House slams ‘arrogance’ of VW; CEO says no buyback planned
Michael Horn apologizes, says repairs could take years
Cameras clicked like pattering raindrops against the hood of a car as Volkswagen U.S. CEO Michael Horn raised his right hand Thursday and became the first executive from the German automaker to testify under oath about the company’s emissions scandal.
With members of Congress questioning Volkswagen’s integrity, Horn took the witness stand amid feverish global interest in the automaker’s admission that it rigged 11 million cars worldwide with software designed to fool regulators into believing the cars were compliant with emissions standards.
Horn, who has not been implicated in the scandal, apologized, pledged to fix cars and said three workers in Germany have been suspended. He said he believes the company’s American employees did not know about the matter until recently, saying “rogue” German software engineers were likely to blame.
He emphasized that the company’s internal investigation is ongoing but suggested that the motivation may have been an effort to meet cost goals.
If so, that’s not an excuse, Horn said, calling the entire episode “deeply troubling.”
“I think it’s dead wrong if you put corporate profits before people,” he said.
Horn said for the first time that the automaker would fix the 482,000 U.S. diesel cars involved in the scandal, not buy them back from con- sumers, though he indicated the company is weighing compensating owners for lost value.
Several members of Congress urged the company to buy back those cars. Rep. Chris Collins, R-NY, rejected Horn’s suggestion that the problem can be blamed on rogue engineers. “It’s a sign of arrogance,” Collins said. “It’s a sign of not admitting yet the severity of your problems.”
U.S. Rep. Fred Upton, RMich., chairman of the overall committee, said Volkswagen must “pay a steep price” for a culture of “cheating and betrayal.”
The cheating has exposed the German automaker to Environmental Protection Agency fines of up to $18 billion, a U.S. Justice Department criminal probe, consumer lawsuits and investigations in Europe. The cars are emitting harmful pollutants at rates of up to 40 times acceptable U.S. standards.
Kelley Blue Book calculated that buying back all the U.S. diesel vehicles embroiled in the scandal would cost the company about $7 billion.
In contrast, KBB’s sales data show that the average value of the 2009-15 diesel models have fallen by 13% since the scandal erupted, erasing nearly $1,700 in value per unit.
Horn could not give a timeline for repairs of 325,000 of those vehicles — the oldest models dating back to 2009 that will require significant hardware changes because they do not have sufficient physical space for the equipment that is required.
The company is still developing a proposed fix for those cars, but it could take years to repair them all because of the complex hardware and software changes that will be required, he said.