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  1. More bad news for Volkswagen this week. Speaking with German publication Wirtschaftswoche, California Air Resources Board's (CARB) chair Mary Nichols said in their testing, only Volkswagen TDI models were found to have cheating devices. "So far we have found in vehicles of other brands no fraudulent shutdown. This does not mean that all emissions are as we would wish. But there is nothing that comes close to the magnitude of the excess in VW vehicles," Nichols said CARB will continue testing diesel vehicles. Meanwhile, Automotive News reports that Volkswagen has halted production of 2016 Passat TDI models at its Chattanooga, TN plant. No word on production was ended as a spokesman tells AN that he only learned about it today, but it's safe to assume it had to be some after the company withdrew its application for EPA certification on 2016 models equipped with the 2.0 TDI. Automotive News says Volkswagen continued production of the Passat TDI even after the EPA announcement that the 2.0 TDI was found to cheat back in September. Source: Automotive News (Subscription Required), Wirtschaftswoche, Reuters
  2. A number of Volkswagen engineers have admitted that they manipulated CO2 emission data to meet ambitious goals to meet goals set by former Chief Executive Martin Winterkorn. German newspaper Bild am Sonntag (via Reuters) reports that engineers filled tires with more air and mixed diesel with their motor oil to make them use less fuel. This reportedly began after then-CEO Martin Winterkorn's announcement at the 2012 Geneva Motor Show that by 2015, the company would cut CO2 emission levels by 30 percent. Engineers at the time were afraid to tell the CEO that this goal was impossible and decided to cheat. "Employees have indicated in an internal investigation that there were irregularities in ascertaining fuel consumption data. How this happened is subject to ongoing proceedings," a Volkswagen spokesman told Reuters. This report comes to light as Volkswagen announced last week that 800,000 vehicles in Europe - mostly diesel - were underreported for fuel consumption and carbon dioxide emissions. Source: Bild am Sonntag via Reuters, New York Times
  3. Volkswagen's reputation has been taking a number of big hits due to the cheating software they used in a number of their diesel models to pass EPA regulations. But a new report says the company is planning to regain the trust of some of their owners. The Truth About Cars learned from a source that Volkswagen will be announcing a program that offers owners of affected TDI models (new and used) to recive a prepaid card. Two cards will be available to owners; the first will be a $500 card that can be used anywhere, while a second card - expected to be around $500 to $750 - can only be used at Volkswagen dealers. Details of this program are expected to be announced this week. Source: The Truth About Cars
  4. The sh*t is hitting the fan. The Environmental Protection Agency (EPA) and California Air Resources Board (CARB) announced today that Volkswagen had illegal 'defeat device' software installed on a number of their vehicles equipped with the 3.0L TDI V6 to evade diesel emission testing. The two parties say the software allowed the TDI engine to emit nine times the legally allowable pollution limit. Vehicles involved in this latest allegation include, 2014 Volkswagen Toureg TDI 2015 Porsche Cayenne Diesel 2016 Audi A6 TDI, A7 TDI, A8 TDI, A8L TDI, Q5 TDI “VW has once again failed its obligation to comply with the law that protects clean air for all Americans. All companies should be playing by the same rules. EPA, with our state and federal partners, will continue to investigate these serious matters, to secure the benefits of the Clean Air Act, ensure a level playing field for responsible businesses, and to ensure consumers get the environmental performance they expect,” said Cynthia Giles, assistant administrator of the Office for EPA’s Enforcement and Compliance Assurance. Source: The Detroit News UPDATE: Volkswagen has issued a statement on the EPA's announcement. The United States Environmental Protection Agency (EPA) informed Volkswagen Aktiengesellschaft on Monday that vehicles with V6 TDI engines had a software function which had not been adequately described in the application process. Volkswagen AG wishes to emphasize that no software has been installed in the 3-liter V6 diesel power units to alter emissions characteristics in a forbidden manner. Volkswagen will cooperate fully with the EPA clarify this matter in its entirety. EPA's Notice of Violation is below.
  5. Volkswagen is looking to limit the damage that has been caused by the diesel emission scandal. According to Automotive News, part of this comes from buying some used TDI model on U.S. dealer lots at pre-crisis prices. Speaking with dealers briefed on the plan, Volkswagen will guarantee the value of used models equipped with 2.0 TDI containing the illegal software sitting on dealer lots. If the vehicles aren't sold within 60 days, Volkswagen will buy them back. In a memo from Volkswagen of America COO Mark McNabb, the program will take three phases. The first phase will have Volkswagen making an inventory of the TDI models to help the company figure out which ones are eligible for the program. Volkswagen expects this phase to finish by the middle of November. Further details of the other two phases will take place later in the month. Volkswagen hopes this plan will stop the freefall prices in light of the scandal. According to Kelly Blue Book, the average price of a Volkswagen TDI model dropped 16 percent after the scandal was brought to light. The plan will also hopefully prevent a pileup of diesel vehicles sitting on dealer lots. Source: Automotive News (Subscription Required)
  6. The Volkswagen diesel scandal has prompted the German transport minister to meet with the counterpart in the U.S. According to Reuters, Alexander Dobrindt will be holding talks today with Anthony Foxx, the U.S. Secretary of Transportation about the scandal. The report goes on to say that Dobrindt hopes to meet with officials from the EPA. That's not all that is taking place in the U.S. for Volkswagen. Another report from Reuters says the company has put plans of overhauling the management and overall strategy for the U.S. on hold till they deal with the litany of lawsuits and penalties. "What matters more than anything else right now is to sort out this disaster," a source said. "If we fail to do that, then questions that are completely different (than the future U.S. leadership) will come up," Now one of items that this decision affects is finding someone to take the place of North American head Winfried Vahland, who stepped down a few weeks after being announced to the position. Source: Reuters, 2
