Volkswagen CEO Matthias Mueller told a group of 20,000 employees today in Germany that the company will be cancelling and delaying a number of projects in light of the diesel emission scandal.
"Therefore we are putting all planned investments under review. What is not urgently needed will be scrapped or delayed. And therefore we will adjust our efficiency program. I will be very open: this won't be painless," said Muller.
Fixing around 11 million vehicles around the world that are affected by the rigged software is a costly prospect for Volkswagen. Muller says the $7.29 billion set aside for repairs will not be enough to pay for fines and lawsuits.
Volkswagen has been criticized for being an “incredibly inefficient” company. Last year, the automaker had set aside $17.4 billion research and development. That is higher than what Ford and General Motors spent on r&d combined last year.
“Where’s the innovation? Obviously not in diesel engines. There’s a culture of spending and a lack of focus on efficiency in favor of striving to be bigger,” said Arndt Ellinghorst, an analyst with Evercore ISI.