Business:
THE new boss of Volkswagen last night pledged to win back the trust of customers in the wake of the emissions-rigging scandal.
Matthias Mueller was parachuted into the top seat at the German car giant just two days after the resignation of chief executive Martin Winterkorn.
“My most urgent task is to win back trust for the Volkswagen Group by leaving no stone unturned and with maximum transparency, as well as drawing the right conclusions from the current situation,” said Mr Mueller.
“Under my leadership, Volkswagen will do everything it can to develop and implement the most stringent compliance and governance standards in our industry.”
VW blamed a “small group” of people for the scandal, as it suspended a number of staff yesterday and announced a restructuring.
Winfried Vahland, who runs Skoda, will take over a newly created position with responsibility for all of North America. Michael Horn, who earlier this week admitted the company had “totally screwed up”, will remain as become chairman of the board in November.
But the scandal showed no signs of abating yesterday, despite VW confirming that 5m cars are affected, down from the 11m initially feared.
Executives at VW were accused of masterminding the emissions scandal from the company’s headquarters in Wolfsburg.
The chain of command of those involved in the rigging deception stretched all the way back from the US to VW’s home patch, it was claimed, with executives in Germany controlling the key aspects of tests which the firm now admits were manipulated.
It was said that the cars that missed US emissions targets were reported to managers in Wolfsburg.
Testers at a California site evaluated vehicles and results were sent back to Germany before being passed to the US Environmental Protection Agency.
If any car failed to meet emissions targets, a team of engineers from Volkswagen headquarters or Audi’s base in Ingolstadt was flown in.
The disclosures followed an explosive week for VW in which the car giant admitted falsifying tests by using a complex software programme in its vehicles.
The news has wiped billions of pounds off the value of the company and the stock
‘The prospects of class actions are significant. The new chief is under a huge amount of pressure’
plunged as much as 7pc yesterday after the crucial board meeting dragged on.
Germany’s transport minister Alexander Dobrindt told reporters in Berlin that “Volkswagen tampering was undoubtedly illegal”.
He also revealed that 2.8m vehicles in Germany are now believed to be affected by the emissions rigging, includ- ing the smaller 1.2 litre engine cars and “light trucks”. Up to 1.5m vehicles could be recalled in Britain.
Mr Mueller, the former Porsche boss, will have the world’s “toughest corporate gig” in the words of one analyst, as he attempts to rescue the car maker from the wreckage of the pollution scandal.
Alexander Traill, a partner at the risk and insurance law firm BLM, said: “Mr Mueller may be walking into a liability minefield. The prospects of class actions by disgruntled shareholders are significant, particularly if the share price of VW is negatively impacted in the longer term. The new chief is under a huge amount of pressure to rectify the problem.”
The crisis has overwhelmed the company and tarnished VW’s previously spotless reputation for reliability and quality.
It is also likely to land VW with tens of billions of pounds worth of fines, recall costs and legal bills as govern- ments, consumer groups and investors around the world look to hold the company to account.
Several countries have already opened investigations – some of them criminal – into the affair.
The latest nations to launch probes include India, Brazil, Australia, South Africa and Norway, whose economic crime unit has opened an investigation.
Private law firms are also lining up to take on VW, with a class action suit already being filed by a Seattle law firm.
The automobile giant already faces at least 60 lawsuits which have been filed in federal courts in the US by consumers alleging the company committed fraud by cheating on emissions tests, which means their cars might not be as efficient as they believed them to be.