  7. Days after the news came out that Volkswagen had outfitted a number of diesel vehicles with illegal software, the company set aside 6.5 billion Euros (about $7.2 billion) to deal with lawsuits and fines. But Volkswagen Group CEO Matthias Müller says that isn't enough. Speaking to reporters at Volkswagen's HQ, Müller said the 6.5 billion is just for the recall. "I can only speculate about any further provisions. Should there be a change in sales volumes, we would react rapidly," said Müller. So how much more could Volkswagen be in for? According to a report done by Credit Suisse, the worst-case scenario could see Volkswagen spending 78 billion Euros (about $84 billion). The best-case scenario has Volkswagen spending 23 billion Euros (about $25 billion). The biggest cost according to the report is owner reimbursement for the lost value of their vehicles. "The market does not appear to be discounting negative knock-on effects," said Credit Suisse analysts in the report. "The outcome for recall costs and fines is unclear and largely depends on the engine performance post repair." Source: Reuters, CNNMoney
  8. Another week has passed and some new information has come to light in the Volkswagen diesel scandal. First off, Volkswagen has confirmed one of their diesel engines doesn't have the cheat. The EA 288 TDI engine used in vehicles for the European-market has been checked out to see if it had the illegal software. In a statement issued by Volkswagen, the engine did not have “software constituting an improper defeat device as defined in laws is installed in vehicles with EA288 EU5 as well as EU6 engines in the European Union with those engines comply with legal requirements and environmental standards." Also, one of the questions that have been up in the air is how would the scandal affect the prices of used Volkswagen TDI models. Kelly Blue Book looked at data from auto auctions before and after the scandal broke. According to their research, the average price of diesel models dropped 16 percent. Average prices of gas models dropped 2.9 percent in the same time. "According to Kelley Blue Book Field Analysts, some auctions are still holding off on selling the affected Volkswagen inventory. While Volkswagen diesel auction prices are in decline, we could see larger fluctuations depending on how this inventory is handled," said Tim Fleming, analyst for Kelley Blue Book. Source: Volkswagen, Kelly Blue Book Press Releases are on Page 2 Volkswagen confirms: EA288 engines designed for EU5 and EU6 are not affected Thorough appraisal of the Diesel emissions issue Volkswagen confirms today that no software constituting an improper defeat device as defined in law is installed in vehicles with EA 288 EU5 as well as EU6-engines in the European Union. Consequently, new vehicles of the Volkswagen Group offered within the European Union with those engines comply with legal requirements and environmental standards. Volkswagen AG is systematically reviewing this issue worldwide. The group strives for a holistic solution for complying with the respective valid standards. After thorough examination it is now confirmed that no software constituting an improper defeat device as defined in law is installed in vehicles with EA 288 EU5-engines. Before, Volkswagen Group has confirmed that new EU6-compliant vehicles offered within the European Union fulfil all legal requirements and environmental standards. Volkswagen customers can visit the corporate websites such as www.volkswagen.de/info, which was set up on October 2, 2015 and enter the chassis number of their vehicle to find out straight away whether their vehicles are affected. Similar customer websites are active in the other EU countries and for the Audi, SEAT and Škoda brands. Work on the technical solutions detailed in the plan of measures is currently proceeding at full speed. Remedial action on the vehicles will begin in January 2016 – at no cost to customers. The measures are currently being developed for each affected series and each affected model year and will first be presented to the responsible authorities. Volkswagen will subsequently inform the owners of these vehicles over the next weeks and months. VOLKSWAGEN DIESEL VEHICLE PRICES DECLINE NEARLY 16 PERCENT, ACCORDING TO KELLEY BLUE BOOK DATA New-Car Shopping Activity Also Impacted by Recent Emissions Issue IRVINE, Calif., October 21, 2015 – Kelley Blue Book www.kbb.com, the only vehicle valuation and information source trusted and relied upon by both consumers and the automotive industry, today reports that average auction prices, along with new-car shopping activity on KBB.com, for Volkswagen diesel vehicles have declined four weeks after the diesel emissions issue was announced. The average auction price for Volkswagen diesel models dropped by nearly 16 percent since the news broke of the emissions crisis.[1] The average auction price for the brand's gasoline-powered vehicles declined by 2.9 percent.1 On KBB.com, Volkswagen new-car shopping activity for affected TDI models has decreased on average by 2.4 percent. "According to Kelley Blue Book Field Analysts, some auctions are still holding off on selling the affected Volkswagen inventory," said Tim Fleming, analyst for Kelley Blue Book. "While Volkswagen diesel auction prices are in decline, we could see larger fluctuations depending on how this inventory is handled." Volkswagen Site Metrics from Kelley Blue Book's KBB.com* The Volkswagen Golf SportWagen and Golf have seen the most significant declines in shopping activity, with decreases of 6.2 percent and 3.7 percent respectively. The Audi A3 and Volkswagen Jetta SportWagen are the only TDI models seeing increases in activity, at 1.6 and 3 percent respectively, which is consistent with segment-level traffic on KBB.com. Audi A3 shoppers are increasingly cross-shopping competing luxury models following the announcement. The most highly cross-shopped vehicles are the Lexus NX, BMW 2-Series and Mercedes-Benz CLA. ** * Kelley Blue Book's KBB.com Site Traffic, Comparing September Pre- (Weeks of August 31-September 13) and Post- (Weeks of September 14-October 18) Announcement Data. Please note: Data is compiled weekly (Monday-Sunday). ** Kelley Blue Book's KBB.com Cross-Shopping Data for Week of October 12-18, 2015 "During the past four weeks following the emissions announcement, traffic to KBB.com has generally decreased after an initial surge in interest for Volkswagen diesel models, likely because of the stop-sell and negative press," said Arthur Henry, senior manager of Strategic Insights for Kelley Blue Book. "Interestingly, with regard to cross-shopping data, consumers are not looking at fuel-efficient or hybrid vehicles. For example, shoppers interested in the Jetta TDI are looking to the Honda Civic, Mazda3 and Ford Fusion as alternatives, according to cross-shopping data from KBB.com."
