Volkswagen boss says emissions inquiry needs more time

Poetsch addresses conference ahead of deadline for internal investigation findings

Hans Dieter Poetsch, new  chairman of the German carmaker Volkswagen. Photograph: Julian Stratenschulte/AFP/Getty Images

Hans Dieter Poetsch, new chairman of the German carmaker Volkswagen. Photograph: Julian Stratenschulte/AFP/Getty Images

 

Volkswagen said on Wednesday that it would take time to get to the bottom of its rigging of diesel emissions tests, hours before the carmaker is due to give updates on its findings to German regulators and US lawmakers.

More than two weeks after it admitted to cheating US emissions tests, Europe’s largest carmaker is under pressure to identify those responsible, to say how vehicles with illegal software will be fixed and whether it also cheated in Europe.

“Nobody is served by speculation or vague, preliminary progress reports,” Hans Dieter Poetsch told a news conference, after being confirmed as the German company’s new chairman.

“Therefore it will take some time until we have factual and reliable results and can provide you with comprehensive information,” he said, before declining to take any questions.

Volkswagen is due to submit a plan to Germany’s KBA watchdog to spell out how it will make its diesel vehicles comply with emissions laws.

The German transport ministry said it had been assured by the company that the deadline would be met.

On Thursday, Volkswagen’s top US executive will testify before a US congressional oversight panel.

Both events come as investigations and lawsuits against the company continue to pile up.

According to a letter released on Wednesday, top senators on the US Senate Finance Committee are investigating Volkswagen’s actions related to federal tax credits designed to reward consumers for buying environmentally-friendly vehicles.

Stephan Weil, the prime minister of the German region of Lower Saxony, which is Volkswagen’s second-biggest stakeholder, denied suggestions the company was responding too slowly.

“The investigation is indeed running at high speed. We are not doing this by German rules, we are doing this by American rules,” he said, noting that US law firm Jones Day was leading an external investigation into the test rigging too.

Merkel response

German chancellor Angela Merkel also told the European Parliament that she believed Volkswagen was doing its best to address its problems, and urged a Green Party politician not to use them to condemn the entire car industry.

“[That] puts thousands and thousands of European jobs at risk,” she said.

Mr Poetsch addressed reporters after the carmaker’s 20-person supervisory board met at its headquarters in Wolfsburg to discuss the progress of its internal investigation into the biggest business crisis in the company’s 78-year history.

The scandal has wiped more than a third off its share price, forced out its long-time chief executive, led its new CEO to predict “massive cutbacks”, and sent shockwaves through both the global car industry and the German establishment.

One source close to the matter said there was a “certain degree of fright” among management ahead of US chief Michael Horn’s appearance before the congressional panel.

However, the source said it was too early to name those responsible for installing software in some diesel engines in order to manipulate emissions tests.

Mr Poetsch (64) promised that Jones Day was “leaving no stone unturned” in its investigations.

Refits

Volkswagen has said it may have to refit up to 11 million cars and vans worldwide as a result of the scandal.

New CEO Matthias Mueller said in a newspaper interview that recalls would start in January and would be completed by the end of 2016.

However, owners are anxious to know whether the refits will affect the fuel-economy and performance of their vehicles.

Volkswagen has said the illegal software was not activated on the bulk of the 11 million vehicles, most of which are in Europe, leaving uncertainty over whether it rigged tests there.

Equinet analysts said the cost of refits could range from less than €100 per vehicle to as much as €10,000, depending on whether the software can be upgraded or new hardware is needed.

UBS analysts estimated the total bill for the scandal, including potential fines and lawsuits, could be about €35 billion, though they added that this factored in Volkswagen’s share price after its recent plunge.

Germany’s transport ministry has said Volkswagen did manipulate European tests, but has not given details, making it unclear whether the company faces the same level of fines and lawsuits in Europe as in the US.

In his newspaper interview, Mr Mueller rejected the suggestion that Volkswagen was too late in informing financial markets about the test rigging, despite having told officials at the US Environmental Protection Agency weeks before it went public.

He also said he believed that only a few employees were involved in the manipulations.

US investigation

US lawmakers are bound to press for detailed information on the emissions cheating.

“We have a lot of questions. We have very few answers,” said Diana DeGette of Colorado, the top Democrat for the subcommittee.

Some analysts and investors remain worried company veterans such as Mueller and Poetsch will not introduce the sweeping changes in business practices they think are necessary to restore the company’s reputation.

They are also concerned about the complexity of Volkswagen’s investigations.

Reuters