VW hopes to reach agreement with US authorities

Volkswagen says only a small group of employees were responsible for cheating US diesel emissions tests

Photo by: AFP
Photo by: AFP

VW hopes to reach agreement with US authorities

Volkswagen said on Thursday that only a small group of employees were responsible for cheating US diesel emissions tests and there was no indication that board members were involved in the biggest business crisis in the firm's history.

Chairman Hans Dieter Poetsch said investigations into the affair were going well, but the scandal was the result of a "chain of errors" and it would take months to say which individuals were to blame.

The carmaker announced that it had agreed steps to improve oversight of engine-software development to avoid any future emissions test manipulations.

Volkswagen hoped to reach agreement with US environmental authorities in the next few days or weeks so the company can start to recall affected cars there. Cooperation with those authorities was described as "excellent."

Despite the scandal, orders so far this year were up by 3.5 percent and Chief Executive Matthias Mueller said he was confident that buyers would get over their reluctance to buy the group's vehicles in the coming weeks.

VW also said it was planning to bring in a new corporate structure that would be in place across the group by early 2017. The company was not considering the sale of any units to simplify the group structure or raise money, and was happy with having 12 brands.

But executives were still unable to estimate the scandal's legal costs, for which they had so far made no provisions.

Mueller, who has not been to the United States since becoming chief executive after the scandal broke, said he would start a visit to the country after the Detroit motor show in January.

Speaking at a news conference at VW's headquarters in Wolfsburg, Mueller said he would apologise for the situation, but added: "I don't think I will be going down on my knees there ... I will look ahead optimistically and confidently."

Europe's biggest carmaker launched internal and external investigations in September after admitting its deception in the United States.


"No business justifies crossing legal and ethical boundaries," Poetsch said. "Even though we cannot prevent misconduct by individuals once and for all, in future it will be very difficult to bypass our processes."

Poetsch said the external investigation by US law firm Jones Day was making good progress but would need time to reach conclusions.

He said Volkswagen would not name any individuals involved on Thursday but it was likely only a small number of people took part in the deception.

"We are talking here not about a one-off mistake but a chain of errors," he said, adding: "Based on what we know today, it was a very limited group which acted irresponsibly."

VW's engine-development unit remained the focus of investigations, Poetsch said.

Mueller said the crisis was an opportunity for VW to introduce long-needed structural change. Since the start of this year, the VW group's executive board has brought in six new members, and top management had been changed at seven of VW's 12 brands.

He said VW was working on a new structure to give more power to its regional divisions and brands. Details would be drawn up in the first quarter of next year and it would be in place across the group by early 2017.

"As serious as this crisis is, it is also offering us an opportunity to drive much-need structural change and we will use that opportunity," Mueller said.

Up to 11 million cars worldwide have software installed that defeats emissions tests, and the costs to Volkswagen of fixing the cars, paying fines to environmental authorities and dealing with legal challenges are estimated in the tens of billions of euros.

Mueller said it was relatively simple and inexpensive to fix the affected cars, and he was often asked why they had not done so in the first place. The reason was that the technology for the fixes was not available when the cars were built, and the problem was not known at the time.

"We will not allow the crisis to paralyse us," Mueller said. "Although the current situation is serious, this company will not be broken by it."

The scandal forced out VW's long-time chief executive and wiped 13 percent, or 10 billion euros ($11 billion), off its market value. Shares in Volkswagen were 1.5 percent down on Thursday afternoon.