The announcement Friday comes in the wake of its emissions scandal, with new CEO Matthias Mueller saying the company is responding to “uncertain and volatile times”.
Advertisement
As the investigation into the Volkswagen “dieselgate” emissions scandal continues, it seems inevitable that the tentacles of law-enforcers will reach beyond the walls of the German carmaker.
Mueller said more cuts could be announced in the coming weeks but he did not announce any job losses Friday, as a few workers had feared.
The German automaker will cut investments by one billion euros ($1.1 billion), or about 8%, to 12 billion euros.
Among other things, [Mueller] said Volkswagen would postpone the building of a new design center in Wolfsburg and the introduction of an all-electric Phaeton sedan, and review other projects.
The company has been battered by the discovery that millions of VW diesel vehicles were sold with “defeat devices” secretly installed – software that allowed the auto to determine when an emissions test was being performed, and reduce performance and emissions to cheat the test.
It has already set aside 6.7 billion euros ($7.4 billion) to cover the costs of recalling those vehicles but experts say the total cost including fines could be much more.
CARB and the U.S. Environmental Protection Agency must approve Volkswagen’s remedies before any recall can start. But the chemical treatment, while saving acceleration and mileage, needs a clumsy storage tank and multiple hardware changes to work.
Separately, U.S. Senators Ed Markey of MA and Richard Blumenthal of CT on Thursday released a letter calling on the automaker to buy back diesel vehicles that don’t meet pollution standards. Volkswagen was supposed to come up with a plan to fix the diesel cars.
Advertisement
The vehicles affected by the inconsistencies in carbon dioxide emissions include the diesel variants of Volkswagen’s Polo, Golf and Passat models, as well as the subcompact A1 and the A3 hatchbacks of the Audi premium brand, Skoda Octavia, Seat Ibiza and Seat Leon.
