Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

VW Exec Offers to Quit Amid Criminal Inquiry

BERLIN -- Volkswagen's personnel chief Peter Hartz offered to quit amid a criminal investigation of two former human resources employees, saying he wanted to preserve the carmaker's reputation.

"It is self-evident that I now must take responsibility for the events that have happened in my area of supervision and suffer the consequences," Hartz said in a statement on Friday. "I have offered my resignation to the supervisory board to prevent further damage to the company."

The supervisory board of Volkswagen, Europe's biggest carmaker, must still formally accept the proposed resignation, the company said in a separate statement. There is no timeframe for a decision, said Hans-Georg Kusznir, a Volkswagen spokesman.

Hartz was the boss of Helmuth Schuster, the head of personnel at Volkswagen's Skoda Auto division until June 15, and Klaus-Joachim Gebauer, a former Volkswagen human resources employee. Schuster and Gebauer are under investigation by prosecutors on "suspicion of breach of trust and possible fraud" for possibly setting up dummy companies to win business from the carmaker.

"Hartz's departure would certainly not be negative," said Lars Ziehn, an analyst at WestLB in D?sseldorf, Germany, who has a "neutral" rating on Volkswagen stock. "It could give the current management board more power to make critical decisions."

Volkswagen stock is up 16 percent this year, valuing the carmaker at 15.6 billion euros ($18.6 billion).

Hartz led a government panel that in 2002 recommended labor-policy changes for German Chancellor Gerhard Schr?der to spur economic growth and reduce unemployment by half by 2005. Germany's unemployment rate has instead increased, from 9.8 percent in June 2002 to 11.7 percent last month.

"We respect the offer of Dr. Hartz to take the political responsibility for the turn of events and to step down from his position as personnel director," CEO Bernd Pischetsrieder said in a separate statement on Friday. "He did this with the purpose of preventing damage to the company."

Hartz said he supports a decision by Volkswagen's management board to investigate the carmaker's proposed subsidiary in India, an import company in Angola and a company called F-BEL that applied for a contract with Skoda in Prague. German media reports have linked all three organizations to the probe. The carmaker filed a complaint with prosecutors on June 28.

Hartz's offer to step down comes a week after Klaus Volkert, Volkswagen's works council head, resigned his position. A Der Spiegel magazine article last week linked Volkert to the investigation. He said he had done nothing criminally wrong.

Christian Wulff, the prime minister of the German state of Lower Saxony and a Volkswagen supervisory board member, said he welcomed Hartz's offer to resign. Lower Saxony owns 18 percent of Volkswagen.

Hartz helped negotiate an agreement at Volkswagen in November that guaranteed the jobs of 103,000 German workers in return for a wage freeze and cost cuts worth 2 billion euros ($2.39 billion) a year by 2011.