Ulrich Hackenberg, who was head of Audi’s R&D operations, and responsible for a wide range of operations at the parent company has resigned.
One of the reasons Volkswagen is now the world’s second-largest automaker is the broad array of brands and divisions it operates. But a new report warns the empire could be at risk of coming undone in the wake of the maker’s ongoing scandal over diesel emissions testing.
To help secure a $21 billion credit line that may be needed to help cover fines and other costs, Volkswagen AG has pledged it will, if necessary, sell off some of its assets, according to a report by the Reuters news service, which quotes “two people familiar with the matter.”
Separately, the scandal continues to shake up senior management at the carmaker. Its Audi brand has named a new chairman, while the former Audi R&D chief has resigned after being suspended for his suspected role in the subterfuge.
In September, the U.S. Environmental Protection Agency accused Volkswagen of installing a so-called “defeat device” on 482,000 vehicles sold in the U.S. so it could pass diesel emissions tests. Otherwise, those models would produce up to 40 times the allowable level of smog-causing oxides of nitrogen. VW officials shortly after acknowledged installing the suspect software in 11 million vehicles sold worldwide.
And after initially denying an additional charge by the EPA, VW has since admitted cheating on emissions with its bigger 3.0-liter diesel, as well as the smaller 2.0-liter TDI engine.
(Reality setting for Volkswagen sales and it’s not looking very good. For more, Click Here.)
The scandal has seen criminal investigations launched in the United States and Germany, while federal judges in the U.S. are this week deciding how to handle at least 350 civil lawsuits filed against the maker. Meanwhile, VW could face more than $18 billion in penalties just for violating the Clean Air Act here, and more fines abroad.
While the final price tag could take a year or more to determine – industry analysts have suggested numbers ranging from $10 billion to more than $50 billion – VW has set aside more than $7 billion and this week lined up a 20 billion euro bridge loan from 13 European banks.
According to the Reuters’ report, VW pledged to sell or list an equal amount of assets should it find itself unable to cover the cost of the one-year credit line. The maker has not yet responded to a request for comment from TheDetroitBureau.com.
What assets could be on the line remains unclear, and it’s unlikely key operations such as the Audi division would be immediately at risk. Some suggest VW could first turn to smaller units, such as non-truck parts operations at the MAN division.
All together, VW now operates more than a dozen different automotive and truck brands, from entry-level Seat and Skoda to super-premium Bentley, Bugatti and Lamborghini. Together, they are expected to generate sales of more than 10 million passenger cars and light trucks worldwide this year, making VWAG second only to Toyota in total volume.
(For more on Volkswagen’s planned spending cuts, Click Here.)
While VW’s financial situation is shaky right now, the company is also dealing with some serious personnel issues, a number of senior managers hit by the scandal. Martin Winterkorn was forced out in late September as chairman of the parent company and subsequently resigned a number of other assignments, including his post as chairman of Audi.
Matthias Mueller, who took Winterkorn’s place as corporate chief executive now takes the empty Audi spot, too.
Meanwhile, Ulrich Hackenberg, who was head of Audi’s R&D operations, and responsible for a wide range of operations at the parent company, as well, has resigned. Hackenberg had been suspended shortly after the diesel emissions scandal broke.
He will be replaced as Audi research chief by Stefan Knirsch, head of engine operations.
While VW – the brand – has been hard hit by the diesel scandal, U.S. sales plunging last month – Audi has largely escaped any public impact. But it uses both of the suspect engines in several models, including the little A3 TDI and the big Q5 TDI.
(For more on the move to consolidate the many VW lawsuits, Click Here.)
It has been running its own investigation into the software subterfuge, Audi Deputy Chairman Berthold Huber today saying “the investigation is making progress,” adding that this “is a necessary and good sign.”
Maybe: someone did this so china can buy it . iot can really happen, just something 2 think about. ??? Thank You.
This is just an opportunity for Obama and the EPA to try and deter U.S. consumers from buying practical clean diesels like the rest of the world embraces. Thankfully most U.S. consumers are smart enough to know that the U.S. is one of the few places on earth where clean diesel powered vehicles are politically chastised to promote impractical, over-priced EVs.
It should be interesting to see how the EU reacts to the EPA’s unreasonable attack on VW over a trivial emissions violation. So far no executive level management have been implicated by the two independent investigation teams who have indicated that between 10-30 total people appear involved at this time on the EA 189 series four cyl. diesel engine improper software.
When comparing the trivial VW exhaust emissions scandal to GM’s defective ignition switch and reported mid-level management cover-up, the VW scandal hardly justifies billion dollar fines nor the collateral damage to VW employees, car owners, investors and all suppliers to VW who have been financially damaged as a result of the EPA making more out of this issue than is justified. In Europe authorities have mandated a 2.4 million EA 189 diesel engine powered car recall to update the improper software and correct the minor excess exhaust emissions. No threats of fines or destroying VW over the minor emissions issues have been made.
I suspect the EPA is going to be dealing with class action and individual lawsuits for as long or longer than VW, especially over the unsubstantiated VW 3.0L V6 diesel engine allegations and the EPA’s failure to recognize a std. industry CAT cleaning cycle. This will prove to be an interesting conundrum considering the German motor authority did an extensive investigation of the VW/Audi/Porsche 3.0L V6 diesel engine and found no defeat device or illegal software, contrary to what the EPA has alleged even after VW investigated and advise the EPA there was no software violations or defeat device on the 3.0L V6 diesel engines. In fact the EPA is likely to mandate that all diesel engine makers employ the same smart use of the CAT cleaning cycle starting in ’18 that VW/Audi/Porsche currently use on the 3.0L V6 diesel engines, because it lowers emissions on cold start up which is when diesels emit the most exhaust pollution which is minutely low to begin with.