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September 23, 2015 11:30 AM, EDT

Volkswagen AG CEO Martin Winterkorn Resigns After Emissions Scandal

Michele Tantussi/Bloomberg News
Volkswagen AG CEO Martin Winterkorn, who during nearly a decade at the helm catapulted VW to the top spot in global sales, stepped down after admitting the automaker cheated on U.S. emissions tests.  

“Volkswagen needs a fresh start — also in terms of personnel,” Winterkorn said in a statement Sept. 23. “I am clearing the way for this fresh start with my resignation.”

The move capped a dramatic fall from grace that began Sept. 18 with the revelation that the Wolfsburg, Germany-based company fitted diesel-powered vehicles with software that circumvented air pollution controls, then lied about it to the U.S. Environmental Protection Agency. The 68-year-old CEO, who personally apologized for the scandal, was unable to hang on as the stock price plummeted 35% over two days and pressure grew from the German government for quick action.

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Winterkorn, who took over in 2007, led a turnaround that propelled VW from an also-ran that had cut 20,000 German jobs under his predecessor to a global powerhouse with about 600,000 employees that included a stable of 12 brands from Lamborghini supercars to Scania heavy trucks. He expanded aggressively, boosting the number of production sites around the world to more than 100 locations, with an emphasis on China and North America.

The new CEO’s top priority will be getting to the bottom of a scheme intended to dupe regulators and consumers about emissions of diesel engines installed in 11 million cars worldwide — more vehicles than VW sells in a year. The automaker set aside $7.3 billion on Sept. 22 to cover potential costs.