VW Poised To Face an Unprecedented Internal Upheaval
With over 11 million cars being the subject of intense scrutiny around the world, Volkswagen seems to be up a creek and in serious need of a paddle. The company’s stock price has plummeted in the last few days, and the U.S. Environmental Protection Agency, along with the Department of Justice, have begun lobbying a criminal case against the manufacturer where it could fine VW up to $18 billion. Add to that, U.S. diesel sales of most VW models have been halted, and the recall 482,000 TDi models throughout the U.S., and you can see that things are looking quite dire. However, through it all, the company’s CEO Martin Winterkorn, has remained steadfast at his post, even while many believe he should resign. Winterkorn is seen as the architect of VW, including the Type EA 189 diesel engine that’s causing this massive headache for the company. RELATED: Check Out the 2015 VW Golf R Here
For those who haven’t been following the story closely, the scandal revolves around the Type EA 189 diesel engine, and a piece of software that allows the car to cheat emissions testing by putting the car into a “test mode,” where it delivers better emissions readouts. Though this engine is at the center of the fiasco, the EPA is now expanding its scope to other VW diesel engines and almost every other diesel engine currently being sold in the U.S.
The Type EA 189 engine was introduced just two years after Winterkorn took office. Given Winterkorn’s propensity to be extremely detail-oriented with all of his company’s products, many believe he knew about the cheat. Keeping that in mind, earlier today, the embattled CEO delivered another apology via a video posted to the company’s website:
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If Winterkorn, or any of VW’s top brass for that matter, manage to retain their posts through this fiasco, it will be quite the feat. While no one has yet stepped down, rumors are flying that the resignations of many VW executives will be forthcoming, including Winterkorn’s.
Additionally, VW just released that the company has already set aside $7.2 billion to resolve the issues for the cars affected. However, as stated above, the fines VW is facing could well exceed that number very quickly.
With the issue going global, the company possibly facing buying back all of the cars affected, and a Department of Justice inquiry due to VW accepting $51 million in U.S. government aid for clean air vehicles, this could potentially turn into one of the biggest crises ever to face the auto industry. Given that, VW is likely to go through one of the largest internal upheavals ever seen.
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