Pressure builds on Volkswagen CEO as emission-cheating probe spreads
FRANKFURT - Reuters
AFP photoThe scandal engulfing Volkswagen, which has admitted cheating diesel vehicle emissions tests in the United States, spread on Sept. 22 as South Korea said it would conduct its own investigation and a French minister called for an EU-wide probe.
The German carmaker’s shares fell to a new three-year low in early trade, extending Monday’s 19 percent plunge after it admitted to using software that deceived U.S. regulators measuring toxic emissions.
Europe’s biggest automaker could face penalties of up to $18 billion in the United States, as well as class-action lawsuits from buyers and damage to its reputation, with U.S. regulators alleging it misled them for more than a year. A committee of Volkswagen’s supervisory board is due to meet on Sept. 23 to discuss the crisis. The full board is due to meet on Sept. 25 to extend Chief Executive Martin Winterkorn’s contract until end-2018.
“I am sure that there will be personnel consequences in the end, there is no question about it,” supervisory board member Olaf Lies told German radio station Deutschlandfunk on Sept. 22.
Analysts had been hoping Winterkorn’s victory in his power struggle with Piech would allow him to focus on tackling the carmaker’s long-running underperformance in North America as well as sharply slowing demand in its main profit center, China.
EU-level inquiry ‘needed’
French Finance Minister Michel Sapin said on Sept. 22 a broad European Union-level inquiry was needed too.
“It has to be done at a European level,” he told Europe 1 radio. “We are a European market with European rules. It is these that have to be respected. It is these that have been violated in the United States.”
There have been no suggestions so far that other carmakers have engaged in the same practices as Volkswagen. German rivals BMW and Daimler have said the accusations against Volkswagen did not apply to them.
The way carmakers test vehicles has been coming under growing scrutiny from regulators worldwide amid complaints from environmental groups that they use loopholes in the rules to exaggerate fuel-saving and emissions results.
The South Korean probe into Volkswagen will involve 4,000 to 5,000 Jetta, Golf and Audi A3 vehicles produced in 2014 and 2015, Park Pan-kyu, a deputy director at South Korea’s environment ministry, told Reuters.
The ministry will consider recalling those vehicles after conducting the investigation, he said.