The Cable

Volkswagen’s American Chief Michael Horn Falls on His Sword

Michael Horn, head of Volkswagen America, is suddenly out of a job.

GettyImages-497762980

It was perhaps inevitable that Michael Horn, president and chief executive of Volkswagen Group of America, would lose his job over an emissions cheat on nearly 600,000 diesel cars in the United States. But his unexpected departure late Wednesday evening shows there’s a split over how VW’s American arm has handled the scandal, and how the mother ship in Germany is trying shape the public perception of crises that could cost the company up to $46 billion in U.S. fines.

Horn’s managers in Germany have tried to pin blame for the software that allowed cars to be U.S. emissions tests on a few rogue engineers. Horn, however, said that company line was hard to swallow when he spoke in front of Congress in October.

Horn, who Volkswagen said left the company by “mutual agreement,” admitted the company “totally screwed upˮ after the Environmental Protection Agency caught the car maker red-handed. Under intense grilling from lawmakers in October, a conciliatory Horn admitted “it’s very hard to believe” that VW corporate did not know what their engineers were doing.

Volkswagen has since admitted installing software that allowed them to cheat American emissions tests for diesel vehicles for a simple reason: It wanted to sell more cars in the U.S. The company also later said the scandal is, in fact, a result of Volkswagen’s top-down corporate culture, not the work of charlatan engineers.

Settlement talks between the company and the United States are ongoing, with VW’s lawyer Robert Giuffra telling U.S. District Judge Charles Breyer last month that negotiations are “progressing.” But in recent days, Volkswagen has appeared combative, warning the United States it would lose jobs at VW’s lone U.S. assembly plant in Tennessee due to the billions of dollars in fines it faced.

The company has been bleeding money since the scandal broke six months ago. Last month, it reported sales fell 13.2 percent from a year ago. Sales of the Passat, made in Tennessee, were down more than 30 percent.

Reports in German media hinted these drops were due to Horn’s leadership, not the broader scandal.

“VW doesn’t have a real strategy for the U.S. market,” Ferdinand Dudenhöffer, a business professor at the University of Duisburg-Essen and an auto industry expert, told the German publication WirtschaftsWoche.

Photo Credit: David McNew/Getty Images

David Francis was a senior reporter for Foreign Policy, where he covered international finance. @davidcfrancis

Trending Now Sponsored Links by Taboola

By Taboola

More from Foreign Policy

By Taboola