Morning Briefing What Did Winterkorn Know?

VW's ex-CEO Martin Winterkorn says he still can't answer when he learned of the emissions-rigging: Deutsche Bank axes executive bonuses.

Former VW Chief Executive Martin Winterkorn testified today before a special Bundestag parliamentary committee investigating the biggest crisis to ever hit German industry. He spoke in public for the first time since resigning in September 2015. “As CEO, I bear responsibility for what has happened,” he said of the Dieselgate scandal that has cost the automaker $24 billion in lawsuits and penalties so far. When asked exactly when he learned of the emissions-rigging, Winterkorn said he “cannot answer,” citing the need to wait for an investigation by German prosecutors to finish. Continuing to claim he didn’t know about the manipulation is hardly an option for the former company patriarch.  Ignorance and Winterkorn don’t rhyme.

Deutsche Bank employees are on a roller-coaster ride of their lives this week. First, U.S.  Attorney General Loretta Lynch slapped the bank with a $7 billion fine over its handling of mortgage-backed securities. Then 24 hours later, CEO John Cryan slashed senior executive bonuses in half. But as long as a bottle of premium red wine at Deutsche Bank’s local watering hole, “The Ivory Club,” still costs €5,100 and keeps finding thirsty buyers, we can spare the sympathy.

The Alpine town of Davos is trembling under clashing views of political and business leaders meeting at the World Economic Forum. International Monetary Fund chief Christine Lagarde is among those blaming growing social inequality for the rise of populism worldwide. But U.S. economist Larry Summers and others view such talk as nonsense, saying what voters long for is national strength. Such dissent in the ranks of the world’s leading decision-makers is new. So much for “the elite” speaking in one voice.

Chancellor Angela Merkel’s Christian Democratic Union and her Bavarian sister party, the Christian Social Union, will only approve billions more in aid for Greece if the International Monetary Fund contributes to the cause. But they may be asking too much. According to information obtained by Handelsblatt, the IMF is refusing to feed fresh dollars into the Greek money incinerator. But a bankrupt Greece is certain to roil German taxpayers and Merkel doesn’t need any more of that ahead of the federal elections. If she could, she’d ban the Greek political time bomb from her party’s agenda – or at least park it in a transit zone with another hot issue.

Some 4,500 managers with German railway Deutsche Bahn will need to learn a new way to climb the career ladder. “We’re changing the rules,” board member Ulrich Weber told Handelsblatt. The goal is to have the team share responsibility for the whole operation. The railway has scratched individual goals from the bonus catalog and introduced a new rotation system for management to prevent compartmentalized thinking. “No one should stay in the same position longer than seven years,” Weber said. If that’s the case, Rüdiger Grube, CEO since May 2009, could be the first practitioner of the new rotation policy. In the end, implementing the reform may derail the railway.

U.S. investment bank Goldman Sachs plans a huge reorganization of its European operations as a result of Brexit. The bank, Handelsblatt has learned, wants to halve its London workforce to 3,000 employees and move 1,000 jobs to Frankfurt and hundreds more to Warsaw and other Eastern European cities. The shift will certainly reduce the bank’s opulent expense budget. The specialty in Warsaw is stew – that’s a bargain compared to London’s dry-aged porterhouse steak from young bulls grain-fed in Nebraska.

Image of the Day

Demonstrators dressed as bees staged a “die-in” in protest against the takeover of U.S. seed and pesticide company Monsanto by German chemicals giant Bayer at Bayer’s headquarters in Berlin yesterday. John MacDougall/Getty Images