Scan­dal-hit VW needs more than a year to fix all cars with cheat­ing de­vice

The China Post - - WORLD BUSINESS - BY HUI MIN NEO

Volk­swa­gen’s new boss said Wed­nes­day it would take more than a year to fix all its cars fit­ted with pol­lu­tion cheat­ing de­vices, as the Ger­man auto gi­ant scram­bled to put its big­gest cri­sis be­hind it.

Matthias Mueller, who took over VW’s reins at the height of the scan­dal, said four em­ploy­ees had been sus­pended, although he did not be­lieve top man­age­ment could have been aware of the de­cep­tion.

The world’s big­gest car­maker by sales has launched in­ves­ti­ga­tions into who was be­hind the de­cep­tion of global pro­por­tions, in which 11 mil­lion of its diesel cars were equipped with soft­ware that switches the en­gine to a low-emis­sions mode dur­ing tests.

It then turns off pol­lu­tion con­trols when the ve­hi­cle is on the road, al- low­ing it to spew out harm­ful lev­els of toxic gases.

The scan­dal around the so-called de­feat de­vices has wiped more than 40 per­cent off Volk­swa­gen’s mar­ket cap­i­tal­iza­tion, but the di­rect and in­di­rect costs are still in­cal­cu­la­ble as the com­pany risks fines in sev­eral coun­tries and pos­si­ble dam­ages from cus­tomers’ law­suits.

As Volk­swa­gen faced a dead­line Wed­nes­day to sub­mit to Ger­man author­i­ties its plans and timetable to fix the ve­hi­cles, Mueller told the Frank­furter All­ge­meine Zeitung daily in an in­ter­view that once the pro­pos­als are ac­cepted, “we will or­der the parts” to fix the af­fected ve­hi­cles.

“If all goes as ex­pected, we can start the re­pairs in Jan­uary. By end 2016, all the cars should be in or­der,” he said.

The for­mer Porsche chief added that “four peo­ple, in­clud­ing three re- spon­si­ble di­rec­tors on dif­fer­ent lev­els of the de­vel­op­ment of Volk­swa­gen en­gines,” had been sus­pended over the de­cep­tion, adding that “oth­ers were al­ready on par­tial re­tire­ment.”

Ger­man press have named Audi’s de­vel­op­ment chief Ul­rich Hack­en­berg among those sus­pended, although Volk­swa­gen would not con­firm the in­for­ma­tion.

‘Com­plex process’

Mueller said he did not be­lieve that the man­age­ment team of Martin Win­terkorn, who was forced to quit as chief ex­ec­u­tive at the height of the scan­dal, could have been aware of the scam.

“Do you re­ally think that a boss would have the time to be con­cerned about the de­tails of en­gine soft­ware?” he said.

The de­vel­op­ment of an en­gine is “a com­plex process that in­volves in­ter­ac­tion be­tween pro­gram­mers, en­gine and gear box de­vel­op­ers and those who deal with mea­sure­ments for of­fi­cial tests,” he said, adding that these are tasks in which “a di­rec­tor is not di­rectly in­volved.”

Volk­swa­gen has said that the 6.5 bil­lion eu­ros it has set aside in the third quar­ter was only the es­ti­mated sum to cover re­pairs for af­fected ve­hi­cles.

Most of the ve­hi­cles af­fected would only need a mi­nor ad­just­ment in their en­gines but some would re­quire a ma­jor over­haul, adding that these would be “of course car­ried out free of charge,” said Mueller.

To meet the bil­lions of eu­ros in fi­nan­cial out­lays, Mueller said the group would em­bark on a huge cost­cut­ting pro­gram and re­view sev­eral projects.

Ger­many’s football world would not be spared, as Volk­swa­gen owns the VfL Wolfs­burg soc­cer club and has in­vest­ments in 17 pro­fes­sional clubs.

VW needs ev­ery cent as in the United States alone, it faces up to US$18 bil­lion in fines from just the En­vi­ron­men­tal Pro­tec­tion Agency, plus po­ten­tial pay­outs from class ac­tion law­suits and penal­ties from other reg­u­la­tors.

Asked about the loom­ing fines, Mueller noted how­ever in the in­ter­view: “Think about this: no one died from this, our cars were and are safe.”

In what could be com­fort­ing to the group’s 600,000 staff at 100 plants world­wide, Mueller said or­ders had not slumped de­spite the scan­dal.

“We are see­ing as much de­mand as ever from cus­tomers, which gives us courage,” he said. “If the sit­u­a­tion changes, we will see how we can re­act.”

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