Michael Horn is stepping down as chief executive of Volkswagen America, which is mired in a far-reaching scandal over cheating on emissions in diesel-powered vehicles, the company announced Wednesday, according to dpa. By mutual understanding, Horn's departure would take effect immediately, a company statement said. Hinrich Woebcken, recently named VW's head of the North American region, will take Horn's place. Horn, 54, assumed the top Volkswagen job in the United States in January 2014. His departure was announced after the troubled German carmaker's shares fell sharply early Wednesday, following media reports that US authorities are widening their investigation into the emissions scandal that has rocked the automotive group. VW's stock opened more than 3-per-cent down on the Frankfurt Stock Exchange after The Wall Street Journal reported that the US Justice Department is expanding its probe of the carmaker through the use of bank fraud and tax laws. The move by US authorities raises the risk of VW being hit by new penalties. US authorities were planning to use a far-reaching law against bank fraud in their investigation into the emissions affair, as well as looking at possible tax violations, the Journal said, citing sources familiar with the probe. A Justice Department spokesman declined to comment on the report. A VW spokeswoman only said that the company will continue to cooperate with all relevant US authorities. VW already faces more than 500 lawsuit from US car owners. Europe's biggest carmaker admitted in September that it had installed software aimed at cheating emissions tests in about 11 million of its diesel models around the world. An offshoot of Europe's biggest insurance group Allianz is also considering joining legal action in Germany against VW because of the diesel scandal. A spokesman for Allianz's wealth manager, Allianz Global Investors (AGI), said Wednesday the group was examining whether its "investors have been damaged [by the scandal] and whether we then need to take the corresponding steps." AGI holds a 0.06-per-cent stake in VW. German prosecutors said Tuesday they were expanding the number of suspects in their probe from six to 17. However, they said this did not include former or current board members. Prosecutors in France announced this week that they planned to launch a serious fraud investigation into the carmaker. About 950,000 VW cars in French are affected by the scandal. VW's top union representative, Bernd Osterloh, warned Tuesday of the possible drastic consequences of the scandal. "If Volkswagen's sustainability is endangered by a penalty of a so-far unique size, this will also have dramatic social consequences - not just at our US locations, but also in Europe and elsewhere," Osterloh told a meeting of VW workers. "We very much hope that the US authorities also ultimately have this social and employment dimension as part of their consideration," he told the meeting at the carmaker's headquarters in the northern German city of Wolfsburg.