  9. Reuters is reporting that Volkswagen developed several versions of its "defeat device" software for their diesel models. Three sources tell the news service the company used the different versions of the software on four diesel engine types. If this proves to be true, this could indicate a widespread cheating program at the company, not the rogue engineer claim that executives have been using as a defense. This also puts Volkswagen in a difficult position when it comes to potential fines. If executives are found to play a role in the plot to cheat emissions tests, fines could increase by a fair amount. "The more higher-ups that are involved, the more the company is considered blameworthy and deserving of more serious punishment," said Brandon Garrett, a corporate crime expert at the University of Virginia. Spokespeople for Volkswagen and Volkswagen of America declined to comment, citing the ongoing investigations by itself and outside parties. Source: Reuters
  10. Just when you think the hole Volkswagen has found itself in can't get any deeper, it has. Earlier this week, The Associated Press reported that Volkswagen disclosed to the EPA that 2016 model year TDI models have a different piece of software that would allow them to pass the emissions test. This software makes a pollution-control catalyst heat up faster to improve the performance of a device which cleans up the nitrogen oxide into harmless hydrogen and oxygen. Now fitting a device like this isn't illegal unless you don't disclose it during the emission certification process. Janet McCabe, acting assistant EPA administrator for air quality wouldn't say if Volkswagen's failure to disclose this device is illegal. "I don't want to speak to any potential subjects of an enforcement activity," said McCabe. This puts Volkswagen in a more precarious situation. If the EPA rules that this software was implemented as cheating device, it would the fine that much larger and call into question the claims made by Volkswagen executives that it was small group who did this. Despite this and other issues Volkswagen finds itself in, CEO Matthias Mueller said in a speech yesterday, that he sees the company bouncing back in a couple of years. "We have a good chance of shining again in two to three years," Muller said. "We will significantly streamline structures, processes and (decision-making) bodies. We must become leaner and take decisions more rapidly," he went on to say. Muller's speech comes on the heels of news that Volkswagen has ordered a mandatory recall affecting 8.5 million TDI vehicles in the European Union that will begin early next year. Source: Associated Press, Reuters
  11. In light of a scandal, the one item a company needs is stability. Unfortunately for Volkswagen, the diesel emission scandal has seemed to bring growing levels of instability. Case in point is the announcement of Dr. Winfried Vahland stepping down. Vahland was picked to become the head of Volkswagen's North American unit only a few weeks back. In a statement released by the automaker, the two had "differing views" on the company's new structure and his departure is "expressly not related" to the emissions scandal. Meanwhile, a report from German publication Spiegel says that at least 30 managers at Volkswagen were involved in cheating emission tests citing information from investigations done by Volkswagen and the law firm Jones Day. The report goes on to say that the number of people who knew about the cheating could expand as the investigations go on. A Volkswagen spokesman told Reuters that the number in Spiegel's report "is completely unfounded." Later this week, Volkswagen CEO Matthias Müller will meet with senior management and update them on the investigation and plan the next move. Source: Skoda, USA Today, Spiegel.de, Automotive News (Subscription Required) Press Release is on Page 2 Prof. Dr. Winfried Vahland leaves Volkswagen Group Mladá Boleslav, 14 October 2015 – After 25 years of successful work in Volkswagen Group, most recently as Chairman of ŠKODA, Prof. Dr. Winfried Vahland is leaving the company at his own request. Prof. Vahland will therefore not be taking up the position of overall responsibility for the North American Region (NAR). Differing views on the organisation of the new Group region have led to this decision; this decision is expressly not related to current events on the issue of diesel engines. Prof. Vahland began his work in Volkswagen Group in 1990. After holding several key positions at home and abroad, he took over Group responsibility as President and CEO of Volkswagen in China in 2005 and contributed significantly to the successful new direction of Volkswagen in China. He was appointed Chairman of the Board of Management of ŠKODA in 2010. Under his leadership, ŠKODA implemented the largest growth and model campaign in the brand’s history and positioned ŠKODA sustainably as a successful international high-volume brand. The CEO of Volkswagen Group, Matthias Müller emphasised: “In the last 25 years, Prof. Vahland made a great contribution to the company. We respect his decision and thank him for his exceptional performance.”
