The Volkswagen (VW) Group's new CEO, Matthias Müller, has addressed 20,000 of the company's employees at the headquarters in Wolfsburg, Germany, to outline his plans to resolve the emissions affair. According to a company press release, Müller said that it was key that the company restored the confidence of customers, investors, and the general public. He said, "[A]part from the enormous financial damage which it is still not possible to quantify as of today, this crisis is first and foremost a crisis of confidence. That is because it is about the very core of our company and our identity: it is about our vehicles. Müller also said that the company was reviewing all its planned investments and that anything deemed non-essential was likely to be cut from the programme. The company needs to make wide-ranging savings as it is impossible to accurately quantify the financial cost of the affair to VW. He added, "That is why we have initiated a further critical review of all planned investments. Anything that is not absolutely necessary will be cancelled or postponed. And it is why we will be intensifying the efficiency programme. To be perfectly frank: this will not be a painless process." In an interview with German newspaper Frankfurter Allgemeine Zeitung, Müller also outlined a timescale on the recalls of the EA 189 diesel-powered vehicles involved. He said, "If all goes according to plan, we can start the recall in January. All the cars should be fixed by the end of 2016." For the US market where the situation became highlighted when the US Environmental Protection Agency (EPA) served VW with a notice of violation over the so-called 'defeat device', he said the recall schedule would have to agree with the EPA.
Significance: Part of what Müller appears to have been doing with his address to the workers at Wolfsburg is to prepare them for the pain that lies ahead and that hard decisions will have to be taken. His comments about the future investment strategy are particularly interesting and it is likely that some future model plans could be adjusted if their business case is thought to be marginal. In light of this, it will be interesting to see if the second-generation VW Phaeton will reach production, while Autocar has also speculated that Bugatti's future may be under review. Another project that is almost certain to be a casualty of the emissions situation is VW's purchase of the Red Bull Formula One team, which was thought to have been on the agenda before the EA189 emissions situation came to light.
