|
 A source close to the company said a five-member executive
committee was grilling Winterkorn at the company's headquarters in
Wolfsburg, Germany, and was likely to make a recommendation on his
future ahead of a full board meeting on Friday.
Volkswagen is under huge pressure to act, with its shares down more
than a third in value since the crisis broke. German Chancellor
Angela Merkel has called for it to move "as quickly as possible" to
restore confidence in a company held up for generations as a paragon
of German engineering excellence.
But the board is in a tricky situation, with the 68-year-old CEO
showing no sign of resigning after a hitherto highly successful
eight year reign, in which the company doubled its sales and almost
tripled its profits.
"VW needs a fresh start and in our view a new CEO," said Evercore
ISI analyst Arndt Ellinghorst.
A story in the Tagesspiegel newspaper, denied by Volkswagen, said
the board would replace him with Matthias Mueller, head of the
automaker's Porsche sports car business.
Winterkorn, who was due to have his contract extended at Friday's
board meeting, did not mention his future in a video message posted
on the company's website on Tuesday, in which he repeated his
apology for a scandal which has wiped out tens of billions of
dollars from the company's value.
The U.S. Environmental Protection Agency (EPA) said on Friday
Volkswagen could face penalties of up to $18 billion for cheating
emissions tests on some of its diesel cars.
The story has sent shockwaves through the car market, with dealers
in the United States reporting people holding back from buying
diesel cars and "#dieselgate" trending on Twitter.
The U.S. Justice Department has launched a criminal probe, a source
familiar with the matter said. New York and other state attorneys
general are also forming a group to investigate, New York Attorney
General Eric Schneiderman said.
“No company should be allowed to evade our environmental laws or
promise consumers a fake bill of goods," Schneiderman said in a
statement
Other countries in Europe and Asia have said they will also launch
investigations into Volkswagens and other vehicles.
"INVESTOR'S NIGHTMARE"
Environmentalists have long complained that carmakers game the
testing regime to exaggerate the fuel-efficiency and emissions
readings of their vehicles. European politicians on Wednesday voted
to speed up rules to tighten compliance with pollution limits on
cars.
European car association ACEA said that so far there was "no
evidence that this is an industry-wide issue".
But Societe Generale analysts said that while the uncertainty
prevailed, the whole autos sector was likely to be “dead money” for
a while.
[to top of second column] |
As for Volkswagen, Deutsche Bank called the scandal an “investor’s
nightmare” and cut its recommendation to “hold” from “buy”,
predicting rising costs for making diesel cars would wipe out the
company's cost-cutting program.
A precipitous two-day collapse in the company's share price appeared
to have stopped on Wednesday morning. At 1020 GMT, Volkswagen shares
were up 2.8 percent at 109 euros, after earlier touching a four year
low of 95.51 euros.
Volkswagen was challenged by authorities as far back as 2014 over
tests showing emissions exceeded California state and U.S. federal
limits, but held off admitting wrongdoing until regulators
threatened to withhold certification for its 2016 diesel models.
Winterkorn is likely to come under pressure from the board for the
time it took the company to respond to criticism.
In April this year, the CEO saw off a challenge to his leadership
when the board ousted long-time chairman Ferdinand Piech.
There was no sign emissions testing was part of Piech's criticism of
Winterkorn, although insiders say Piech was unhappy with
Volkswagen's underperformance in the United States, where sales of
VW-brand cars fell 10 percent last year to less than half of their
2018 target of 800,000 deliveries.
Winterkorn has long been accused by critics of an excessively
centralized and hands-on management style, which they say has led to
production delays and hindered the company's ability to adapt to
local market needs.
In 2012, the launch of the Lamborghini brand's Aventador got delayed
by about six months after the CEO requested a different dashboard
following a test drive, one company source said.
(Additional reporting by European, American and Asian bureaus;
Writing by Mark Potter; Editing by Peter Graff)
[© 2015 Thomson Reuters. All rights
reserved.]
Copyright 2015 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed. |
