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VW axes top US executive

Published:Sunday | March 13, 2016 | 12:00 AM
Contributed For many US dealers VW has lost its shine.
AP Volkswagen’s only test centre in North America in Oxnard, California.
AP Volkswagen of America CEO Michael Horn testifies on Capitol Hill in Washington, USA.

DETROIT, United States (AP):

Michael Horn, Volkswagen's (VW) top US executive, was ushered out of his job for clashing too often with the German headquarters as he tried to keep sales afloat before and during the company's diesel emissions-cheating scandal, a top dealer said.

Horn, the US president and CEO, was the automaker's public face when the scandal broke in September, calmly enduring a two-hour grilling from a congressional subcommittee.

The clashes included German executives resisting Horn's plan to give diesel owners US$1,000 worth of gift cards and vouchers to buy goods at dealerships as a gesture of goodwill, said Alan Brown, head of VW's National Dealer Advisory Council.

Horn's sudden departure comes as the company faces a March 24 deadline from a federal judge to get government approval of plans to fix the polluting diesel cars. It also drew anger from US dealers who fear that the company will back out of promises made under Horn.

VW is negotiating with US and California regulators to fix nearly 600,000 cars sold in the US with software designed to cheat on emissions tests. The cars emit as much as 40 times the allowable standard for nitrogen oxide, which can cause human respiratory problems. VW has admitted the cheating and to have to recall most of the cars for repairs.

Horn, who was upset that VW brought in an executive to be above him in North America, told VW employees that he had decided to leave, according to a former employee. The ex-employee, who communicates with former co-workers, didn't want to be identified for fear of retaliation. He also confirmed the clashes with management.

Horn also differed with superiors at VW's headquarters in Wolfsburg, Germany, about vehicles to be sold in the US and what prices to sell them. Horn wanted more SUVs and cars suited to the American market, but his superiors often disagreed,

The dealer council said in a statement that during his two years on the job, Horn was able to secure commitments of better products for the US and repair fractured relations with dealers "which had been eroded for decades by failed promises of success from Volkswagen AG".

In 2007 VW set a goal of selling 800,000 of the brand's vehicles in the US, with diesel engines a big part of that growth. But VW had trouble meeting tough US diesel pollution standards. The brand made it to 438,000 in 2012, but sales began to falter. Last year, they hit just over 349,000, and so far 'this year' they're down almost nine per cent.

VW spokeswoman Jeannine Ginivan wouldn't say if VW would meet the March 24 deadline to have a fix in place. VW has continued to meet with regulators, but neither side has given any indication that they are near agreement.

VW potentially faces more than US$20 billion in US fines, as well as hundreds of class-action lawsuits from angry vehicle owners. The company also is facing a US criminal investigation.