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| VW admits emissions scandal was caused by 'whole chain' of failures | |
| (34 minutes later) | |
| Volkswagen has admitted for the first time that the diesel emissions scandal was the result of a collection of failures within the company, rather than just the actions of rogue engineers. | |
| Hans Dieter Pötsch, the VW chairman, said there had been a “whole chain” of errors at the German carmaker and there was a mindset within the company that tolerated rule-breaking. | Hans Dieter Pötsch, the VW chairman, said there had been a “whole chain” of errors at the German carmaker and there was a mindset within the company that tolerated rule-breaking. |
| Related: VW emissions scandal: misconduct, process failure and tolerance of rule-breaking blamed - live | Related: VW emissions scandal: misconduct, process failure and tolerance of rule-breaking blamed - live |
| VW provided the most detailed explanation so far about how the diesel emissions scandal occurred at a press conference in Germany. | VW provided the most detailed explanation so far about how the diesel emissions scandal occurred at a press conference in Germany. |
| Pötsch said engineers had installed defeat devices in engines after realising they could not hit emissions targets for diesel cars in the US by “permissible means”. Nine managers have been suspended over possible involvement in the scandal. | Pötsch said engineers had installed defeat devices in engines after realising they could not hit emissions targets for diesel cars in the US by “permissible means”. Nine managers have been suspended over possible involvement in the scandal. |
| Although Pötsch said no senior executives were believed to have been actively involved in cheating emissions tests, he warned: “This is not only about direct but overall responsibility.” | Although Pötsch said no senior executives were believed to have been actively involved in cheating emissions tests, he warned: “This is not only about direct but overall responsibility.” |
| The VW chairman said the scandal was the result of a combination of individual misconduct and mistakes in one part of the business but also flaws in company processes and a tolerance of rule-breaking. Work began on the defeat device as early as 2005 when VW decided to promote its diesel engines in the US. | |
| “We are talking here not about a one-off mistake but a whole chain of errors,” he said. | |
| VW has already admitted installing defeat devices in 11m vehicles worldwide to cheat diesel emissions tests. It faces the prospect of paying tens of billions of euros in fines and compensation to customers. | VW has already admitted installing defeat devices in 11m vehicles worldwide to cheat diesel emissions tests. It faces the prospect of paying tens of billions of euros in fines and compensation to customers. |
| Pötsch said an investigation involving an internal and external team of 450 people was continuing and more details would be provided in April at VW’s annual meeting. A team led by the law firm Jones Day has already interviewed 87 members of staff, seized 1,500 devices belonging to 400 employees and trawled through data equivalent to 50m books. | Pötsch said an investigation involving an internal and external team of 450 people was continuing and more details would be provided in April at VW’s annual meeting. A team led by the law firm Jones Day has already interviewed 87 members of staff, seized 1,500 devices belonging to 400 employees and trawled through data equivalent to 50m books. |
| “We are relentlessly searching for those responsible for what happened and you may rest assured we will bring these persons to account,” Pötsch said. | “We are relentlessly searching for those responsible for what happened and you may rest assured we will bring these persons to account,” Pötsch said. |
| VW will try to avoid a similar crisis in the future by overhauling its infrastructure and internal systems. For example, emissions will tested during on-road driving rather than in a laboratory and will be verified by external and independent third parties, which Pötsch said he hoped “will help us win back trust”. | VW will try to avoid a similar crisis in the future by overhauling its infrastructure and internal systems. For example, emissions will tested during on-road driving rather than in a laboratory and will be verified by external and independent third parties, which Pötsch said he hoped “will help us win back trust”. |
| He added: “Even though we cannot prevent misconduct by individuals once and for all, in future it will be more difficult to bypass our processes.” | He added: “Even though we cannot prevent misconduct by individuals once and for all, in future it will be more difficult to bypass our processes.” |
| Related: Volkswagen sees 25% US sales drop compared with 2014 after scandal | Related: Volkswagen sees 25% US sales drop compared with 2014 after scandal |
| The company will start to repair cars fitted with a defeat device next month. The recall of vehicles with 2-litre engines will begin in January, with 1.2-litre vehicles in the second quarter of 2016 and 1.6-litre vehicles in the third quarter. Vehicles with 1.6-litre engines will require a new flow transformer device, part of the air intake system, to be fitted alongside new software. | The company will start to repair cars fitted with a defeat device next month. The recall of vehicles with 2-litre engines will begin in January, with 1.2-litre vehicles in the second quarter of 2016 and 1.6-litre vehicles in the third quarter. Vehicles with 1.6-litre engines will require a new flow transformer device, part of the air intake system, to be fitted alongside new software. |
