(CN) – Volkswagen’s CEO resigned Wednesday but denied he had done anything wrong, though he admitted VW had installed emissions-masking software in 11 million diesel engines worldwide, exposing the company to $18 billion in fines in the United States alone.
Martin Winterkorn said he would step down “in the interests of the company.” He blamed the scandal on “grave errors” by a “very few” VW employees, and said he was “not aware of any wrongdoing on my part.”
Winterkorn has been CEO of Volkswagen since 2007 – two years before the cheating software was installed. He was in charge of research and development.
Winterkorn picked a good time to leave. More than 60 class actions have been filed against Volkswagen since Monday, according to the Courthouse News database.
They were spurred by the EPA’s announcement on Friday that VW had installed pollution-masking software in nearly 500,000 diesel autos sold in the United States.
The software allows VW’s “clean diesel” engines to spew 40 times the amount of nitrogen dioxide permitted by regulation during normal driving, and kicks in only during emissions testing, when the engines test clean. Nitrogen dioxide is a key component of smog.
Based on EPA estimates, VWs in the United States emitted 12,000 more tons of NO2 pollutants per year than allowed.
Removing the pollution controls makes the cars feel peppier and more responsive on the road. It also exposed VW to Clean Air Act fines of up to $37,500 per vehicle in the United States. Multiplied by 500,000 cars, the fines could come to $18.75 billion .
And that’s before the civil class actions, and not counting regulatory and possibly criminal charges around the world.
Most of the 11 million VW diesels are believed to be on the roads in Europe, where diesels are far more popular than in the United States.
Volkswagen advertised its “TDI Clean Diesel Technology” on TV with a promo showing an elderly woman holding a white scarf to an exhaust pipe, then showing it, still pristine, to her friends as proof diesel is clean, as detailed in a class action filed Tuesday in Corpus Christi.
The EPA has ordered Volkswagen to recall nearly 500,000 of the rigged cars. The class action plaintiffs say that removing the “defeat devices” software will reduce their cars’ horsepower and value.
Volkswagen said it will write off $7.3 billion in this financial quarter to fix the rigged vehicles – roughly half of the profits it expected this year – but the stock market already has punished it more severely than that. Its share price has fallen by about 30 percent since Monday – from $160 to $110 – knocking $26 billion off the company’s market capitalization.
Volkswagen surpassed Toyota this summer as the world’s largest automaker, by sales, but that’s likely to change now.
Germany, Italy, France, South Korea and attorneys general from several U.S. states are investigating.
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