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VW CEO Alerted, Failed to React to Diesel Crisis

German maker thought impact of scandal would be marginal; Audi earnings now take hit.

by on Mar.03, 2016

Former VW CEO Martin Winterkorn shown at the maker's 2015 annual meeting.

Former Volkswagen CEO Martin Winterkorn was advised of the maker’s cheating on diesel emissions tests at least 16 months ahead of when the scandal became public, the automaker confirmed.

Separately, VW has issued an advisory to its shareholders revealing it did not expect the subterfuge to erupt into what is arguably the biggest crisis in its post-War history. The company said it anticipated a quick resolution with U.S. authorities and that the cost of resolving the issue would likely be “not especially high.”

The Journal of Record!

With more than 500 lawsuits facing it, including one filed by the U.S. Justice Department, the costs appear to be mounting – as became clear Thursday when VW’s luxury subsidiary Audi reported a sharp, 6.1% decline in 2015 earnings. Audi shares several of the diesel engines involved in the emissions scandal.

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VW Boss Says He’s Focused on Fix, Not Cost, of Diesel Scandal

“Most important task” is solving diesel problem in U.S. says brand CEO Diess.

by on Jan.06, 2016

VW Brand Boss Herbert Diess offers a mea culpa during a keynote speech at CES.

A day after his company was sued by the U.S. Department of Justice, Volkswagen brand boss Herbert Diess told an audience at the Consumer Electronics Show that “Our most important task in 2016 is to solve the diesel issue in the U.S.”

The federal suit follows revelations that the German maker had cheated on emissions tests involving both its 2.0 and 3.0-liter diesel engines, a problem that could result in more than $20 billion in fines. Government officials said they were frustrated by the slow process of finding a fix for the problem.

Keeping the Record Straight!

But Diess told reporters attending a preview of several battery-powered concept vehicles that “I assure you we are doing everything we can to make things right.” The executive added that he “is confident we will win their approval (for a fix) in the coming weeks and months.”

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Volkswagen Reverses Course, Acknowledges Additional Cheating

German maker confirms EPA charges involving 75,000 new VW, Audi and Porsche models.

by on Nov.20, 2015

VW now admits it cheated on Porsche and Audi vehicles using a 3.0-liter diesel engine.

After initially denying charges leveled by the U.S. Environmental Protection Agency, Volkswagen told regulators today that the company did, indeed, also cheat on emissions tests involving a second turbodiesel engine.

The concession covers an additional 75,000 vehicles using a 3.0-liter turbodiesel, on top of the 482,000 vehicles equipped with a 2.0-liter diesel called out by the EPA in mid-September for using a so-called “defeat device.” The latest problem involves products sold by both the VW and Audi brands and, for the first time, the Porsche marque, as well.

Breaking News!

In the case of the 2.0-liter diesels first cited by the EPA for cheating in September, VW used hidden software code capable of detecting when the vehicles were undergoing emissions tests. With the 3.0-liter system, the diesel engines were improperly fitted with what a spokesman called auxiliary emissions controls.

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VW, Audi Officials Apologize, Try to Look Beyond Diesel Scandal at LA Show

VW meeting with EPA; gift cards going out to 120,000 TDI owners.

by on Nov.19, 2015

VW CEO Michael Horn was surrounded by reporters after the maker's LA news conference. Photo courtesy Michael Rose.

Volkswagen will have a solution “soon” for owners of diesel models tainted by an emissions rigging scandal, the company’s U.S. chief executive said during a news conference at the Los Angeles Auto Show. In the meantime, noted Michael Horn, a “goodwill package” including $1,000 in gift cards and dealership credits are about to head out to 120,000 of those consumers.

The ongoing scandal dominated the events scheduled for both Volkswagen and its upscale sibling, the Audi brand, during the L.A. show, and officials from both marques again apologized before trying to turn back to their plans for the future.

Breaking News!

Industry analysts have suggested that Volkswagen is already feeling the impact of the diesel rigging crisis which impacts 482,000 vehicles sold in the U.S., but the Audi brand, which only has one model impacted, has largely been unscathed, Audi of America President Scott Keogh telling reporters, “We’ll have a record November and a record December.”

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Courts Move to Consolidate, Speed Up VW Lawsuits

Former US Bankruptcy Judge appointed to oversee settlements.

by on Oct.29, 2015

VW now faces over 300 lawsuits for cheating on diesel emissions tests.

(The caption for the second photo has been corrected.)

So far, more than 300 lawsuits have been filed against Volkswagen in the wake of revelations it cheated on diesel emissions tests, and a former U.S. Bankruptcy Judge has been given the difficult challenge of trying to consolidate the various legal actions and usher in a settlement.

A panel of federal judges will meet in early December to take what could be the next step, deciding on a single venue to handle the expected mega-class action. VW faces the possibility of paying out billions of dollars to owners of the 482,000 diesel-powered vehicles it acknowledged were outfitted with software designed to make the cars appear to meet emissions standards while undergoing certification tests.

Insight!

That’s on top of the hefty fines – possibly as much as $18 billion – the German maker might have to pay the Environmental Protection Agency for violating the Clean Air Act. Separately, VW also faces the prospect of fines and possible criminal charges as the U.S. Justice Department looks into the cheating scandal.

