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He was only in his job for about 5 months, but I'm not familiar with his previous work history at VW. Was he in some significant sense responsible for the scand

He was only in his job for about 5 months, but I'm not familiar with his previous work history at VW. Was he in some significant sense responsible for the scandal by way of his prior responsibilities? Or is his resignation, for lack of a better way I can think of to put it, an honor move? Edit: Thanks for the clarifications, all. Although he assumed Ferdinand Piëch's former position as chairman in April 2015, he was VW's CEO since 2007.

pc86 11y ago
He has said publicly that he is not aware of any wrong-doing on his part. I imagine that just about any board would require just about any CEO to resign after something like this, though.
- Scramblejams 11y ago
  When it comes to a relatively new CEO, I'm not so sure about that. GM didn't require Mary Barra's resignation over the ignition switch scandal, for example. (Though admittedly that one was smaller than VW's.) Edit: Winterkorn took over as chairman of the supervisory board of VW in April, but as petewailes pointed out, he's been CEO since 2007, so his resignation makes more sense.
  - JoeAltmaier 11y ago
    Is it the difference between deliberate/undefendable and simple cost savings? I'm not very familiar with the switch issue.
  - mzs 11y ago
    The cost between GM and VW here is two orders of magnitude, the stock did not drop by a third, and the EPA and CARB were not involved.
- duaneb 11y ago
  I would imagine at the level of management complexity, liability, and brand awareness of VW, which details get reported to whom becomes very important. He may have been technically unaware of cheating, for instance, but may have been aware of a "test optimizer". This is about taking a fall. It's up to the courts (I assume, American, not German) to establish how much he is actually at fault. But the idea that they sold 11M vehicles with hardware cheating the emissions test makes his claim fairly absurd. That kind of decision has got to be made at a high level, even if it's just choosing different budgets without looking closely.
  - msandford 11y ago
    > But the idea that they sold 11M vehicles with hardware cheating the emissions test makes his claim fairly absurd. So a CEO must know every detail about every component of every subsystem of every system in every trim level of every car of every brand that the company sells? If that's really true, we're headed back to the early industrial revolution. Nothing can have more than a few dozen or perhaps hundred parts, and integration of say electronics and mechanical things will be rare, as it'll be the rare CEO who knows enough about both to meet your standard.
    - wpietri 11y ago
      No. But broadly, a CEO is responsible for everything that happens on their watch. And they are specifically responsible for designing their organizations in such a way that the organization behaves responsibly. Ignorance cannot be an excuse for bad management. If we allow that, then executives can set things up so that they always appear ignorant. E.g., imagine a CEO says, "I don't care how you dispose of that toxic waste, just make sure that it's cheap. And of course it has to be safe [wink, wink]. Just don't bother me with details [wink, wink]." Any employee will know the real message.
      - nmrm2 11y ago
        Right, like the "GM nod". The principle that CEOs are responsible for what happens on their watch is major reason cited for their levels of compensation. You don't get it both ways.
        msandford 11y ago
        I completely agree! It doesn't matter if this particular CEO knew about this particular detail, because ultimately they're responsible for the culture, the work environment, etc. If they made a bad work environment at the top, and that trickled down to someone deciding to go the cheat route rather than the honest route, that's a problem. If the CEO did things right and made a good work environment but hired a bad exec, and they applied pressure to people to cheat, and this all got done, again, can be traced back to the CEO. If the CEO did the right thing and hired a seemingly great exec and that exec hired a bad manager, well, perhaps the CEO didn't do such an exceptional job. Ultimately all organizational failures like this are failures of management, and the CEO is the top manager so it's all on him (or her) when things go sideways. But just because it's all on them doesn't mean that we can all safely conclude that they definitely had firsthand personal knowledge of the problem and gave their approval, explicit, implicit or otherwise.
petewailes 11y ago
He's been CEO of Volkswagen since '07 IIRC, so whilst he's unlikely responsible, he's in an untenable situation.
- Scramblejams 11y ago
  Ah, thanks, that clears it up. I didn't realize he'd been CEO for that long, I only knew that he took over for Ferdinand Piëch in April of this year.
  - petewailes 11y ago
    No worries!
flixic 11y ago
When stock is down 35%, I'm sure stakeholders want to do something to reverse the direction. This is a highly visible change.
- HeyLaughingBoy 11y ago
  So, how many on HN are going to admit to buying up VW stock right now?
  - mrgordon 11y ago
    May it go to zero. If the penalties get high enough, I could see bankruptcy wiping out shareholders.
    - flyinglizard 11y ago
      German government is never-ever going to let this happen. Lower Saxony (IIRC) is a considerable shareholder in VW AG.
  - mirceal 11y ago
    buying VW stock makes perfect sense. you look at what the value of the company is and when you see a large disconnect between the value and the stock price you buy.
korisnik 11y ago
>He was only in his job for about 5 months He has been CEO since 2007, before any of the VW models with defeat devices were introduced. Some of the German analysts and experts who are knowledgeable about the industry itself have said that there is not even the slightest chance that he didn't know this. There's an interesting talk in German here: https://www.youtube.com/watch?v=gKILi7PN37A https://www.youtube.com/watch?v=gKILi7PN37A
maxxxxx 11y ago
He gets credit for everything good that comes out of VW even without his knowledge. So he should also take the blame for everything bad that happens.
- JoeAltmaier 11y ago
  Agreed. Its the job - being responsible. Nothing unexpected here.
mzs 11y ago
The background in broad brush strokes is that a number of wealthy families are fighting (two of them immensely powerful in particular) as well as a union and state. This is what you see publicly of this private battle now.

pc86 11y ago

He has said publicly that he is not aware of any wrong-doing on his part. I imagine that just about any board would require just about any CEO to resign after something like this, though.

