Some management experts put the blame partly on ambitious, top-down corporate structures.
Advertisement
VW is probably under no illusion that the €16.2 billion it has just set aside will be enough to pay for all the fines and claims that are piling up.
The settlement was negotiated by several parties including VW, the U.S. Department of Justice, the U.S. EPA, and lawyers advocating on behalf of affected VW owners.
Now, after yesterday’s announcement that VW would be buying back cars, canceling leases, fixing vehicles and compensating all owners, the Germans have had to make a small edit to their Make This Go Away fund.
VW already has admitted to programming diesel cars so they pass USA emissions tests in labs but spew illegal amounts of pollution on real roads. The company now says the probe conducted by US law firm Jones Day could be completed by year end.
The minister also said European regulations need to be clarified to prevent current loopholes in the current framework on emissions testing.
But the money could be paid out three years later in 2018, depending on the subsequent performance of the group’s shares, said state premier Stephan Weil, who sits on VW’s supervisory board.
Any U.S. settlement could influence what happens in Europe and in other countries, he said.
German auto manufacturers will recall 630,000 Porsche, Volkswagen Opel, Audi and Mercedes vehicles to fix diesel emissions management software, a German government official said on Friday, widening a clampdown on pollution in the wake of the Volkswagen scandal.
Government sources have said that Mercedes, Opel and Porsche as well as Volkswagen and Audi would recall some diesel vehicles.
The call for action came as VW more than doubled its estimated bill for the scandal and announced its first loss in 23 years.
The Justice Department and Environmental Protection Agency also are weighing potential criminal charges against the company and senior executives.
The agreement does not settle lawsuits by state and local governments, who also are seeing billions from the company.
The scandal has wiped out more than a quarter of Volkswagen’s stock market value, and cost investors millions.
Volkswagen CEO Matthias Mueller said as he released the headline earnings numbers that the company remains “fundamentally healthy” and that he is “convinced that Volkswagen has what it takes to overcome its challenges”.
Bosses now expect the saga to cost the company around £12.6billion, although some analysts believe the final bill could be significantly higher.
Advertisement
The more than doubling of financial provisions for the diesel emission test manipulation scandal pushed Volkswagen to a pre-tax loss of €1.3 billion (£1 billion) in 2015 – the largest loss in the company history.
