As VW prepares for diesel emissions recall, CEO says cost cutting and efficiency drive won’t be painless

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2015 Volkswagen Golf TDI SE

2015 Volkswagen Golf TDI SE

The Volkswagen Group is expected to start recalling its diesel cars fitted with the ‘defeat device’ software designed to fool emissions testers most likely by January, 2016. Around 11 million vehicles are thought to be part of the recall, most of them in Europe, and the brands affected include not only Volkswagen but also Audi, SEAT and Skoda.

“If everything goes as planned, we can start the recall in January,” VW’s new CEO Matthias Müller told Germany’s Frankfurter Allgemeine Zeitung. “All the cars should be in order by the end of 2016.”

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VW has presented Germany’s Federal Motor Transport Authority with its plans and timetable on fixing the affected vehicles. However, it’s not simply a matter of writing up some new software. This is because there were country-specific versions of the cheating software. In addition, some vehicles will require mechanical updates such as new fuel injection equipment and catalytic converters.

VW has set aside more than $7.3 billion to prepare for some of the costs involved in the recall as well as potential penalties and possibly even lawsuits. However, the automaker concedes that it isn’t possible yet to quantify the commercial and financial implications at present. Thus, VW is cutting back on some of its more frivolous spending and is currently conducting a review of its planned investments.

Matthias Müller

Matthias Müller

In a statement, VW’s CEO said anything that isn’t absolutely necessary will be cancelled or postponed. Müller said that every model and every brand would come under review, with the Bugatti brand being mentioned in his interview with Frankfurter Allgemeine Zeitung. The oft-delayed next-generation Phaeton looks to be safe, though, with Müller explaining that a VW-badged car positioned higher than the Passat was important for growth in Asia. Müller also warned that the cost cutting and efficiency drive won’t be a painless process.   

Back here in the United States, VW’s local CEO Michael Horn has testified in front of the House Energy and Commerce committee, admitting that the issue of the cheating software had come up in the spring of 2014 though at the time was only considered to be a possible emissions non-compliance with the EPA. He said later in 2014 he was informed that the technical teams had a specific plan for remedies to bring the vehicles into compliance and that they were engaged with the agencies about the process.

He said VW is conducting investigations on a world-wide scale into how it came to be that the cars were fitted with the cheating software and why the issue wasn’t addressed. He said responsible parties would be identified and held accountable. Finally, he confirmed that VW had withdrawn its application for EPA certification for 2016 models with the affected diesel engines, until the units comply with all emissions standards. That means the current stop-sale order will continue.

For more on the many moving parts of this developing story, head to our dedicated VW hub. VW also has a special website (vwdieselinfo.com) providing information for concerned owners.

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