Volkswagen Emissions Scandal: New Chief Warns Of ‘Existence-Threatening Crisis For The Company’

Volkswagen AG’s new chairman Hans Dieter Poetsch warned that the company could face an “existence-threatening crisis” over the massive emissions scandal, media reports said, citing Welt am Sonntag newspaper.

The German carmaker has time until Wednesday to fix some 2.8 million diesel vehicles equipped with software to cheat on emissions tests, in its home market. Poetsch’s comments come after he told managers last week he was certain that Volkswagen will overcome the crisis, Bloomberg reported, citing Welt am Sonntag. The German automaker was found to have installed so-called "defeat devises" on its cars that would reduce emission levels during tests.

Two top Volkswagen engineers who found they couldn’t deliver as promised a clean diesel engine that could meet pollution standards in the United States and other countries are at the center of the probe into the installation of the software, which was designed to fool regulators, the Wall Street Journal reported, citing people familiar with the matter.

The two men, Ulrich Hackenberg, Audi’s chief engineer, and Wolfgang Hatz, developer of Porsche’s Le Mans racing engines, were among the engineers suspended in the investigation, according to the sources.

Last month, the Environmental Protection Agency (EPA) accused Volkswagen of using software that allowed its diesel vehicles to emit pollutants above legal limits except when they were subjected to emissions tests. Last week, Volkswagen revealed that as many as 11 million vehicles carry the emissions-rigging software. The revelations triggered inquiries into the carmaker's practices in several countries around the world.

German authorities, however, have not launched a formal inquiry against Volkswagen’s former CEO Martin Winterkorn, who stepped down after the cheating came to light. No specific individuals have so far been targeted in the official investigation into the massive emissions scandal.

“Our company was dishonest with the EPA, and the California Air Resources Board, and with all of you,” Michael Horn, head of Volkswagen America, told dealers last month in New York City. “We’ve totally screwed up.”

The cheating scandal has brought down the company’s market value by 42 percent since Sept. 18, and during Monday’s trade, Volkswagen stock went down as much as 4 percent in Frankfurt.