VW boss Herbert Diess has no plans to resign despite being the target of a criminal investigation in Germany.
Despite being the focus of an ongoing German criminal investigation, Volkswagen brand boss Herbert Diess has no intention of resigning.
The one-time BMW executive is one of at least two current and former senior executives who have been targeted by prosecutors in connection with VW’s diesel emissions scandal. The German authorities previously identified former Volkswagen AG CEO Martin Winterkorn. Both are under investigation for possibly hiding information about the diesel scandal from VW shareholders.
Separately, the German automaker’s current CEO, Matthias Mueller, said there are no plans to offer compensation to diesel owners in Europe, despite last week’s announcement of a nearly $15 billion deal related to VW’s cheating on emissions standards with 475,000 2.0-liter diesel models sold in the U.S.
“We have a different situation here” in Europe, Mueller told the Welt am Sonntag newspaper over the weekend.
About $10 billion of the U.S. settlement will be used to compensate owners and to buy back those diesel vehicles. VW still hopes to find a fix to keep at least some of those models on the road but has so far been unable to come up with a solution that meets regulatory approval.
In Europe and other parts of the world where diesel emissions standards are less demanding, the German maker has already begun making repairs on its 2.0-liter model.
VW hopes to avoid the buyback mandated for 2-liter models like this 2014 Volkswagen Golf TDI.
(VW believes it can repair 85k 3.0-liter diesels. For more, Click Here.)
A separate fix is needed for a 3.0-liter VW diesel engine used in some Volkswagen, Audi and Porsche vehicles. The maker is also working up a separate settlement with U.S. authorities covering those models.
Considering the total number of rigged diesels sold by Volkswagen came to over 11 million – more than half of them in Europe, “You don’t have to be a mathematician to realize that compensation at arbitrarily high levels would overwhelm Volkswagen,” said CEO Mueller.
The maker has been facing demands for a European compensation plan led by Europe’s Industry Commissioner Elzbieta Bienkowska. Mueller said he has expressed his resistance to the idea in a conversation with Bienkowska.
Since the diesel scandal first broke last September – VW quickly acknowledging charges leveled by the U.S. Environmental Protection Agency – a number of senior executives have been forced out of the company. That includes former CEO Winterkorn.
(German authorities investigating role of former VW CEO Winterkorn. Click Here for the latest.)
Nonetheless, the company line has been that the cheating was orchestrated by only a handful of lower-level engineers who couldn’t figure out how to meet VW’s demanding target for a clean, high-mileage diesel engine that also offered better power than similar hybrids.
But authorities on both sides of the Atlantic have yet to accept that position. During a news conference last week detailing the VW settlement, U.S. Deputy Attorney General Sally G. Yates said a criminal investigation is “active and ongoing.” And similar probes are underway elsewhere, notably in Germany.
The latest wrinkle came when German stock market regulators asked prosecutors to look into the possibility VW’s top managers intentionally withheld information about the diesel cheating from shareholders.
Winterkorn was listed by name, but Diess was later identified as the second target of the probe. Despite that cloud, he said he has no intention of stepping down. “It’s not up for debate,” Diess told the Sueddeutsche Zeitung.
(US officials announce the diesel deal with VW. Click Here for more.)
He also said he expects it will take up to 18 months for the automaker to recover from the hit to its image from the diesel scandal.