  12. A lot has been happening in the past couple of days for Volkswagen over the diesel emission scandal. Let's get you up to date. First, Volkswagen of American has pulled its application for EPA certification on 2016 models equipped with the 2.0L diesel four-cylinder until they comply with emission standards for the U.S. Volkswagen hasn't said when they will resend their application for certification. Next is the Associated Press reporting that German prosecutors carried out searches at a number of Volkswagen facilities, including the company's headquarters in Wolfsburg today. In a statement, the purpose of the searches was to "secure documents and data storage devices" to possibly identify the people involved and figure out how it was done. "We will support prosecutors as best we can in investigating the matter and the people responsible. This serves a prompt and thorough clearing-up, in which Volkswagen has great interest," Volkswagen said in a statement. Finally, the House Energy and Commerce subcommittee held their hearing on the Volkswagen diesel scandal today. Volkswagen of America CEO Michael Horn found himself in the line of fire. Here is a brief overview of what took place, Horn said 325,000 of the overall 482,000 vehicles involved in the scandal are fitted with the Gen 1 2.0L diesel engine (including the 2011 Passat TDI which came equipped with a Urea tank) will require hardware and software fix. The fix could take five to ten hours to complete. Other models fitted with newer versions of the 2.0L will only need a software update. Repairs are expected to start sometime next year [*]Horn testified that it was a few individuals and not the company who decided to implement the software into their diesel vehicles "Either your entire organization is incompetent when it comes to trying to come up with intellectual property, and I don't believe that for a second, or they are complicit at the highest levels in a massive cover-up that continues today," said Rep. Chris Collins, R-NY in response to Horn's answer. [*]Horn admits that's it hard to believe that Volkswagen's executives didn't know about this software for many years. [*]Volkswagen found about the study done by West Virginia University showing irregularities in two of their diesel models. Horn said Volkswagen engineers confirmed the results of the study and that software change was being worked on. [*]Horn said that he first learned about the software days before Volkswagen came clean to the EPA and California Air Resources Board Source: Automotive News (Subscription Required), Associated Press, The Detroit News, Reuters
  13. Volkswagen CEO Matthias Mueller told a German publication that it would launch a recall for diesel vehicles that have emission-cheating software starting in January and hopefully finish up fixing all of the vehicles by the end of the year. "If all goes according to plan, we can start the recall in January. All the cars should be fixed by the end of 2016," Mueller told the Frankfurter Allgemeine Zeitung. Now it should be noted this is only for vehicles in Europe. A Volkswagen of America spokeswoman says the EPA has to agree to the fix that Volkswagen would present. No timetable was given as to when a fix would be announced. Muller said a number of vehicles could be fixed by a software update, while others will need new injectors or larger catalytic converters. Source: Frankfurter Allgemeine Zeitung via Reuters, CNN Money
  14. 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. Source: Bloomberg
  15. One of the big questions coming out of the Volkswagen Diesel scandal was whether or not other automakers also manipulated emission tests. The German transport office at the moment doesn't have any evidence that says so. "At this point we have no indication of other manufacturers being involved," a spokesman for the office said at a government news conference today. Not the news Volkswagen wanted to hear as the company is beginning to feel the heat from European countries. France's prosecutors have opened a preliminary inquiry into suspected "aggravated deception" by the German automaker Separately, French consumer protection and fraud control authorities have opened their own investigation into Volkswagen's cheat Italy's antitrust body has opened an investigation into wrongdoing by Volkswagen Switzerland's Federal Roads Office has banned selling and registering new Volkswagen diesel vehicles equipped with software to cheat emission test Source: Reuters via Automotive News Europe (Subscription Required)
  16. Yesterday, Volkswagen CEO Matthias Mueller said that owners of affected diesel vehicles will need to have them 'refitted'. Muller didn't go into detail about what he meant, but Reuters has some possible ideas. Speaking with experts, Reuters says Volkswagen might have to develop different solutions for the 482,000 vehicles affected in the U.S. This comes down to Volkswagen using two different systems for controlling emissions; lean NOx traps (most Volkswagen diesel vehicles involved in the scandal) and a urea injection system (Volkswagen Passat TDI). For vehicles equipped with the lean NOx traps, Volkswagen could get away with using a software update says Marc Trahan, former executive vice president of group quality for Volkswagen. Trahan says the older engines shouldn't need to have newer hardware installed as it would require extensive "re-engineering" and cost a large amount of money. Others argue that a hardware solution may be the only way these vehicles meet EPA standards. For the Passat TDI, that might only need a software update. But it might bring up another problem; more fill-ups for the urea injection system. Most experts do agree these updates will cause the loss of performance and fuel economy. Source: Reuters
  17. If you didn't think the diesel scandal at Volkswagen could get any worse, think again. Let's begin with the former CEO at Volkswagen, Martin Winterkorn. Reuters is reporting that German prosecutors have opened an investigation into Winterkorn into "allegations of fraud in the sale of cars with manipulated emissions data" based on ten unidentified individuals filing charges. Now Winterkorn has said that he wasn't aware of any wrongdoing on his part in light of this scandal. There is a report from Automotive News Europe that says three r&d heads at Volkswagen have been suspended. The three are, Audi development chief Ulrich Hackenberg Porsche development head Wolfgang Hatz VW brand r&d boss Heinz-Jakob Neusser Those with keen eyes will notice two of these folks, Hackenberg and Hatz were rumored to be shown the door last week. Now Hackenberg and Hatz previously ran units at the heart of the Volkswagen diesel scandal. Hackenberg was responsible for Volkswagen development from 2007 to 2013, while Hatz oversaw Volkswagen group's engine development from 2007 to 2011. Audi and Volkswagen declined to comment. Source: Automotive News Europe (Subscription Required), Reuters
  18. After a meeting of Volkswagen's Supervisory Board today, Porsche CEO Matthias Müller has been named as the CEO of Volkswagen. Rumors of Müller's appointment have been swirling around for the past week. "My most urgent task is to win back trust for the Volkswagen Group – by leaving no stone unturned and with maximum transparency, as well as drawing the right conclusions from the current situation," said Müller in statement. Müller has a difficult task ahead of him as he'll need to right the ship at Volkswagen due to the ongoing crisis. He will also oversee a massive reorganization of the company. This begins with newly formed North American region structure which combines the USA, Mexico, and Canada. Heading up this structure will be the current chairman of Skoda, Winfried Vahland. Michael Horn, the President and CEO of Volkswagen Group of America will be sticking around, contrary to reports from yesterday. Source: Volkswagen, New York Times, Bloomberg Press Release is on Page 2 MATTHIAS MÜLLER APPOINTED CEO OF THE VOLKSWAGEN GROUP Sep 25, 2015 Müller remains Chairman of Porsche AG until a successor has been found Matthias Müller (62) has been appointed CEO of Volkswagen AG with immediate effect. This was decided by the Supervisory Board at its meeting in Wolfsburg today (Friday). Müller is currently Chairman of Porsche AG in Stuttgart. He will continue in this function until a successor has