VW CEO expects dieselgate to be costly and with long term effects

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Volkswagen Group chief Matthias Mueller pointed out the obvious, recently saying that the scandal will have serious financial consequences for the company.

The emissions cheating scheme will have “substantial and painful” financial consequences on Volkswagen, Chief Executive Matthias Mueller told a gathering of workers at the automaker’s headquarter in Wolfsburg. The implications of the diesel scandal will keep Volkswagen busy “for a long time,” he said, adding that the carmaker did not try to hide the manipulation. At the same meeting, VW’s second largest shareholder, Stephan Weil prime minister of Lower Saxony said “we will this year probably every now and then be confronted with unpleasant news related to dieselgate.” Europe’s largest automaker should be able to cope with the fallout of its deceiving actions, said Weil. “The damage will, on balance, not be minor, as much as that can already be said today but Volkswagen luckily has a strong economic substance.” Lower Saxony, which holds 20 percent of VW’s common shares, has “no reason” to alter its commitment to the carmaker, Weil concluded.

The carmaker’s top labor official also stepped in front of the gathering, warning that Volkswagen may have to cut jobs in the United States as well as Europe and other countries depending on how big the fine will be. “Should the future viability of Volkswagen be endangered by an unprecedented financial penalty, this will have dramatic social consequences,” works councils chairman Bernd Osterloh, who also sits on VW’s 20-member supervisory board, said.

Separately, near Wolfsburg, German prosecutors in Brunswick announced they extended their probe on the emissions scandal and are now investigating 17 employees, up from six employees previously. “This is part of the diesel investigation, the number of suspects has risen, although none are from the management board,” one of the prosecutors said.

Via Reuters