Volkswagen warns it needs more than a year to fix all cars

Volkswagen's new boss said Wednesday the auto giant would need more than a year to fix all its pollution-cheating cars, as the company suspended four employees suspected of being behind the global deception.
Matthias Mueller, who took over the driver's seat at VW at the height of the crisis, said he did not believe top management could have been aware of the scam which threatens to cost the company billions in vehicle overhauls and fines.

The world's biggest carmaker by sales has launched investigations into who was behind the scam involving over 11 million diesel cars which were equipped with software that switches the engine to a low-emissions mode during tests.

The so-called defeat devices then turn off pollution controls when the vehicle is on the road, allowing it to spew out harmful levels of toxic gases.

The shock revelations have wiped more than 40 percent off Volkswagen's market capitalisation, 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 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 in an interview.

The former Porsche chief added that "four people, including three responsible 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 as 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 ($7,3 billion) it set aside in the third quarter was only the estimated sum to cover repairs of affected vehicles.

Mueller outlined the complexity of the repairs, saying: "We need not just three solutions, but thousands."
 'Our cars are safe' -
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Volkswagen faces up to $18 bn in US fines from just the Environmental Protection Agency (AFP Photo/J …

This is because there are different models of cars involved, with different types of gear boxes or country-specific designs.

Most of the vehicles affected would only need a "software update in the local workshop", said Mueller.

"Others need new pumps and catalytic converters," he said.

And fitting in catalytic converters, for instance, could in turn require a complete reconfiguration of the engine, he noted, adding that these works would be "of course carried out free of charge".

To meet the billions of euros in financial outlays, Mueller said the group would embark on a huge cost-cutting programme and review several projects.
Germany's football world would not be spared, as Volkswagen owns the VfL Wolfsburg club and has investments in 17 professional clubs.

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

Asked about the looming fines, Mueller noted however: "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."

But environmental group Greenpeace criticised the months-long delay until January for the recall.

It "raises the legal question of how the population will be protected against the excessive nitrogen oxide emissions from manipulated cars until the callback," said the activist group's mobility expert Daniel Moser.

"Much more shocking, however, is that the company continues its wrong strategy. Instead of tinkering with cars that are too heavy, VW must take the first step toward building cleaner cars."