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ROME — Martin Winterkorn should be fired, then handed a dictionary so he can learn the meaning of “clean” technology.
Mr. Winterkorn is chairman of the management board (CEO, in effect) of Volkswagen AG, Germany’s mightiest industrial company. It is the world’s No. 2 car maker and one of Germany’s, and the world’s, best-known brands – the very symbol of reliable Teutonic technology, performance and value. Volkswagen, whose marques include VW, Porsche, Audi, Lamborghini and Bentley, can be bought in almost every country; they are status symbols.
The Volkswagen brand, along with the Germany Inc. brand, is worth a lot less than it was before Saturday, when the U.S. Environmental Protection Agency accused the company of rigging the emissions data on almost half a million of its diesel-powered cars sold in the United States between 2009 and 2015. On Tuesday Volkswagen said that 11 million of its cars worldwide had been rigged to fool air-quality regulators, making a mockery of Volkswagen’s “clean” diesel technology push.
On Monday and Tuesday, Volkswagen shares lost 31 per cent on the German bourse, shedding €25-billion ($27.8-billion U.S.) of value, and the company set aside €6.5-billion to cover crisis-related costs. The amount seems absurdly low given the cost of the car recalls, the legal onslaught and the potential fines – up to $18-billion from the EPA alone – that the company faces, not just in the United States but in other countries, including France, Germany and South Korea, that have or are about to launch investigations into the emissions cheating scandal.
Already, one class-action lawsuit is rolling and others are inevitable. Criminal charges are not out of the question for the company that has been dubbed the “Lance Armstrong” of the automotive world.
Volkswagen deserves the pain, for using “defeat” software to fool air-quality regulators into thinking the cars are far less polluting than they really are. It was no technological accident on the company’s part. By all accounts so far, it was a deliberate fraud on the EPA, the public and on Volkswagen customers. Because Volkswagen admitted so. In the five stages of crisis management – denial, anger, bargaining, depression and acceptance – the company immediately ditched the first three and embraced the last two.
On Monday night in New York, Michael Horn, the boss of Volkswagen U.S., dropped a bombshell. Speaking at a company event to launch the new VW Passat sedan, he said: “Our company was dishonest with the EPA, and with the California Air Resources Board and with all of you, and in my German words: We have totally screwed up …. This kind of behaviour is totally inconsistent with our qualities …We will pay what we have to pay.”
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