| However, VW is still working on repairs for vehicles in the US, where emissions targets are more stringent, and a compensation package for motorists that will reflect any fall in the re-sale value of their car. | However, VW is still working on repairs for vehicles in the US, where emissions targets are more stringent, and a compensation package for motorists that will reflect any fall in the re-sale value of their car. |
| Matthias Müller, the VW chief executive, claimed the carmaker would come back from the crisis, despite figures showing that sales of VW cars fell 25% in the US and 20% in the UK last month as consumers turned against the brand. | Matthias Müller, the VW chief executive, claimed the carmaker would come back from the crisis, despite figures showing that sales of VW cars fell 25% in the US and 20% in the UK last month as consumers turned against the brand. |
| “Even though this situation is serious, the company will not go to pieces because of this,” he said. | “Even though this situation is serious, the company will not go to pieces because of this,” he said. |
| Related: VW sales drop 20% in UK as diesel emissions scandal hits carmaker | Related: VW sales drop 20% in UK as diesel emissions scandal hits carmaker |
| Müller, who replaced Martin Winterkorn in September, pledged to overhaul the culture of the company by making it more open, less hierarchical, and removing divisions between brands. | Müller, who replaced Martin Winterkorn in September, pledged to overhaul the culture of the company by making it more open, less hierarchical, and removing divisions between brands. |
| “We don’t need yes-men, but managers and engineers who make good arguments in support of their convictions and projects, who think and act like entrepreneurs,” he said. | “We don’t need yes-men, but managers and engineers who make good arguments in support of their convictions and projects, who think and act like entrepreneurs,” he said. |
| “I am calling for people who are curious, independent, and pioneering. People who follow their instincts and are not merely guided by the possible consequences of impending failure.” | “I am calling for people who are curious, independent, and pioneering. People who follow their instincts and are not merely guided by the possible consequences of impending failure.” |
| He also pledged “greater humility” at VW and tighter control of costs, meaning the company will sell its private Airbus A319 aircraft and tone down its presence at motor shows. However, Müller said there are “no plans” to sell assets, which could include the company’s brands such as Audi, Seat and Skoda. | He also pledged “greater humility” at VW and tighter control of costs, meaning the company will sell its private Airbus A319 aircraft and tone down its presence at motor shows. However, Müller said there are “no plans” to sell assets, which could include the company’s brands such as Audi, Seat and Skoda. |
| “Overall, the situation is not dramatic, but, as was to be expected, it’s tense,” the 62-year-old said. | “Overall, the situation is not dramatic, but, as was to be expected, it’s tense,” the 62-year-old said. |
| “We are fighting for every customer and every car.” | “We are fighting for every customer and every car.” |
| The press conference followed a rare piece of good news for VW. On Wednesday, the company announced that the number of cars with irregular carbon dioxide levels was far lower than originally feared. | The press conference followed a rare piece of good news for VW. On Wednesday, the company announced that the number of cars with irregular carbon dioxide levels was far lower than originally feared. |
| VW warned last month that CO2 emissions and fuel consumption figures may have been rigged in 800,000 cars. However, it now believes that only about 36,000 vehicles are affected. | VW warned last month that CO2 emissions and fuel consumption figures may have been rigged in 800,000 cars. However, it now believes that only about 36,000 vehicles are affected. |
| The dramatic admission that VW may have rigged CO2 emissions as well as diesel emissions had threatened to significantly escalate the crisis at the company. | The dramatic admission that VW may have rigged CO2 emissions as well as diesel emissions had threatened to significantly escalate the crisis at the company. |
| VW initially estimated the “economic risks” of the CO2 discovery at €2bn (£1.45bn), but said it was too early to lower this estimate until more was known about the scale of the emissions rigging. | VW initially estimated the “economic risks” of the CO2 discovery at €2bn (£1.45bn), but said it was too early to lower this estimate until more was known about the scale of the emissions rigging. |
| Shares in VW rose 2% on Thursday following the press conference, but were still down more than 20% since the scandal broke in September. | Shares in VW rose 2% on Thursday following the press conference, but were still down more than 20% since the scandal broke in September. |