End of the Road for Volkswagen's Michael Horn

In a surprise announcement yesterday, Volkswagen of America CEO and President Michael Horn stepped down.

The move is effective immediately and according to a statement released by Volkswagen, the move was reached through a 'mutual agreement'. Hinrich J. Woebcken - recently picked by Volkswagen to lead their North American Operations - will act as interim CEO and President.

"I want personally to say 'thank you' to Michael Horn for the great work he has done for the brand and with the dealers in the United States. During his time in the U.S., Michael Horn built up a strong relationship with our national dealer body and showed exemplary leadership during difficult times for the brand," said Herbert Diess, CEO of Volkswagen brand.

Horn has been with Volkswagen since 1990 and was named Volkswagen of America CEO and President in 2014.

What are the ramifications of Horn's departure?

The biggest one is the loss of an ally for Volkswagen's dealers in the U.S. Horn was respected by dealers as he was honest about Volkswagen's situation in the U.S. and worked to improve sales. Horn was also a key part of deploying a number of programs for dealers such as a buyback program of used TDI vehicles.

“The [VW] National Dealer Advisory Council wants to acknowledge Michael for his leadership and strength through the continued mismanagement of the diesel scandal that has plagued our sales and reputation more than any other global market,” the council said in a statement to Automotive News.

"There is no sense of a resolution to the diesel scandal. We are troubled watching the mismanagement of this scandal from Germany, and how it may impact the ultimate decisions by the authorities in the United States. This change in management can only serve to put the company at more risk, not less.”