BUSINESS
09/23/2015 11:13 am ET Updated Jan 04, 2017

Volkswagen CEO Martin Winterkorn Resigns Amid Diesel Scandal

Volkswagen CEO Martin Winterkorn has resigned from the company.

The move comes amid a massive scandal for the car-making giant, after it acknowledged having installed software on some 11 million diesel vehicles to circumvent emissions tests.

“I am shocked by the events of the past few days. Above all, I am stunned that misconduct on such a scale was possible in the Volkswagen Group," Winterkorn said in a statement.

"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 wrongdoing on my part," he added.

Fabrizio Bensch / Reuters
Former Volkswagen CEO Martin Winterkorn.

The Environmental Protection Agency revealed last Friday that Volkswagen had installed software in diesel Volkswagen and Audi models from 2009 to 2015 that helped sidestep the EPA’s required emissions testing. The cars appeared to be clean vehicles during testing, but emitted many more pollutants once they were sold and out on the road.

Volkswagen then admitted this week that the deception went far beyond its U.S. fleet. Eleven million cars are affected worldwide, more than 20 times what the EPA had originally said.

As a result, Volkswagen's vehicles may have released 1 million metric tons of pollution into the air each year, according to an analysis by The Guardian. This is about equal to the combined emissions for all the U.K.'s power stations, vehicles, industry and agriculture, the paper said. 

The company said that it would set aside 6.5 billion euros, or about $7.3 billion, in the current quarter to cover the costs of bringing its cars into compliance. It’s unclear whether that will cover the cost of inevitable fines from the U.S. and European governments. 

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The company’s stock is up after Winterkorn’s announcement, following a sharp, several day drop in the price. The stock has lost about a third of its value since Sept.18. 

There had been speculation about Winterkorn's fate since news of the scandal broke last Friday. His contract was up for renewal this Friday, according to the BBC.

Winterkorn's full statement:

I am shocked by the events of the past few days. Above all, I am stunned that misconduct on such a scale was possible in the Volkswagen Group.

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 wrongdoing 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.

This post has been updated with new information throughout.

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