Scramblejams 11y ago
When it comes to a relatively new CEO, I'm not so sure about that. GM didn't require Mary Barra's resignation over the ignition switch scandal, for example. (Though admittedly that one was smaller than VW's.) Edit: Winterkorn took over as chairman of the supervisory board of VW in April, but as petewailes pointed out, he's been CEO since 2007, so his resignation makes more sense.
- JoeAltmaier 11y ago
  Is it the difference between deliberate/undefendable and simple cost savings? I'm not very familiar with the switch issue.
- mzs 11y ago
  The cost between GM and VW here is two orders of magnitude, the stock did not drop by a third, and the EPA and CARB were not involved.
duaneb 11y ago
I would imagine at the level of management complexity, liability, and brand awareness of VW, which details get reported to whom becomes very important. He may have been technically unaware of cheating, for instance, but may have been aware of a "test optimizer". This is about taking a fall. It's up to the courts (I assume, American, not German) to establish how much he is actually at fault. But the idea that they sold 11M vehicles with hardware cheating the emissions test makes his claim fairly absurd. That kind of decision has got to be made at a high level, even if it's just choosing different budgets without looking closely.
- msandford 11y ago
  > But the idea that they sold 11M vehicles with hardware cheating the emissions test makes his claim fairly absurd. So a CEO must know every detail about every component of every subsystem of every system in every trim level of every car of every brand that the company sells? If that's really true, we're headed back to the early industrial revolution. Nothing can have more than a few dozen or perhaps hundred parts, and integration of say electronics and mechanical things will be rare, as it'll be the rare CEO who knows enough about both to meet your standard.
  - wpietri 11y ago
    No. But broadly, a CEO is responsible for everything that happens on their watch. And they are specifically responsible for designing their organizations in such a way that the organization behaves responsibly. Ignorance cannot be an excuse for bad management. If we allow that, then executives can set things up so that they always appear ignorant. E.g., imagine a CEO says, "I don't care how you dispose of that toxic waste, just make sure that it's cheap. And of course it has to be safe [wink, wink]. Just don't bother me with details [wink, wink]." Any employee will know the real message.
    - nmrm2 11y ago
      Right, like the "GM nod". The principle that CEOs are responsible for what happens on their watch is major reason cited for their levels of compensation. You don't get it both ways.
      - msandford 11y ago
        I completely agree! It doesn't matter if this particular CEO knew about this particular detail, because ultimately they're responsible for the culture, the work environment, etc. If they made a bad work environment at the top, and that trickled down to someone deciding to go the cheat route rather than the honest route, that's a problem. If the CEO did things right and made a good work environment but hired a bad exec, and they applied pressure to people to cheat, and this all got done, again, can be traced back to the CEO. If the CEO did the right thing and hired a seemingly great exec and that exec hired a bad manager, well, perhaps the CEO didn't do such an exceptional job. Ultimately all organizational failures like this are failures of management, and the CEO is the top manager so it's all on him (or her) when things go sideways. But just because it's all on them doesn't mean that we can all safely conclude that they definitely had firsthand personal knowledge of the problem and gave their approval, explicit, implicit or otherwise.

petewailes 11y ago

He's been CEO of Volkswagen since '07 IIRC, so whilst he's unlikely responsible, he's in an untenable situation.

Scramblejams 11y ago
Ah, thanks, that clears it up. I didn't realize he'd been CEO for that long, I only knew that he took over for Ferdinand Piëch in April of this year.
- petewailes 11y ago
  No worries!

flixic 11y ago

When stock is down 35%, I'm sure stakeholders want to do something to reverse the direction. This is a highly visible change.

HeyLaughingBoy 11y ago
So, how many on HN are going to admit to buying up VW stock right now?
- mrgordon 11y ago
  May it go to zero. If the penalties get high enough, I could see bankruptcy wiping out shareholders.
  - flyinglizard 11y ago
    German government is never-ever going to let this happen. Lower Saxony (IIRC) is a considerable shareholder in VW AG.
- mirceal 11y ago
  buying VW stock makes perfect sense. you look at what the value of the company is and when you see a large disconnect between the value and the stock price you buy.

korisnik 11y ago

>He was only in his job for about 5 months He has been CEO since 2007, before any of the VW models with defeat devices were introduced. Some of the German analysts and experts who are knowledgeable about the industry itself have said that there is not even the slightest chance that he didn't know this. There's an interesting talk in German here: https://www.youtube.com/watch?v=gKILi7PN37A https://www.youtube.com/watch?v=gKILi7PN37A

maxxxxx 11y ago

He gets credit for everything good that comes out of VW even without his knowledge. So he should also take the blame for everything bad that happens.

JoeAltmaier 11y ago
Agreed. Its the job - being responsible. Nothing unexpected here.

mzs 11y ago

The background in broad brush strokes is that a number of wealthy families are fighting (two of them immensely powerful in particular) as well as a union and state. This is what you see publicly of this private battle now.