Alexander Koerner, Getty Images
Volkswagen CEO Martin Winterkorn in happier times, at the annual company shareholders' meeting in May. Winterkorn is at the center of an emissions scandal that could wind up with him knocked from the company.

VW CEO in Ejector Seat Over Cheating Scandal

Sept. 23, 2015
Will VW CEO Martin Winterkorn survive the week? His ouster appears imminent with every new wrinkle of the company's emissions scandal and industry analysts think change is, indeed, forthcoming.

FRANKFURT, Germany — Everything seemed fine for Martin Winterkorn last week when the Volkswagen CEO proudly showed off the auto giant’s latest models — including a range of eco-friendly ‘green’ cars — to German chancellor Angela Merkel at the IAA auto show in Frankfurt.

But just a few days later, VW’s fortunes and reputation seem to have been turned upside down as the former paragon of German engineering has found itself in the center of a pollution cheating storm of global dimensions. 

And the 68-year-old manager with a reputation for perfectionism, who earlier this year was described by senior supervisory board members as “the best possible chief executive for Volkswagen,” could find himself unceremoniously out on his ear by Friday. 

The year so far could not have seemed better for Winterkorn and VW. In March, the CEO was able to present record sales and earnings for last year (and the company still looks set to overtake Toyota this year as the world’s biggest automaker, years earlier than Winterkorn had planned). And Winterkorn himself had emerged strengthened from an ugly leadership feud with his former VW mentor, Ferdinand Piech, the group’s patriarch and grandson of the inventor of the iconic Beetle.

But on Friday, the news broke that VW had installed devices in nearly half a million diesel cars in the US that can cheat pollution tests. Three days later, the carmaker was forced to confess that 11 million vehicles worldwide could be affected. 

Winterkorn has been in the driver’s seat of the sprawling global car empire, whose brands range from SEAT in Spain and Skoda in the Czech Republic, to luxury sportscar maker Porsche, Lamborghini in Italy and Bentley in Britain, since 2007.

‘I Know Every Screw’

A fastidious perfectionist with the nickname “Mr Quality,” he could reportedly drive his engineers mad by inspecting each model closely before its launch.

“I know every screw in our cars,” he once boasted jokingly in an interview. 

But that assertion could soon fly back in his face as the authorities search for those responsible for the fraud. 

In a video statement on Tuesday, the gray-haired bespectacled manager offered his “deepest apologies” and said the manipulation had no place in a company such as Volkswagen.

“I don’t have all the answers,” he admitted, but gave no hint of stepping down.

Born on May 24, 1947, near Stuttgart, Winterkorn studied metallurgy and metal physics in his home town before becoming a research assistant at car parts supplier Bosch. He then switched to the quality assurance department of Volkswagen’s luxury marque Audi in 1981. 

In 1993, he was appointed head of quality assurance at the parent company Volkswagen and then director of technical development of the VW brand in 1996. Between 2000 and 2002, he served as member of the VW group board of management for technical development before returning to Audi in 2003 as CEO.

Under the wings of Ferdinand Piech, Winterkorn swiftly rose to become CEO of the entire Volkswagen group in 2007, and drove the group from strength to strength, clocking up a record profit of 11 billion euros and sales of 202 billion euros in 2014. 

Germany's Highest-Paid CEO, For Now

Nevertheless, Winterkorn, the highest paid executive in Germany with a salary of 15 million euros, also has a few Achilles’ heels. 

VW is over-dependent on the Chinese market, which has seen growth slow sharply during recent months, and the company has failed to make any substantial inroads into the U.S. market, where it competes with Ford, General Motors and Fiat Chrysler.

Those weak points are believed to have been the reason for the falling out with Piech, which erupted in April and eventually led to Piech’s resignation after the rest of the supervisory board rallied behind Winterkorn. 

Until just last week, before the scandal broke, it had been seen as a done deal that the supervisory board would agree to extend Winterkorn’s contract until the end of 2018 at a meeting on Friday.

But as the scandal has sparked a U.S. criminal investigation and worldwide legal action with unfathomable financial consequences for the auto giant, industry experts say it’s almost inevitable that Winterkorn will go. 

By Simon Morgan

Copyright Agence France-Presse, 2015

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