VW ‘rigged tests on 2.8m cars in Germany’
VW ‘rigged tests on 2.8m cars in Germany’
His comments, pointing to cheating on a bigger scale than previously thought, deepened the crisis at the world’s largest automaker
Volkswagen has named Matthias Mueller, head of its luxury sports car brand Porsche, as its new CEO tasked with steering it out of the wreckage of a pollution test rigging scandal.
Mueller, 62, will take over immediately, replacing Martin Winterkorn who stepped down two days earlier, said the head of the supervisory board, Berthold Huber, at the car maker’s headquarters in Wolfsburg, northern Germany.
“My most pressing task will be to restore confidence in the Volkswagen Group — through an unsparing investigation and maximum transparency, but also by drawing the right lessons from the current situation,” Mueller vowed.
“Volkswagen under my leadership will make every effort to develop the most rigorous compliance and governance standards in the entire industry and to implement them.”
Huber praised Mueller as “a figure with great strategic, entrepreneurial and social skills.”
“He knows the company and its brands, will tackle his new position immediately and with full force. We explicitly appreciate his critical and constructive views.”
Shares in the German company, which had started to steady after sharp falls earlier this week, were down 4.5 percent at 1335 GMT after Bloomberg also reported that executives in Germany controlled aspects of the manipulated US tests, citing three people familiar with the US business.
Volkswagen is under heavy pressure to show it can get to grips with the biggest business-related scandal in its 78-year history.
Mueller, 62, would represent part of the fresh start that Winterkorn said was needed when he stepped down.
Volkswagen shares have plunged as much as 40 percent, wiping tens of billions of euros off its market value, since US regulators said last Friday it had admitted to programming diesel cars to detect when they were being tested and alter the running of their engines to conceal their true emissions.
The scandal keeps growing. German transport minister Alexander Dobrindt said on Thursday Volkswagen had also cheated tests in Europe, where its sales are much higher, and on Friday put the number of affected vehicles in Germany at 2.8 million.
Regulators and prosecutors across the world are investigating the scandal.
The wider car market has been rocked, with manufacturers fearing a drop in sales of diesel cars and tighter regulations, while customers and motor dealers are furious that Volkswagen has yet to say whether it will have to recall any cars.
“VW needs to be very open about what has happened, how it was possible that this could happen to make sure that this never happens again in the future,” said a leading Volkswagen shareholder, underlining the importance of the board meeting.
“These are priorities that should override all other considerations at the moment.”
The task facing Mueller, if his selection is confirmed, is huge. The company said on Tuesday 11 million vehicles worldwide were fitted with the software that allowed it to cheat US tests, while adding it was not turned on in the bulk of them.
Analysts hope that on Friday it may at last say which models and construction years are affected, and whether cars will need to be refitted.
They also expect it to announce a full investigation of the scandal, with German newspaper Handelsblatt saying it planned to hire US law firm Jones Day to lead a no holds barred inquiry, and to give the outlines of a new management structure likely to be less centralized, but with a clearer system of checks.
TOUGH TIMES AHEAD
Volkswagen has long been seen as a symbol of German industrial prowess and the auto industry is one of the country’s major employers and a key source of export revenue.
Earlier this month, Volkswagen delivered a presentation to investors at the annual Frankfurt motor show entitled “Stability in Volatile Times.” Now Chancellor Angela Merkel is urging it to act quickly to restore confidence in the Volkswagen name.
Frank Schellenberg, a taxi driver in Wolfsburg where the carmaker employs around 70,000 people, said locals felt betrayed and feared the worst.
“They have lost any contact with the real world, the customers who have been buying their cars in good faith,” he said, pointing to the firm’s 13-story administrative building. “Everyone in Wolfsburg is expecting tough times and job cuts.”
Half a dozen Greenpeace protesters were outside Volkswagen’s Wolfsburg plant on Friday, waving banners saying “No more lies!” in front of three diesel-engine VW Golf hatchbacks.
Evercore ISI analyst Arndt Ellinghorst said he would welcome the appointment of Mueller, a former head of product strategy and close to the Piech-Porsche family that controls Volkswagen.
But Bernstein’s Max Warburton questioned whether a man who has spent more than three decades at the company was the right man to signal a break with the past. He favors Herbert Diess, a former research and development chief of rival BMW who was hired to run the VW brand in December.
“VW needs to think big and bold,” Warburton said, urging the new CEO to offer to buy back and scrap almost 500,000 diesel cars sold in the US, which would cost about $6 billion, as well as suspend the 100 engineers most closely associated with the affected engines and software.
Another top Volkswagen shareholder said it would have been better for Winterkorn to sort out the crisis before handing over to a successor, pointing to how oil company BP managed its recovery from the 2010 Gulf of Mexico oil spill.
“I would have preferred Winterkorn to have stuck around for another month or so, through the worst of the storm, then the company appoint another CEO.”
Environmentalists have long complained that carmakers game the vehicle testing regime to exaggerate the fuel-efficiency and emissions readings of their vehicles.
The International Council on Clean Transportation, one of the research groups that helped uncover Volkswagen’s deception, has published new data showing carbon dioxide emissions in European road tests were on average 40 percent higher than the laboratory results advertised in car sales literature.
European politicians on Wednesday voted to speed up a tightening of testing rules.
UAE, Saudi Arabia optimistic world trading system can be restored, says survey
- Three quarters of respondents hopeful of 'working order'
- Trade disputes cloud horizon in emerging markets
LONDON: More than three-quarters of respondents in the UAE and Saudi Arabia said that the troubled global trading system can be restored to “working order,” according to a survey.
Only 27 percent thought the system would be restored ‘soon’, while 49 percent said it would be a more ‘long-term’ recovery, the Bloomberg research published on Oct. 22 found.
More than half of those surveyed in the two Gulf countries were optimistic that trade will grow in the next five years, with only 26 percent saying there would be less trade over that time period.
The survey findings come just days after the director-general of the World Trade Organization, Roberto Azevedo, urged action to be taken to avoid “serious harm” to the global trading system, in a speech in London on Oct. 17.
A continuing trade dispute between China and the US has led to the two countries imposing a series of tariffs on various imports.
The survey found that 65 percent of Saudi and UAE respondents said they were learning about new technologies to prepare for the future economy, while a similar proportion were learning new skills and taking professional courses.
Global governance issues were viewed as the most critical issue challenging the future of trade, according to the respondents.
The global survey also found there was a divide in opinion between business leaders in the emerging markets and those in developed countries.
Almost two-thirds (63 percent) of emerging market business professionals said they believe there would be more trade in five years, compared to just 36 percent in developed markets that felt the same way.
“The survey reveals vast differences in perceptions for the future and highlights the need to bring together global leaders in business and government to find private-sector led solutions to some of the world’s biggest challenges,” said Justin B. Smith, chief executive officer, Bloomberg Media Group.