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VW to Launch Vehicle Recall in 2016 following Emissions Scandal

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A massive recall of Volkswagen’s diesel vehicles will begin in January, following the EPA’s accusations that the automaker used illegal software to cheat emissions tests. Volkswagen could face criminal prosecution and $18 billion in fines for deceiving regulators. VW’s CEO Matthias Müller, who has taken over after Martin Winterkorn resigned in late September, says that “very few employees were involved” in the scandal. Results of an internal investigation are expected to be released in several weeks.

Although it might only be caused by a few employees, the problem is widespread. The emissions issue affects as many as 11 million vehicles. Fixing the defect won’t be an easy task; the engine was used in several models with country-specific variations, so thousands of solutions will be needed. The good news is that most cars will be fixed with a relatively painless software, although others will need new fuel injection equipment and catalytic converters.

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On Thursday, Michael Horn, CEO of Volkswagen of America, will testify before a congressional hearing about whether VW intentionally installed software that made diesel vehicles appear “cleaner” during emissions tests than they are in real life driving situations. No matter what the penalties, VW executives are preparing for the company to take a big financial hit. Müller spoke to 20,000 factory workers at the company’s main facility in Wolfsburg on Tuesday, warning them that all planned investments are under review. While VW was planning to invest billions of dollars in new factories as well as electric and connected vehicle technologies, Müller now says that “what isn’t essential will be scrapped or postponed.”

Source: Wall Street Journal |Photo by xddorox

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