Volkswagen CEO’s Days Appear Numbered As Emissions Crisis Deepens

Martin Winterkorn’s days as head of Volkswagen AG appeared numbered on Tuesday after the German carmaker said a scandal over falsified vehicle emission tests in the United States could affect 11 million of its cars worldwide.

The Tagesspiegel newspaper, citing unidentified sources on Volkswagen’s supervisory board, said the board would decide on Friday to replace Winterkorn with Matthias Mueller, the head of the automaker’s Porsche sports car business.

A Volkswagen spokesman denied the report. The company later said it would post a video statement by Winterkorn at 1500 GMT. A spokesman for Porsche said Mueller was attending a Volkswagen board meeting at its headquarters in Wolfsburg.

 A key Winterkorn ally withheld public support for the under-fire chief executive on Tuesday.

“I don’t want to preempt the upcoming intense deliberations and will not comment on details or any consequences,” Stephan Weil, head of the German state of Lower Saxony, told reporters in Hanover when asked about Winterkorn’s future.

Weil, a supervisory board member representing Volkswagen’s second-largest shareholder, earlier this year helped Winterkorn to see off a challenge to his leadership by long-time chairman Ferdinand Piech.

Shares in Europe’s biggest carmaker plunged almost 20 percent on Monday after it admitted using software that deceived U.S. regulators measuring toxic emissions in some of its diesel cars.

The stock tumbled another 20 percent to a four-year low on Tuesday after some countries in Europe and Asia said they would launch investigations themselves.

Volkswagen said it would set aside 6.5 billion euros ($7.3 billion) in its third-quarter accounts to help cover the costs of the biggest scandal in its 78-year-history, blowing a hole in analysts’ profit forecasts.

It also warned that sum could rise, adding diesel cars with so-called Type EA 189 engines built into about 11 million Volkswagen models worldwide had shown a “noticeable deviation” in emission levels between testing and road use.

Volkswagen sold 10.1 million cars in the whole of 2014.

The U.S. Environmental Protection Agency (EPA) said on Friday Volkswagen could face penalties of up to $18 billion for cheating emissions tests. The carmaker also faces lawsuits and damage to its reputation that could hit sales, while media reports have said the U.S. Department of Justice has opened a criminal inquiry into the matter.


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