VW America Boss: We Screwed Up

2023 Author: Eric Donovan | [email protected]. Last modified: 2023-08-25 09:36

VW is still in distress because of the emissions scandal in the USA. Now the group had to issue a profit warning and is putting back 6.5 billion euros. The car manufacturer's America boss

The affair of manipulated emissions tests on VW diesel cars in the USA is making waves. The downward trend in Volkswagen shares continued unabated on Tuesday. By late morning, the Wolfsburg-based preference share on the Frankfurt Stock Exchange fell by a further 6 percent. At noon, the group had to issue a profit warning. In order to cushion the consequences of the manipulation for customers and to pay for further measures, around 6.5 billion euros will be set aside, as the group announced in Wolfsburg on Tuesday. "The Group's earnings targets for 2015 will be adjusted accordingly."

On Monday, the share price of Europe's largest car maker had already lost 18.6 percent - a stock market value loss of around 14 billion euros for the group. According to the US media, criminal consequences are now also possible. And the loss of image now also feeds worries about possible consequences for jobs.

US judicial investigation

The US Department of Justice is investigating whether VW are to be accused of criminal activities, reported the Bloomberg news agency, citing two people familiar with the investigation. VW itself was initially not available for a reaction. In criminal cases, US investigations can last months or years, end without results, but also lead to severe penalties. The Washington Department of Justice refused to speak to Bloomberg on the case.

A committee of the US Congress will also deal with the scandal. This was announced by the two US politicians Fred Upton (Energy and Trade Committee of the House of Representatives) and Tim Murphy (Investigation Subcommittee). In the coming weeks, a hearing on allegations by the EPA will be scheduled.

"The American people deserve answers and assurances that this will not happen again," said the statement by the two US Congressmen. The day before, Federal Transport Minister Alexander Dobrindt (CSU) had announced an instruction to the Federal Motor Transport Authority to initiate strict specific inspections by independent experts on VW diesel models.

The German Institute for Economic Research (DIW) warned against damaging the quality concept “made in Germany”. DIW President Marcel Fratzscher told the “Bild” newspaper (Tuesday) that “other German exporters could also be damaged, because VW has been a flagship for products“Made in Germany””.

The President of the Federal Environment Agency (UBA), Maria Krautzberger, said of the manipulations: “Such exhaust gas fraud does not only deceive customers. It also leads to significantly poorer air. That endangers health.”As Krautzberger added, in 2014“at least 62 percent of the urban traffic-related measuring points were above the EU limit value for nitrogen dioxide”. The emissions from diesel cars had a significant share in this.

“The Federal Environment Agency has been pointing out since the end of the 1990s that the real pollutant emissions in Germany are also higher than the type test values that were determined on the roller dynamometer. That has to stop,”continues Krautzberger.

Steinmeier also demands quick clarification

It is now urgent "to limit the damage for VW and for German exporters in general". Federal Economics Minister Sigmar Gabriel expressed similar concerns on Monday, and Foreign Minister Frank-Walter Steinmeier (both SPD) also called for a quick clarification of the VW scandal on Tuesday.

At the presentation of a new Passat model on Monday evening (local time) in New York, VW's America boss Michael Horn admitted that the company had made a serious mistake and said: “We were dishonest with the EPA, we were dishonest with the authorities in California and, worst of all, we have been dishonest with our customers. To put it in good German: We screwed up."

In addition to a loss of image, Volkswagen faces fines of up to 18 billion dollars, recall costs, criminal consequences and possible recourse claims from disappointed customers and shareholders. The EPA accuses VW of manipulating pollutant measurements in diesel cars. The Wolfsburg have admitted misconduct and promised to cooperate with the authority. The group stopped selling the models in question in the USA. CEO Martin Winterkorn has promised an external investigation and a quick clarification.

On Wednesday, the innermost circle of the supervisory board wants to deal with the issue at a crisis meeting, according to VW circles. Two days later, at the VW supervisory board meeting Winterkorns, the contract extension that had already been announced is due. (dpa)