been found. The interim Chairman of the Supervisory Board of Volkswagen AG, Berthold Huber, underscored: "Matthias Müller is a person of great strategic, entrepreneurial and social competence. He knows the Group and its brands well and can immediately engage in his new task with full energy. We expressly value his critical and constructive approach." Bernd Osterloh, Chairman of the Group Works Council, commented: "When it comes to leadership appointments the Volkswagen Group does not need hasty decisions. We know and value Matthias Müller for his determination and decisiveness. He does not work on his own, rather he is a team player. That is what Volkswagen needs now." Matthias Müller said: "My most urgent task is to win back trust for the Volkswagen Group – by leaving no stone unturned and with maximum transparency, as well as drawing the right conclusions from the current situation. Under my leadership, Volkswagen will do everything it can to develop and implement the most stringent compliance and governance standards in our industry. If we manage to achieve that then the Volkswagen Group with its innovative strength, its strong brands and above all its competent and highly motivated team has the opportunity to emerge from this crisis stronger than before." Matthias Müller was born in Chemnitz (Saxony) on June 9, 1953. He completed his high school education in Ingolstadt followed by an apprenticeship as a toolmaker with AUDI AG. He then studied computer science at Munich University of Applied Sciences. After obtaining his master's degree in computer science, Müller resumed his career with AUDI AG in Ingolstadt in 1978, becoming Head of the Systems Analysis Division in 1984 and Head of Project Management for the Audi A3 in 1993. He assumed responsibility for Product Management at Audi AG, SEAT and Lamborghini in 1995. Müller moved to Wolfsburg as Head of Product Management of the Volkswagen Group and the Volkswagen brand in 2007 and also became a General Representative of the Volkswagen Group. He has been Chairman of the Executive Board of Dr. Ing. h.c. F. Porsche AG and a member of the Executive Board of Porsche Automobil Holding SE since 2010. In his function as Chairman of the Executive Board of Dr. Ing. h.c. F. Porsche AG, Müller was appointed member of the Board of Management of Volkswagen AG effective March 1, 2015. Matthias Müller's current contract as a Board member of Volkswagen AG will continue to apply in his new function as CEO. This contract runs until the end of February 2020. Matthias Müller succeeds Prof. Dr. Martin Winterkorn, who offered his resignation on Wednesday. THE VOLKSWAGEN GROUP IS RESTRUCTURING: SUPERVISORY BOARD PASSES RESOLUTIONS FOR NEW ORGANIZATION Sep 25, 2015 Brands and regions to be strengthened Vahland moves from Škoda to the Volkswagen brand Board of Management De Meo, Maier and Stackmann in new functions Board Member for Sales Klingler leaves the Group Contract with Board member for Procurement Garcia Sanz extended The Supervisory Board of Volkswagen AG approved a new management structure for the Group and the brands as well as for the North America region today (Friday) in Wolfsburg. The interim Chairman of the Supervisory Board, Berthold Huber, commented: "The new structure strengthens the brands and regions, gives the Group Board of Management the necessary leeway for strategy and steering within the company, and lays a focus on the targeted development of future-oriented fields." Details of major changes: Reorganization of the North America region / Successor Prof. Vahland The Supervisory Board decided on the reorganization of the Group's activities in North America. The markets in the USA, Mexico, and Canada will be combined and significantly strengthened to form a new North America region. Effective November 1, the Group's activities in the region will be led by Prof. Dr. Winfried Vahland (58), formerly Chairman of the Board of Directors at Škoda, who in this new role becomes a member of the Volkswagen brand Board of Management. Prof. Vahland's successor as Chairman of the Board of Directors at Škoda will be Bernhard Maier (55), until now Board Member for Sales and Marketing of Porsche AG. Michael Horn (52) remains President and CEO of Volkswagen Group of America. Porsche brand group with Bentley and Bugatti At Group level the management structure will be oriented even more systematically to the modular toolkits. These toolkits feature standardized technical components for each automotive vehicle segment (volume, premium, sport and commercial vehicles). Consequently, a Porsche brand group with Bentley and Bugatti will be established for the sportscar and mid-engine toolkit. The toolkit strategy will come under the even closer guidance of the Group CEO; a separate department will be set up for this purpose. The Audi brand group with Lamborghini and Ducati will be continued as will the Truck Holding, and the Power Engineering and Financial Services business lines. The volume brands Volkswagen (with principal responsibility for the modular transverse toolkit), SEAT, and Škoda will be represented by one member each in the Group Board of Management. New Group functions for efficiency and future-oriented fields Group functions will concentrate more closely on efficiency and future-oriented fields; organizational units, for example for Group product strategy, new business fields, cooperations and holdings, connected car activities, and CO2 steering, will therefore be set up. According to Huber, "new, strong Group functions, such as for standardization and harmonized production processes, will lay the timely foundations for efficient decision-making. We will become faster and more agile." Furthermore, a Chief Technology Officer will analyze and, if necessary, co-steer technical developments throughout the Group as mandated by the Group Board of Management. Upgrading of brands and regions At the same time, existing corporate bodies, structures and processes will be streamlined at Group level, in particular by strengthening the brands and regional accountability. To that end the Volkswagen brand will introduce a management structure with four regions, each led by a local CEO with a direct reporting line to the brand Chairman, Herbert Diess. Streamlining the Group Board of Management The production department at Group level, until now led by Thomas Ulbrich in an interim capacity, will be abolished with immediate effect. This is one consequence of delegating responsibility to the brands and regions. Berthold Huber commented: "Going forward, the brands and regions will also have greater independence with regard to production. So it follows that they should also hold the responsibility for these activities." The interim Supervisory Board Chairman emphasized that "one key point is that we are scaling back complexity in the Group. In recent weeks, we have already undertaken important steps such as separating Group and brand functions." He said the developments of the last few days had underscored the urgency of this project: "We will not lose any time. The new management model will be implemented at the beginning of 2016." This would bring the Board greater freedom to address urgent issues concerning Group strategy, development and steering. Further Board of Management changes The Supervisory Board extended the contract with Francisco Javier Garcia Sanz (58), Member of the Board of Management of Volkswagen Aktiengesellschaft with responsibility for Procurement, by five years. Christian Klingler (47), member of the Board of Management of Volkswagen Aktiengesellschaft with responsibility for Sales and Marketing and member of the Volkswagen brand Board of Management with responsibility for Sales and Marketing, is leaving the company with immediate effect as part of long-term planned structural changes and as a result of differences with regard to business strategy. This is not related to recent events. The new CEO Matthias Müller will head the Sales department at Group level in an interim capacity until further notice. Jürgen Stackmann (54), previously Chairman of SEAT, will take over Christian Klingler's function as a member of the Volkswagen brand Board of Management. Stackmann is succeeded by Luca de Meo (48), currently Audi AG Board of Management member for Sales and Marketing. These personnel changes become effective from October 1.
