Wed | Sep 20, 2017

Personal VW apology to Obama

Published:Sunday | May 1, 2016 | 5:00 AM
US President Barack Obama.
VW head Matthias Mueller.
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FRANKFURT, Germany (AP)

Volkswagen's CEO says he apologised in person to US President Barack Obama for the carmaker's emissions scandal, in which it rigged its cars to cheat on diesel engine pollution tests. CEO Matthias Mueller said he held a "two minute" conversation with the president during his visit to Hannover, Germany, this week.

"I took the opportunity to apologise to him personally for this matter," Mueller said

during the company's annual news conference on Thursday in Wolfsburg, Germany. I also expressed my thanks for the constructive cooperation with his authorities and naturally expressed the hope that I can continue to fulfil my responsibilities for 600,000 workers, their families, the suppliers, the dealers."

The US Environmental Protection Agency (EPA) could levy fines of up to US$18 billion, but analysts think the punishment will not be that drastic. Volkswagen seemed to endorse that view by saying it had set aside €7 billion globally for legal costs from 2015, on top of €7.8 billion (US$8.8 billion) to cover fixes and an offer to buy back some 500,000 defective cars.

Overall, the company deducted €16.2 billion from last year's earnings to cover the costs of the scandal, in which it fitted cars with software that enabled them to pass tests, but then turned emissions controls off during everyday driving.

 

Scandal

 

The scandal broke when the EPA took action against Volkswagen. Some 11 million cars worldwide have turned out to have the software.

Mueller said Thursday that recalling and fixing the cars that were rigged to cheat on the tests "will remain our most important task until the very last vehicle has been put in order."

Analysts say the impact of lower sales could make the final bill much higher than the company's figure.

Volkswagen says it is reporting costs that it knows about at the present time.

The company said last week that it lost €1.5 billion on an after-tax basis, after a profit of €11.1 billion in 2014.

Volkswagen is currently working out a settlement with US authorities in federal court in San Francisco, and has said that would include an offer to buy back as many as 500,000 of the just under 600,000 defective vehicles.

Mueller used the company's annual news conference to also sketch out a plan to focus more on electric vehicles and services like car sharing, as it seeks to get past its emissions scandal.

He stressed that Volkswagen's car business remains "fundamentally sound", but detailed a promised plan to emphasise digital services and zero-emissions vehicles. The company would soon form a legally independent company to promote business in mobility services, which can include things like ride-sharing apps and car sharing, he said.

Mueller said that the company would "make electric cars one of Volkswagen's new hallmarks", with 20 new models by 2020.

Volkswagen had previously emphasised diesel technology, which has suffered a blow since it became clear that Volkswagen engines could not meet US emissions standards without cheating.

The company has admitted using engine software that disabled emissions controls when vehicles were not being tested.

That improved performance and mileage, but meant the vehicles spewed far more than the legal limit of pollutants.