Martin Winterkorn, the CEO of Volkswagen, resigned Sept. 23, one day after the manufacturer acknowledged 11 million Volkswagen-made cars have software that dupes official emissions tests.
“I am shocked by the events of the past few days,” Winterkorn said in a statement. “Above all, I am stunned misconduct on such a scale was possible in the Volkswagen Group.”
The announcement came less than one week after the U.S. Environmental Protection Agency said the car company put software in diesel cars that turns emissions control systems off when the car isn’t undergoing official tests.
Volkswagen is faced with several fallouts, investors punished its stock to the chance that the U.S. government will levy billions of dollars in fines. There’s also the likelihood — already realized in Canada — that millions of its customers will file class-action lawsuits.
The report by the EPA and the California Air Resources Board states Volkswagen has known for more than a year that American inspectors had found irregularities with diesel cars made under the Volkswagen and Audi brands.
According to the agencies, the first discovery was made in May 2014 when researchers at West Virginia University found wide discrepancies when they compared the diesel cars’ performance in emissions tests to real-world driving conditions.
Eventually, the EPA and CARB say, they found that when the company’s 4-cylinder diesel cars detect they aren’t hooked up to widely used emissions testing equipment, they “emit up to 40 times more pollution” than allowed under U.S. standards.
In a letter to Volkswagen about the violations, the EPA and CARB noted that last year, VW only took “limited” action to address the issue – including a recall in December.
That recall didn’t go far enough, the agencies say, adding that VW only acknowledged it had designed “a sophisticated software algorithm” that changes the car’s emissions settings after U.S. officials made it clear they wouldn’t certify the carmaker’s upcoming 2016 diesel models if the problem persists.
“Using a defeat device in cars to evade clean air standards is illegal and a threat to public health,” the EPA’s Cynthia Giles said in announcing the Notice of Violation Friday. Giles is the assistant administrator for the Office of Enforcement and Compliance Assurance.
The initial U.S. report ordered VW to recall more than 480,000 cars; on Tuesday, the company acknowledged that worldwide, it needs to fix 11 million vehicles.
In his statement, Winterkorn added:
“As CEO I accept responsibility for the irregularities that have been found in diesel engines and have therefore requested the Supervisory Board to agree on terminating my function as CEO of the Volkswagen Group. I am doing this in the interests of the company even though I am not aware of any wrong doing on my part.
“Volkswagen needs a fresh start – also in terms of personnel. I am clearing the way for this fresh start with my resignation.
“I have always been driven by my desire to serve this company, especially our customers and employees. Volkswagen has been, is and will always be my life.
“The process of clarification and transparency must continue. This is the only way to win back trust. I am convinced that the Volkswagen Group and its team will overcome this grave crisis.”