  19. It seems Volkswagen's Supervisory Board is keeping true to their promise holding more people accountable in the company's diesel crisis. Reuters (via Automotive News) and German publication Bild are reporting that three executives will be dismissed. The three are, Michael Horn, Volkswagen U.S. CEO Ulrich Hackenberg, Audi's r&d Boss Wolfgang Hatz, Porsche's engine chief Porsche and Volkswagen in Germany declined to comment, while Audi couldn't be reached. A spokeswoman for Volkswagen of America declined to comment as well, but called the reports of Horn's exit 'speculation'. Now if the reports are true, there will be one party not happy with the decision; Volkswagen's dealers in the U.S. Horn has earned the support of many dealers in the U.S. “We as a dealer body would be in a disagreement with a leadership change at this critical time in the U.S. market,” said Alan Brown, chairman of Volkswagen’s national dealer council. As for who will likely become the next CEO of Volkwagen, Reuters is reporting that Porsche CEO Matthias Mueller will get the nod. A source tells the news service that Mueller has the backing of the majority of Volkswagen's Supervisory Board. Source: Automotive News (Subscription Required), Bild, Reuters
  20. After an emergency meeting held today, Volkswagen CEO Martin Winterkorn announced his resignation amid allegations that the automaker manipulated their diesel vehicles to meet emissions regulations around the world. "As CEO I accept responsibility for the irregularities that have been found in diesel engines and have therefore requested the Supervisory Board to agree on terminating my function as CEO of the Volkswagen Group. I am doing this in the interests of the company even though I am not aware of any wrongdoing on my part," said Winterkorn in a statement. "Volkswagen needs a fresh start - also in terms of personnel. I am clearing the way for this fresh start with my resignation." Since the announcement of Volkswagen's illegal software, the company had lost more than $26 billion in value over the last two days in the stock market. In a statement released by Volkswagen's Supervisory Board, a successor to Winterkorn will be considered at a meeting this Friday. The board also says in their statement that more people could be facing serious trouble in light of this scandal. Source: Volkswagen Press Release is on Page 2 Statement by Prof. Dr. Winterkorn "I am shocked by the events of the past few days. Above all, I am stunned that misconduct on such a scale was possible in the Volkswagen Group. As CEO I accept responsibility for the irregularities that have been found in diesel engines and have therefore requested the Supervisory Board to agree on terminating my function as CEO of the Volkswagen Group. I am doing this in the interests of the company even though I am not aware of any wrong doing on my part. Volkswagen needs a fresh start – also in terms of personnel. I am clearing the way for this fresh start with my resignation. I have always been driven by my desire to serve this company, especially our customers and employees. Volkswagen has been, is and will always be my life. The process of clarification and transparency must continue. This is the only way to win back trust. I am convinced that the Volkswagen Group and its team will overcome this grave crisis." Statement from the Executive Committee of Volkswagen AG's Supervisory Board In a meeting on Wednesday, September 23, the Executive Committee of the Supervisory Board of Volkswagen AG discussed in detail the manipulation of emissions data of Volkswagen Group diesel engines and came to the following conclusions: The Executive Committee takes this matter extremely seriously. The Executive Committee recognizes not only the economic damage caused, but also the loss of trust among many customers worldwide. The Executive Committee agrees that these incidents need to be clarified with great conviction and that mistakes are corrected. At the same time, the Executive Committee is adamant that it will take the necessary decisive steps to ensure a credible new beginning. The Executive Committee has great respect for Chairman Professor Dr. Winterkorn's offer to resign his position and to ask that his employment agreement be terminated. The Executive Committee notes that Professor Dr. Winterkorn had no knowledge of the manipulation of emissions data. The Executive Committee has tremendous respect for his willingness to nevertheless assume responsibility and, in so doing, to send a strong signal both internally and externally. Dr. Winterkorn has made invaluable contributions to Volkswagen. The company's rise to global company is inextricably linked to his name. The Executive Committee thanks Dr. Winterkorn for towering contributions in the past decades and for his willingness to take responsibility in this criticall phase for the company. This attitude is illustrious. Recommendations for new personnel will be presented at the upcoming meeting of the Supervisory Board this Friday. The Executive Committee is expecting further personnel consequences in the next days. The internal Group investigations are continuing at a high tempo. All participants in these proceedings that has resulted in unmeasurable harm for Volkswagen, will be subject to the full consequences. The Executive Committee have decided that the company will voluntarily submit a complaint to the State Prosecutors' office in Brunswick. In the view of the Executive Committee criminal proceedings may be relevant due to the irregularities. The investigations of the State Prosecutor will be supported in all form from the side of Volkswagen. The Executive Committee proposes that the Supervisory Board of Volkswagen AG create a special committee, under whose leadership further clarifying steps will follow, including the preparation of the necessary consequences. In this regard, the Special Committee would make use of external advice. Further details about this will be decided at the Supervisory Board meeting on Friday. The Executive Committee is aware that coming to terms with the crisis of trust will be a long term task that requires a high degree of consistency and thoroughness. The Executive Committee will work on these tasks together with the employees and the Management Board. Volkswagen is a magnificent company that depends on the efforts of hundreds of thousands of people. We consider it our task that this company regains the trust of our customers in every respect.
