VW Diesel Scandal in U.S. Could Threaten Winterkorn’s Job

A rapidly growing scandal over secret software used to cheat U.S. emission tests for diesel engines could jeopardize CEO Martin Winterkorn's career, according to Bloomberg News.

Analysts tell Bloomberg the crisis is "profoundly serious" for both VW's image in America and Winterkorn's future. About 25% of VW vehicles sold in the American market are diesel powered, a higher proportion than virtually every other carmaker.

But VW has admitted the 2.0-liter diesels it sells in the U.S. have been equipped with software that disables certain emission control setting when the vehicle is not undergoing federal emission tests. The system allows the car to emit as much as 40 times the allowable level of smog-forming nitrogen oxide, according to Environmental Protection Agency.

The EPA has refused to certify the engine for the 2016 model year, thus blocking sales of those vehicles. VW reportedly has halted sales of remaining 2015 diesel models. The company faces sanctions that could include criminal charges, a possible federal fine for as much as $18 billion (€16.1 billion) and a flood of state-level lawsuits claiming the company misled consumers.

Winterkorn says the company will "do everything necessary" to fix the problem, including ordering an independent investigation. But critics note that responsibility for the fiasco ultimately lies with Winterkorn as the company's top product development chief.

VW's board is scheduled to meet on Friday to extend Winterkorn's contract as CEO through 2018. His current contract expires at the end of next year.