Volkswagen to fire executives, appoint CEO

Volkswagen Group will fire three top executives and choose the head of its sports car brand Porsche to lead VW operations, a senior source in the company said on Thursday, as the German automaker tries to recover from a scandal over its rigging of U.S. vehicle emissions tests.

One day after VW chief executive Martin Winterkorn resigned, the source said the head of the company's U.S. operations and top engineers at premium VW brands Audi and Porsche would be dismissed on Friday, regardless of whether they knew about the cheating.

But the worst scandal in the company's 78-year history showed no sign of abating as Germany's transport minister said on Thursday it had manipulated tests in Europe as well as the United States.

VW is under pressure to act decisively, with its shares plunging since the crisis broke and German Chancellor Angela Merkel urging it to quickly restore confidence in a company held up for generations as a paragon of German engineering prowess.

Winterkorn stepped down on Wednesday, saying Volkswagen needed a fresh start. The company now looks set to fire executives across its multi-brand group to weed out the source of the manipulations.

"There will be further personnel consequences in the next days and we are calling for those consequences," Volkswagen board member Olaf Lies told the Bavarian broadcasting network.

The research and development chiefs of Audi and Porsche, Ulrich Hackenberg and Wolfgang Hatz, will be removed by the supervisory board, as will VW's top executive in the United States, Michael Horn, the senior source said.

Hackenberg and Hatz had both held senior posts at VW in development, including of engines, before they switched to Audi and Porsche. They are among VW's highest-ranking engineers.

Horn acknowledged this week that the company had "totally screwed up" by deceiving U.S. regulators about how much its diesel cars pollute.

The supervisory board is also due to announce a successor as chief executive — likely to be Porsche CEO Matthias Mueller, according to the source.

VW said on Tuesday about 11 million of its cars worldwide were fitted with the software that was found to be cheating emissions in the United States. The U.S. Environmental Protection Agency has said Volkswagen could face penalties of up to $18 billion.

In a potential setback to the company's attempts to move on, German Transport Minister Alexander Dobrindt suggested tests had also been rigged in Europe.

"We have been informed that also in Europe, vehicles with 1.6 and 2.0 liter diesel engines are affected by the manipulations that are being talked about," he told reporters, though he did not say how many vehicles were affected.

France said Thursday that it would carry out testing to establish whether vehicles on its roads are equipped with the banned software involved in the scandal.  

"Random tests will take place to establish cars are not equipped with fraudulent software," Minister of Ecology, Sustainable Development and Energy Marie-Segolene Royal told BFM TV after a meeting with representatives of French carmakers Renault and PSA Peugeot Citroen.

Royal said the tests would involve a random sample of about 100 cars. 

Reuters