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Volkswagen Drops $1.83 Bil into the Red for Q3

Senior exec apologizes for diesel emissions scandal during Tokyo Motor Show news conference.

by on Oct.28, 2015

The real battle for world dominance will be in China where VW is firmly entrenched.

VW only began to feel the impact of its diesel scandal during the third quarter.

Only starting to feel the financial pain from its diesel emissions scandal, Volkswagen AG reported a $1.83 billion third-quarter loss on Wednesday.

The German maker also announced that it saw a 1.5% year-over-year decline in vehicle sales for the first nine months of 2015, to 7,430,794. VW surged to first place in the global sales race during the first half of the year, but it has now slipped back into second, losing its lead to Toyota Motor Co.

In the Know!

Third-quarter sales and earnings were only partially impacted by the revelation that VW had cheated on diesel emissions tests by installing special software in 11 million vehicles sold worldwide – including 482,000 in the U.S. During an appearance at the Tokyo Motor Show earlier on Wednesday, a senior VW official bowed an issued an apology.

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Just Following Orders? Who Was Really Responsible for VW’s Emissions Cheating?

VW’s US CEO blames a “couple of software engineers.”

by on Oct.08, 2015

"This was not a corporate decision," VWoA CEO Michael Horn told lawmakers.

During a hearing on Capitol Hill Thursday, Volkswagen of America CEO Michael Horn told lawmakers that the German automaker’s emissions cheating scandal was the work of a handful of rogue employees and not a high-level corporate conspiracy.

His comments drew a skeptical response from members of the House Oversight and Investigations panel looking into the discovery that Volkswagen rigged the software controlling its four-cylinder diesel engines so that they would sharply reduce emissions while being tested. In real world use, however, they were allowed to produce as much as 40 times the U.S. mandate for smog-causing oxides of nitrogen.

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Getting the Truth Out!

The Oversight panel has joined a growing list, including the U.S. Justice Department, the EPA and German federal prosecutors, trying to find out just how high up the command chain at Volkswagen the emissions rigging project was approved or, at least, known about. But some experts suggest the real question is whether VW management simply set the tone that made such subterfuge possible, even necessary.

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VW Planning to Cut US Diesel Line-Up

Embattled German maker could face problems with planned recall.

by on Oct.08, 2015

VWoA CEO Michael Horn, shown with the CrossCoupe Concept, will testify before Congress.

It is, by far, the largest seller of diesel passenger cars on the American market, but in the wake of its embarrassing and costly emissions scandal, Volkswagen is planning to cut back the number of diesel products it will offer in the U.S. – at least for the coming year.

The decision to withdraw a request for regulators to certify some of its new models comes at the same time VW is working with the EPA to develop a fix for 482,000 diesels already sold in the States that were equipped with software designed to cheat on emissions tests. In real-world use, they may produce as much as 40 times the legal limit of pollutants such as smog-causing oxides of nitrogen.

Stay in the Know!

VW’s new CEO Matthias Mueller said this week the automaker plans to begin repairing the 11 million small diesels it sold worldwide with so-called “defeat device” software starting in January. But the U.S. recall could take longer to start. And there is concern that many current owners simply may refuse to get their vehicles repaired.

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VW Diesel Emissions Cheating Scandal Heading to Congress

EPA prepares for “likely” recall.

by on Oct.02, 2015

The EPA has yet to order a formal recall of VW diesels, like this one, but that could happen soon.

Two weeks after revealing that Volkswagen had cheated on diesel emissions tests, officials from the Environmental Protection Agency still have not formally ordered a recall of 482,000 VW products, but that step is “likely” to take place, according to an EPA spokesperson.

Sources inside Volkswagen, meanwhile, told TheDetroitBureau.com that the automaker is now working with the federal agency to come up with an acceptable fix for diesel models that can produce as much as 40 times the allow level of pollutants such as smog-causing NOx. VW has already said it is developing a retrofit for a total of 11 million diesel vehicles sold worldwide that contained a secret “defeat device” designed to reduce emissions levels during testing.

The Full Story!

VW’s problems have continued to escalate in recent days, and even as prosecutors in both the U.S. and Germany look into the scandal, the automaker’s top U.S. executive has been summoned to Capitol Hill where he will testify before a congressional oversight panel on October 8th.

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VW’s Reputation Takes Big Hit from Scandal, Finances Likely to Follow

Only one in 4 Americans now have positive image of maker, finds survey.

by on Oct.01, 2015

Looking a little tarnished?

Volkswagen’s once strongly positive image among American consumers has collapsed in the wake of revelations the German automaker cheated on diesel emissions tests.

The fact that the vast majority of potential buyers now do not trust the brand could have a major impact on its sales, warn researchers at AutoPacific, Inc, the consulting firm that conducted the survey. While it is too early to measure that impact, VW has already announced the first cuts in its worldwide production network, and the company’s supervisory board is now looking for ways to shore up its finances.

Stay in the Know!

“How Volkswagen handles this issue is critical,” said Dan Hall, a vice president at AutoPacific. “Trust is an important issue with consumers, and every brand works hard to maintain that trust.”

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