Volkswagen's CEO has told a German newspaper that the company will begin a massive recall in January. Executives are to testify in Washington over the ongoing diesel emissions cheating scandal.
Volkswagen Chief Executive Matthias Mueller told the Frankfurter Allgemeine Zeitung that the company believes "only" 9.5 million vehicles were affected and would have to be recalled.
"There are hopefully less. But there are still far too many," Mueller told the newspaper Wednesday, saying a recall could begin in January. "All the cars should be fixed by the end of 2016."
Industry experts had earlier estimated the scandal would affect about 480,000 VW vehicles in the United States and 11 million worldwide. It has sent tremors through the global auto industry and executives have already raised the prospect of massive job cuts for Volkswagen's 600,000-strong global workforce.
Defrauding the environment
Volkswagen has admitted to programming its on-board emissions systems to cheat during emissions tests making its diesel vehicles appear more clean-burning than they really are.
The automaking giant has been shaken by revelations about the carmaker's large-scale cheating of its diesel emissions tests in the US and elsewhere. Facing criminal liability and fines in the billions, already a third of the firm's value has been wiped off the stock markets since the news broke last month.
'A few bad apples' defense
The executive added that as far as he understood "only a few employees" were involved in the manipulation of the software for diesel cars, reiterating what the carmaker said in a letter this week, that it was the result of the "misconduct of a few individuals."
Volkswagen's top American executive Michael Horn heads to Washington this week to answer questions about the scandal to US lawmakers.
Representative Tim Murphy said lawmakers will investigate Volkswagen's admission that it installed "defeat-devices" in some diesel vehicles that emitted far more exhaust pollution than was legal.
"The American people want to know why these devices were in place, how the decision was made to install them and how they went undetected for so long," Murphy said in a statement. "We will get them those answers."
Volkswagen faces penalties of up to $18 billion (16 billion euros) from the US Environmental Protection Agency, although few expect the automaker to be ordered to pay the full amount.
Watchdog: VW likely calls on DC lobbyists
VW says it has set aside more than $7 billion to pay fines, recall costs and legal settlements. There are also signs the company is moving to strengthen its lobbying presence in Washington, though the required public disclosures of any new hires or increased spending won't be due for weeks.
"Typically when companies are having trouble, one of the things they do for damage control is step up their lobbying," Dale Eisman, spokesman for the public interest group Common Cause.
"It certainly would fit the pattern of other companies that have had embarrassing episodes with corporate mistakes. You step up your lobbying and do what you can to repair your image with decision makers."
The accusations against the automaker remain serious and could have wide ranging ramifications for the automaker and its various investments.
CFO tapped to chair board
Investors and employees are watching events unfold with trepidation as the company's supervisory board is set to confirm that VW finance chief Dieter Poetsch will be the group's new board chairman.
The company's major shareholders - the Piech and Porsche families - secured the backing of the board's five-member executive committee last week for Poetsch's appointment, despite reservations expressed by the group's unions.
Critics have questioned whether the next board chairman should be one of the top executives who was at the helm of the company when the manipulations were alleged to have taken place.
At the same time union leaders are trying to reassure its members that so far no jobs are in jeopardy.
"The good news at the moment is that there are no consequences for jobs," Bernd Osterloh, chief of the workers' council at VW, was quoted as saying by the DPA press agency.
jar/jr (Reuters, AP)