By: Simon Morgan
Frankfurt (AFP) - German auto giant
Volkswagen shifted up a gear Wednesday in its plans to recall millions of cars
fitted with pollution-cheating software as it boosted efforts to find the
masterminds behind the scam.
Following the departures of chief
executive Martin Winterkorn and sales chief Christian Klingler in VW's
deepest-ever crisis that broke 12 days ago, more heads looked set to roll after
the new CEO Matthias Mueller vowed to be "ruthless" in getting to the bottom of
The steering committee of the carmaker's
supervisory board met on Wednesday to discuss the preliminary findings of the
internal investigation into a scam that has rocked the automobile sector and
wiped 29 billion euros ($32.5 billion) off VW's market capitalisation.
A dozen managers suspected of helping to develop and install the
sophisticated software, known as a defeat device, or simply aware of the fraud
have been suspended pending an internal inquiry, the monthly Manager Magazin
- Who knew what, when? -
Supervisory board member Olaf Lies said
"those people who allowed this to happen, or who made the decision to install
this software -- they acted criminally. They must take personal responsibility."
Regulatory and legal probes are underway
in Germany and other countries to find out who knew what and when, and German
prosecutors have also launched an investigation against 68-year-old Winterkorn.
VW's finance chief Hans-Dieter Poetsch, who has been tipped to take over as
supervisory board chief, could also find himself in the firing line, given his
close relationship with Winterkorn and his key role on VW's executive board.
"Poetsch's possible nomination as new supervisory board chief is looking
increasingly questionable," the business daily Handelsblatt quoted a fund
manager, Hans-Christian Hirt, as saying.
The suspect diesel engines went on sale in 2009, which suggested the
pollution-cheating software must have been under discussion within the company
as early as 2007 and 2008, the daily Sueddeutsche Zeitung wrote.
Winterkorn took the driving seat at VW in
2007. His predecessor Bernd Pischetsrieder and the former head of the Volkswagen
brand issued statements via their lawyers late on Tuesday denying they knew
anything about the manipulation.
- Millions of cars affected -
In the meantime, VW's luxury sports car maker Porsche named 47-year-old
Oliver Blume as its new CEO Wednesday, taking over from Mueller who had been in
the driving seat for five years until he was appointed head of the VW group last
Volkswagen, the world's biggest carmaker by sales, has admitted that up to 11
million diesel cars worldwide are fitted with devices that can switch on
pollution controls when they detect the car is undergoing testing.
They then switch off the controls when the car is on the road, allowing it to
spew out harmful levels of emissions.
Since the revelations on September 18, the VW share has seen nearly 40
percent of its value go up in smoke, although it was showing signs of
stabilisation on Wednesday, when it closed 2.68 percent higher at 97.75 euros on
the Frankfurt stock exchange.
The German government has given VW until October 7 to explain how it will
resolve the scandal.
Finance Minister Wolfgang Schaeuble blamed the scam on the same greed that
had led to the financial crisis.
"If you want to succeed on global markets, competition is brutal. Everyone
wants to be the biggest," he told reporters.
"It's the lust for fame, for recognition. Time and again we see where it
leads," he said.
Germany's Federal Transport Authority KBA threatened to withdraw road
approval for VW models in the country if the carmaker did not come up with the
recall plan by next week.
VW has said owners of the affected cars
would be notified "in the next weeks and months", adding that "all the brands
concerned are going to create Internet pages where clients will be able to
The British arm of Volkswagen said Wednesday it would recall and fix nearly
1.2 million vehicles.
- Tidal wave of lawsuits -
Lawsuits, including class-action
litigation, are also being filed in the United States.
VW has already said it will set aside 6.5 billion euros in provisions in the
third quarter, but analysts suggest one to three billion euros more could be
On top of that, VW also faces onerous regulatory fines, including up to $18
billion in the United States -- and the fallout on customer purchases cannot yet
Volkswagen owners in South Korea are
following their US counterparts in suing the company.
The consumer protection group Deutsche
Umwelthilfe said the entire European car industry was involved.
"It's not just a 'Volkswagen-gate,' it's
not just an affair affecting the whole of German industry. We have here fraud
organised at a European level," claimed the organisation's chief Juergen Resch.
- Martin Winterkorn