Frank Witter is about to inherit a huge mess. The CEO of Volkswagen AG’s financial-services arm is reportedly taking over as the company’s next finance chief.
Witter enters the role at a turbulent time for the automaker. Volkswagen has admitted to using “defeat devices” to fool emissions tests. More than 11 million VW automobiles around the world are suspected of using the emissions-rigging technology.
Witter is no stranger to Volkswagen’s business operations. He joined the company in 1992 and worked at VW until 2001. According to The Wall Street Journal, he left for a short period of time to serve as the treasurer of Zurich’s SAirGroup, and returned to Volkswagen’s American operations as CFO.
In 2005, Witter was named as the CEO of Volkswagen of America and then moved over to CFO of VW Credit Inc., before accepting the CEO role at Volkswagen Financial Services AG in 2008.
SeekingAlpha notes that in his new role he will be forced to immediately consider dividend cuts, dilution, and lower profit forecasts.
Witter will need to work closely with outgoing CFO Hans Dieter Pötsch to determine what liabilities will be covered by insurance and what liabilities will be the responsibility of Volkswagen. Pötsch is expected to be named as the company’s next chairman, a move that under current regulations would force him out of the CFO role.
Witter will also be forced to deal with other financial repercussions that may surface. For instance, French prosecutors have launched a preliminary investigation into possible fraud, andEU authorities are pushing for an EU-wide investigation after it was revealed that 1.2 million vehicles in the UK could be using the emissions defeat technology.
Balancing Volkswagen’s books isn’t going to be a quick job for Witter. Investigations could take months and even years to complete. As more countries launch their own investigations, he could find himself constantly battling new obstacles on a path to cleaning up the company’s financial mess.