of growing pressure on VW after the US Environmental Protection Agency (EPA) accused the carmaker of using a defeat device to cheat emissions tests on diesel cars.
The crisis could lead to millions of VW and Audi vehicles being recalled around the world and legal claims from motorists. Leigh Day, a UK law firm, said that if VW also manipulated tests in Europe then UK consumers could claim compensation.
Boz Michalowska, a partner at Leigh Day, said: “This could well lead to one of the largest group claims ever in this country against Volkswagen for the way in which consumers may have been misled in relation to their vehicle.”
Almost 50 class action lawsuits have already been filed in the US and Canada by law firms including Clifford Law and Hagens Berman. German public prosecutors are also examining a collection of legal claims that have been filed by private individuals. The US Department of Justice and the New York attorney general have also launched criminal investigations.
VW has admitted that 11m cars were fitted with the defeat devices and set aside €6.5bn (£4.8bn) to pay for the costs of the crisis. However, it also faces the prospect of fines of up to $18bn (£11.8bn) from US regulators and a prolonged legal battle on multiple fronts.
Almost €25bn, or a third, has been wiped off the value of VW this week, although shares in the carmaker rebounded 5% after Winterkorn’s resignation.
VW said in a statement on Wednesday that it has voluntarily reported itself to state prosecutors, paving the way for a criminal probe. It has also set up a special committee to lead its own investigation into the scandal which is likely to lead to more senior departures.
The executive committee, which is made up of five board directors, said they expected “further personnel consequences in the next days”.
It added: “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.”
However, the committee, which includes Wolfgang Porsche, a descendant of the company’s founder, insisted that Winterkorn “had no knowledge of the manipulation of emissions data”.
The committee said it had “tremendous respect for his willingness to nevertheless assume responsibility” and added that VW’s global expansion would be “inextricably linked to his name”.
As the carmaker seemed to be clearing the way to pin the scandal on workers below Winterkorn, Simon Walker, director general of the Institute of Directors criticised the company’s response.
He told the Guardian: “A company which has admitted to a flagrant violation of global rules and went to such extensive lengths to hoodwink officials has bigger questions to answer than just who takes the blame.
“For VW to get away with such an audacious con, proper oversight must have been lacking.
“Fitting 11m cars with a piece of software which artificially reduces vehicle emissions during regulators’ tests is not the work of a few rogue employees. That decision was taken and put into action by people of reasonable seniority.
“If the board members knew what was happening, that is clearly severe – and possibly criminal – malpractice. If they didn’t, then that is a dangerous failure of responsibility.”
VW’s full board will meet on Friday to discuss Winterkorn’s successor. The 20-strong board includes members of the Porsche and Piëch families, union leaders, politicians from Lower Saxony, where VW is based, and representatives from Qatar, a major shareholder.
VW employs more than 600,000 staff and sold than 10m cars last year. It accounts for one in four new car sales in Europe.
Germany’s vice-chancellor, Sigmar Gabriel, urged VW to work with German and US authorities to resolve the crisis swiftly.
“Ultimately, this must happen quickly,” he said. “We must not allow the impression to arise that this is a problem for the whole auto industry or that it raises questions over the integrity of Volkswagen overall. The 600,000 employees of VW cannot help it that individuals carried out criminal actions on whatever scale.”
In his resignation statement, Winterkorn said he was shocked by events.
“Above all, I am stunned that misconduct on such a scale was possible in the Volkswagen Group,” said Winterkorn, who has led the company since 2007.
“I am doing this in the interests of the company even though I am not aware of any wrongdoing 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.
“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.”
Earlier, Prof Karel Williams at Manchester Business School told BBC Radio 4’s Today programme that the VW scandal reflected badly on Germany.
“Germany has been lecturing the Greeks for years on how they cheated on the budget deficit calculations and now look at this Germany’s largest company is cheating on emissions,” Williams said.
“It’s not just a crisis for the company. It is a major set of issues about ineffective regulation as in Libor.”
The German government is now in danger of being dragged into the scandal after admitting that it already knew about defeat devices that could cheat emissions tests.
Written responses from the transport ministry to questions from the Green party in July show the government was aware of the devices. However, the transport ministry said it had “no knowledge” of the devices actually being used, and there was no mention of VW.
Oliver Krischer, the deputy leader of the Green party, told German television that this showed the government knew that car makers were trying to manipulate emissions tests. He said: “The government worked together with the auto industry, not to ensure that the emissions levels were reduced, but so that the measuring system was set up in such a way that on paper the cars met the necessary standards.”
However, Alexander Dobrindt, the transport minister, dismissed the claims as “false and inappropriate”.
Rival carmakers have insisted that VW is an isolated case and that there is no evidence that the scandal spreads beyond the German company.
The European Automobile Manufacturers’ Association claimed that European rules will soon require testing to be conducted in realistic driving conditions as well as in laboratories, creating the strictest regime in the world.
The ACEA said: “The ACEA will continue to engage with the European commission and national governments to address the current challenges and ensure that trust and confidence in the car industry and clean diesel technology are maintained.”
This article was written by Graham Ruddick, for theguardian.com on Wednesday 23rd September 2015 21.19 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010