Volkswagen to Delay New Model Development, Focus on Diesel Fix
Compact TDI Models Slated for January Recall
According to various sources, Volkswagen AG will be delaying or cancelling non-essential projects to save money and resources for the ongoing 2.0L TDI scandal we call Volkswageddon. Speaking to the company’s employees, VAG CEO Matthias Müller said the company will review all current plans, and those that aren’t immediately vital will be slashed or postponed. Among those plans is Volkswagen’s fullsize three-row SUV and an extended-wheelbase variant of the upcoming Tiguan, both of which would help the company’s sales in the United States. However, given Müller’s statements, it’s now uncertain when or if those vehicles will appear on the market.
With 11 million diesel vehicles to fix, the company’s cashflow is going to be in short supply, even before accounting for fines and penalties imposed by the world’s governmental bodies. According to Bloomberg, Volkswagen labor leaders have been concerned about the effects the diesel scandal will have on the company’s workforce. As such, they have been pushing the company to hamstring its research and development spending to protect jobs. One other solution being pursued is evaluating bonuses doled out to the company’s management board (well, duh). The company’s current finance chief, Hans Dieter Poetsch, said this scandal could send the company into complete ruin.
In the same conversation with employees, Müller also stated that the company would begin its recall of those 11 million emissions-cheating diesel vehicles in January. A representative from the company’s U.S. arm didn’t say if the recall would apply to the 482,000 Volkswagen and Audi diesels in the U.S. that currently run the faulty emissions controls. The Environmental Protection Agency (EPA) must first approve any repair done to America-bound diesels.
In related news, Volkswagen Group of America CEO Michael Horn testified before the House of Representatives Energy and Commerce committe today, admitting that he knew of the emissions issue in 2014. At the time, he said, he was told VW engineers were working with the EPA to secure a solution to the problem, well before it was initially made public last month. Horn also said the company would withdraw its certification applications for 2016 vehicles equipped with the 2.0L TDI engine. The company may resubmit the applications at a later date, so the 2016 Passat, Jetta, Golf, and Beetle may again offer a TDI engine later in the model year.