Volkswagen CEO Steps Down After Car Company Scandal is Revealed
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The German car company Volkswagen recently overtook Toyota as being the No.1 global carmaker in sales. The country is known for their automotive production and environmental friendliness but recent news has changed the way this company will be looked at in the foreseeable future.
On Friday the Environmental Protection Agency announced that since 2009 Volkswagen has been installing software in various ‘clean diesel’ vehicles that purposely lowers the vehicle’s emissions when being tested for emissions. Any vehicle that has a Type EA 189 diesel engine has one of these ‘defeat devices’. This includes Audi A3 and the VW Jetta, Beetle, Golf and Passat Models.
There were 482,000 ‘clean diesel’ cars in America that were breaking the clean air laws. The company have stopped US sales for their 2015/2016 'clean diesel' vehicles. Violators of the Violating Clean Air Act are fined £25,500 per noncompliant vehicle. This could mean that Volkswagen might see fines up to £11.8 million in fines. Last year the company made £7.68 million in profit.
On Tuesday, more information came out regarding the scandal. In addition to the cars being sold in the States, 11 million ‘clean diesel’ vehicles were sold worldwide, mainly in Europe. Angela Merkel has called for “full transparency” from Volkswagen in clearing up the case. All of these vehicles will need to be replaced.
Today CEO Volkswagen Martin Winterkorn stepped down at the company’s annual press conference in Berlin saying he was endlessly sorry for the “manipulation”‘ and “betrayed the trust” of millions of people. The repercussions will be extensive to the company. Over the past week share prices have unsurprisingly been falling. Not only have they set aside £4.7bn to cover scandal costs, but there may also be potential criminal prosecution.