Resignation of VW's Hartz is accepted over scandal

Resignation of VW's Hartz is accepted over scandal
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Peter Hartz, the top Volkswagen official at the centre of a bribery scandal, is a step closer to leaving the carmaker. The executive committee of VW’s supervisory board, meeting at the company’s headquarters at Wolfsburg, has recommended that his resignation should be accepted. He offered to quit to take political responsibility over the bribery allegations and other irregularities, though he personally denies any wrongdoing. After the meeting, VW board member Christian Wulff said: “We have unanimously agreed to ask Volkswagen to accept the resignation of Peter Hartz. I am working to ensure that everything that was not okay in the past will end and that those responsible are held accountable and will be made liable so that we can once again concentrate on our core business, the production and sale of cars. Today’s meeting is a first step in that direction.” Wulff said he had no doubt that the full board would accept Hartz’s resignation and the appointment of a successor could take weeks.

The scandal has focused attention on corporate Germany’s system of works councils, in which union leaders and company officials make decisions together. Critics says that encourages corruption. At Volkswagen there are so far unsubstantiated claims that union officials were bribed with holidays and prostitutes. The scandal comes at an already difficult time for Europe’s biggest motor manufacturer, which is due to turn out five million cars this year. Profits have steadily fallen for the last four years. Cost-cutting is underway to try to turn things around. The scandal has a political dimension as Hartz is a close ally of Germany’s Chancellor Gerhard Schroeder and was the architect of the government’s hugely unpopular labour and welfare reforms. The affair has tainted Hartz’s reputation and possibly Schroeder’s as well.
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