Daily Management Review

Internal Investigations Reveal Only Small Group Responsible for Emissions Scandal at Volkswagen


Internal Investigations Reveal Only Small Group Responsible for Emissions Scandal at Volkswagen
Volkswagen claimed that no high ranking official of the company – including the board members, were responsible for cheating U.S. diesel emissions tests.
The German car manufacturer said this on Thursday stating that only a small group of employees were responsible for the incident that has been identified as the biggest business crisis in the firm's history.
The scandal was the result of a "chain of errors" and it would take months to say which individuals were to blame even as the investigations into the affair were going well, said company Chairman Hans Dieter Poetsch.
In order to improve oversight of engine-software development to avoid any future emissions test manipulations, the company has announced measures, the company informed.
To enable the company to start to recall affected cars there, Volkswagen hopes to reach agreement with U.S. environmental authorities in the next few days or weeks. Cooperation with those authorities was described as "excellent" by the company.
The Chief Executive Matthias Mueller said that the orders were up by 3.5% even in the face of the scandal and the company was confident the reluctance of buyers after the scandal would dwindle away and customers would return to buy the group's vehicles in the coming weeks.
The company is planning to change the corporate structure by 2017. However Volkswagen representatives made it clear that it was happy with having 12 brands and there were no plans to sell any units of the company to simplify the group structure or raise money.
No provisions have however been made to cover for the legal costs of the scandal.
The CEO said that soon after the Detroit motor show in January, he would start a visit to the US.
"I don't think I will be going down on my knees there ... I will look ahead optimistically and confidently," Mueller said while speaking at a news conference at VW's headquarters in Wolfsburg.
He reiterated that he would however apologize for the situation.
Internal and external investigations of the scandal were launched in September after the Europe's biggest carmaker admitting its deception in the United States.
"No business justifies crossing legal and ethical boundaries. Even though we cannot prevent misconduct by individuals once and for all, in future it will be very difficult to bypass our processes," Poetsch said.
Good progress was being made by the external investigation by U.S. law firm Jones Day, said Poetsch but no conclusion date was yet available.
He said Volkswagen would not name any individuals involved on Thursday but it was likely only a small number of people took part in the deception.
"We are talking here not about a one-off mistake but a chain of errors. Based on what we know today, it was a very limited group which acted irresponsibly," he said.
VW's engine-development unit remained the focus of investigations, Poetsch said.
The company is looking at the scandal as a chance to introduce long-needed structural changes, Mueller said. Six new board members and the top management at seven of VW's 12 brands have been changed at the VW group since the beginning of this year.