CEO Martin Winterkorn Resigns as Volkswagen Rushes to Stem Growing Scandal (VIDEO)

At WSJ, "Volkswagen Races to Stem Growing Scandal":

BERLIN— Volkswagen AG raced Wednesday to contain the widening scandal threatening Germany’s most important company, ousting its chief executive and pledging to prosecute those involved in a scheme to cheat U.S. auto-pollution tests.

CEO Martin Winterkorn’s resignation follows a calamitous few days after Friday’s disclosure by the U.S. Environmental Protection Agency that Europe’s biggest auto maker employed software on some VW and Audi diesel-powered cars to manipulate the results of routine emissions tests.

The crisis threatens to spill beyond the auto maker to the broader German economy. Wolfsburg-based Volkswagen is as much institution as corporation at home, with nearly 300,000 employees, 29 plants across the country and deep ties to the government—Lower Saxony owns 20% of VW.

The company’s next CEO faces a daunting task of cleaning up the scandal—the scope of which remains unclear—and keeping its sales expansion on track. Volkswagen hasn’t yet said it knows who was responsible or how many employees were involved.

On Tuesday, Volkswagen disclosed that as many as 11 million cars contained software alleged to have duped emissions tests and were possibly subject to a global recall. The company issued a profit warning and disclosed a €6.5 billion ($7.27 billion) charge to earnings to cover the costs of addressing the matter.

In a statement following Wednesday’s meeting of the company’s top shareholders and labor representatives, Mr. Winterkorn said he would “accept responsibility” for the “irregularities that have been found in diesel engines” and tendered his resignation to the supervisory board.

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

The executive committee of the supervisory board thanked Mr. Winterkorn for his contributions to the company and said the CEO had “no knowledge of manipulation of the emissions data.”

The committee said it would seek prosecution of any Volkswagen employees involved in the affair, and it would establish a special investigative committee to uncover what had happened and who was responsible.

The board subcommittee said it would present by Friday’s scheduled supervisory board meeting names of candidates to succeed Mr. Winterkorn, but didn’t disclose any...

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