  21. Another day and more bad news for Volkswagen and their diesel engines. Let's begin with the latest. Automotive News is reporting that about 11 million Volkswagen vehicles equipped with diesel engines worldwide have the illegal software. Also, Volkswagen is planning to set aside 6.5 billion Euros ($7.3 billion) in the third quarter to cover the costs of addressing the issue. Volkswagen says the amount could change as the investigation continues. Also, France, Germany, Italy, and South Korea have announced today they will open investigations to see if Volkswagen rigged vehicles to pass their emission tests. The Detroit News has learned the EPA will be expanding their Volkswagen diesel investigation to the 3.0L V6 diesel engine used in a number of Audi vehicles, Porsche Cayenne, and Volkswagen Touareg. This engine was certified for 2016, but in light of the mess with the 2.0L diesel-four, the EPA wants to check the V6. They were certified well before we knew what we know now,” said Christopher Grundler, director of the EPA’s Office of Transportation and Air Quality. Bloomberg has learned from sources that the U.S. Department of Justice has opened a criminal investigation into Volkswagen after the German automaker admitted it had cheated on the EPA tests. This comes days after the Department of Justice announced a $900 Million fine for GM on the ignition switch mess. When asked about the investigation into Volkswagen, Justice Department spokesman Wyn Hornbuckle declined to comment. Next is a report from the Detroit Free Press that says the U.S. Congress' Oversight and Investigations Subcommittee will be holding a hearing into Volkswagen's emission standard violations. “Strong emissions standards are in place for the benefit of public health. We will follow the facts. We are ... concerned that auto consumers may have been deceived — that what they were purchasing did not come as advertised," said U.S. Rep. Fred Upton, R-Mi and Tim Murphy, R-Pa., said in a joint statement. A date hasn't been set for the hearing, but the statement does say it will happen in the new few weeks. Finally, we might have an answer as to how Volkswagen gamed the system in the EPA tests. Consumer Reports explained that the vehicles had two modes; "Dyno” and “On Road”. These modes are necessary as testing is done dynos and could cause the stability and traction controls to turn on. Once the testing is done and the vehicle is turned out, the vehicle goes back to the On Road mode. Somehow, Volkswagen's 'Dyno' mode was programmed to cut emissions. Source: Automotive News (Subscription Required), Detroit News, Bloomberg, Detroit Free Press, Consumer Reports
  22. In light of the announcement made by the EPA on Friday about certain Volkswagen vehicles equipped with the diesel engine violating emission standards, the German automaker has been at work on damage control. The Detroit News reported on Saturday that the company had pulled all of their ads and videos promoting the diesel engines on their YouTube page and asked dealers to put a stop-sale on Beetle, Jetta, and Passat models equipped with TDI engines. No word on how many vehicles are affected by this. Yesterday, Volkswagen CEO Martin Winterkorn issued a statement apologizing for violating emission standards in the U.S. and said the company would launch an internal investigation. The Board of Management at Volkswagen AG takes these findings very seriously. I personally am deeply sorry that we have broken the trust of our customers and the public. We will cooperate fully with the responsible agencies, with transparency and urgency, to clearly, openly, and completely establish all of the facts of this case. Volkswagen has ordered an external investigation of this matter," said Winterkorn. Source: The Detroit News, USA Today, Volkswagen Press Release is on Page 2 STATEMENT OF PROF. DR. MARTIN WINTERKORN, CEO OF VOLKSWAGEN AG Wolfsburg, September 20, 2015 – The U.S. Environmental Protection Agency and the California Air Resources Board (EPA and CARB) revealed their findings that while testing diesel cars of the Volkswagen Group they have detected manipulations thatviolate American environmental standards. The Board of Management at Volkswagen AG takes these findings very seriously. I personally am deeply sorry that we have broken the trust of our customers and the public. We will cooperate fully with the responsible agencies, with transparency and urgency, to clearly, openly, and completely establish all of the facts of this case. Volkswagen has ordered an external investigation of this matter. We do not and will not tolerate violations of any kind of our internal rules or of the law. The trust of our customers and the public is and continues to be our most important asset. We at Volkswagen will do everything that must be done in order to re-establish the trust that so many people have placed in us, and we will do everything necessary in order to reverse the damage this has caused. This matter has first priority for me, personally, and for our entire Board of Management.
  23. This afternoon, the Environmental Protection Agency (EPA) issued a notice of violation to Volkswagen for skirting clean-air rules on some of their TDI models. The EPA says certain Volkswagen and Audi diesel models from 2009 to 2015 model years had special emission control software that could detect when a car is undergoing EPA emissions testing and turns on the full emissions controls. The software would turn off the controls during real-world driving. This allowed Volkswagen not to equip urea injection and/or more complex emission-control systems onto some of their vehicles. “These violations are very serious, not only because illegal defeat devices results in excess emissions many times the allowable standard, but also because VW was concealing the facts from EPA, the state of California and consumers. We expected better from VW,” said Cynthia Giles, assistant administrator for the EPA’s Office of Enforcement and Compliance Assurance in a conference call. Federal officials say they were notified about the difference in emission levels after researchers at West Virginia University started questioning the emission levels on Volkwagen's diesel models. From there, the EPA and California Air Resources Board opened an investigation. “In September, after EPA and CARB demanded an explanation for the identified emission problems, Volkswagen admitted that the cars contained defeat devices,” the EPA said in a statement. The models in question include, 2009 – 2015 Audi A3 TDI 2009 – 2015 Volkswagen Beetle TDI 2009 – 2015 Volkswagen Golf TDI 2009 – 2015 Volkswagen Jetta TDI 2014 – 2015 Volkswagen Passat TDI Now the EPA is asking Volkswagen to recall the affected vehicles, though they do note that the vehicles are safe to drive. The EPA hasn't ordered any fines at this time, as the investigation is still ongoing. Federal law allows the EPA to levy a maximum fine of $37,500 per vehicle. With around 482,000 vehicles with the illegal software, Volkswagen could be looking at a maximum fine of $18 billion dollars. "VW is cooperating with the