Volkswagen CEO Starts His Trip to the U.S. With an Apology

When mistakes are made, apologies often follow. In the wake of Volkswagen’s massive emissions scandal, the company’s chief executive is starting his visit to the U.S. with a well-deserved apology.

Since 2009, nearly 600,000 Volkswagen diesel vehicles have come off the assembly lines equipped with ‘defeat devices’ — software that effectively allows the vehicles to hide the true emissions that are coming from each car. These devices are used to cheat emissions tests that would otherwise prevent the vehicles from being allowed on the road.

Volkswagen’s chief executive Matthias Müller will meet with EPA administrator Gina McCarthy this week to discuss plans to recall, repair or potentially buy back all of the affected vehicles. While Müller has offered a plan to rectify the situation, it has yet to be approved by the EPA.

Repair Plans

In terms of a technical solution, Volkswagen plans to retrofit as many affected vehicles as possible with a newly designed catalytic converter that will, in theory, bring the vehicle’s emissions into the legal range for cars in the U.S.

Right now, the plan is to try to retrofit at least 400,000 of the 600,000 cars that currently have emissions defeat devices installed. The company may also have to buy back as many as 100,000 affected cars.

In an effort to repair their public image, the company is also offering a “Goodwill Package” to drivers who own cars affected by this scandal. They are offering a $500 Visa Prepaid Card to each driver, in addition to a $500 Dealership Card and 24-hour roadside assistance.

Legal Action

Volkswagen is currently the target of a joint lawsuit being headed by the U.S. Department of Justice and the EPA. The class-action lawsuit is asking Volkswagen to pay a fine for each defeat device that was installed in vehicles in the United States.

That could potentially total up to $18 billion in fines and sanctions.

Moving Forward

While the fines and lawsuits may seem substantial, the sector that has taken the most damage is the company’s reputation. When the scandal first broke, Volkswagen’s stock lost nearly 20% of its value, and some sources in Germany are calling it a blow to the entire German car industry. A number of other car manufacturers are under the microscope now and are having their diesel cars retested and more closely scrutinized than ever before. They also sent out a call for whistleblowers to step forward and gave them a deadline where they could give information without fear from the company. Those who would come forward after the whistleblowing company may need an attorney to protect themselves. All in all, it’s been quite the mess for VW.

While Volkswagen has made plans for reparation in this unfortunate scandal, we have not yet seen the full impact of these events. It could potentially lead to a reform of the way we test for vehicle emissions, which would be a great thing.

As to whether or not Volkswagen will fully recover from this scandal, that will depend on how Müller’s meeting with the EPA administrator goes. We will learn much in the coming days that may determine if Volkswagen will regain their reputation and bounce back from these events.

All we can do right now is cross our fingers and hope this manufacturing giant doesn’t slowly fade into a piece of car-buff nostalgia.