investigation; we are unable to comment further at this time," the company said in a statement. Source: Automotive News (Subscription Required), Green Car Reports, EPA Press Release is on Page 2 EPA, California Notify Volkswagen of Clean Air Act Violations Release Date: 09/18/2015 Contact Information: press@epa.gov Carmaker allegedly used software that circumvents emissions testing for certain air pollutants Washington - Today, EPA is issuing a notice of violation (NOV) of the Clean Air Act (CAA) to Volkswagen AG, Audi AG, and Volkswagen Group of America, Inc. (collectively referred to as Volkswagen). The NOV alleges that four-cylinder Volkswagen and Audi diesel cars from model years 2009-2015 include software that circumvents EPA emissions standards for certain air pollutants. California is separately issuing an In-Use Compliance letter to Volkswagen, and EPA and the California Air Resources Board (CARB) have both initiated investigations based on Volkswagen’s alleged actions. “Using a defeat device in cars to evade clean air standards is illegal and a threat to public health,” said Cynthia Giles, Assistant Administrator for the Office of Enforcement and Compliance Assurance. “Working closely with the California Air Resources Board, EPA is committed to making sure that all automakers play by the same rules. EPA will continue to investigate these very serious matters.” “Working with US EPA we are taking this important step to protect public health thanks to the dogged investigations by our laboratory scientists and staff,” said Air Resources Board Executive Officer Richard Corey. “Our goal now is to ensure that the affected cars are brought into compliance, to dig more deeply into the extent and implications of Volkswagen’s efforts to cheat on clean air rules, and to take appropriate further action.” As described in the NOV, a sophisticated software algorithm on certain Volkswagen vehicles detects when the car is undergoing official emissions testing, and turns full emissions controls on only during the test. The effectiveness of these vehicles’ pollution emissions control devices is greatly reduced during all normal driving situations. This results in cars that meet emissions standards in the laboratory or testing station, but during normal operation, emit nitrogen oxides, or NOx, at up to 40 times the standard. The software produced by Volkswagen is a “defeat device,” as defined by the Clean Air Act. The Clean Air Act requires vehicle manufacturers to certify to EPA that their products will meet applicable federal emission standards to control air pollution, and every vehicle sold in the U.S. must be covered by an EPA-issued certificate of conformity. Motor vehicles equipped with defeat devices, which reduce the effectiveness of the emission control system during normal driving conditions, cannot be certified. By making and selling vehicles with defeat devices that allowed for higher levels of air emissions than were certified to EPA, Volkswagen violated two important provisions of the Clean Air Act. EPA and CARB uncovered the defeat device software after independent analysis by researchers at West Virginia University, working with the International Council on Clean Transportation, a non-governmental organization, raised questions about emissions levels, and the agencies began further investigations into the issue. In September, after EPA and CARB demanded an explanation for the identified emission problems, Volkswagen admitted that the cars contained defeat devices. NOx pollution contributes to nitrogen dioxide, ground-level ozone, and fine particulate matter. Exposure to these pollutants has been linked with a range of serious health effects, including increased asthma attacks and other respiratory illnesses that can be serious enough to send people to the hospital. Exposure to ozone and particulate matter have also been associated with premature death due to respiratory-related or cardiovascular-related effects. Children, the elderly, and people with pre-existing respiratory disease are particularly at risk for health effects of these pollutants. VW may be liable for civil penalties and injunctive relief for the violations alleged in the NOV. The allegations cover roughly 482,000 diesel passenger cars sold in the United States since 2008. Affected diesel models include: Jetta (Model Years 2009 – 2015) Beetle (Model Years 2009 – 2015) Audi A3 (Model Years 2009 – 2015) Golf (Model Years 2009 – 2015) Passat (Model Years 2014-2015) It is incumbent upon Volkswagen to initiate the process that will fix the cars’ emissions systems. Car owners should know that although these vehicles have emissions exceeding standards, these violations do not present a safety hazard and the cars remain legal to drive and resell. Owners of cars of these models and years do not need to take any action at this time.
  24. More bad news for Volkswagen this week. Speaking with German publication Wirtschaftswoche, California Air Resources Board's (CARB) chair Mary Nichols said in their testing, only Volkswagen TDI models were found to have cheating devices. "So far we have found in vehicles of other brands no fraudulent shutdown. This does not mean that all emissions are as we would wish. But there is nothing that comes close to the magnitude of the excess in VW vehicles," Nichols said CARB will continue testing diesel vehicles. Meanwhile, Automotive News reports that Volkswagen has halted production of 2016 Passat TDI models at its Chattanooga, TN plant. No word on production was ended as a spokesman tells AN that he only learned about it today, but it's safe to assume it had to be some after the company withdrew its application for EPA certification on 2016 models equipped with the 2.0 TDI. Automotive News says Volkswagen continued production of the Passat TDI even after the EPA announcement that the 2.0 TDI was found to cheat back in September. Source: Automotive News (Subscription Required), Wirtschaftswoche, Reuters View full article
  25. A number of Volkswagen engineers have admitted that they manipulated CO2 emission data to meet ambitious goals to meet goals set by former Chief Executive Martin Winterkorn. German newspaper Bild am Sonntag (via Reuters) reports that engineers filled tires with more air and mixed diesel with their motor oil to make them use less fuel. This reportedly began after then-CEO Martin Winterkorn's announcement at the 2012 Geneva Motor Show that by 2015, the company would cut CO2 emission levels by 30 percent. Engineers at the time were afraid to tell the CEO that this goal was impossible and decided to cheat. "Employees have indicated in an internal investigation that there were irregularities in ascertaining fuel consumption data. How this happened is subject to ongoing proceedings," a Volkswagen spokesman told Reuters. This report comes to light as Volkswagen announced last week that 800,000 vehicles in Europe - mostly diesel - were underreported for fuel consumption and carbon dioxide emissions. Source: Bild am Sonntag via Reuters, New York Times View full article

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