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Volkswagen's US boss apologises during grilling over scandal by Congress

Published 08/10/2015

Volkswagen Group of America boss Michael Horn will face a grilling by members of the US Congress (AP)
Volkswagen Group of America boss Michael Horn will face a grilling by members of the US Congress (AP)

Volkswagen's top US executive offered deep apologies yet sought to distance himself Thursday from the emissions scandal enveloping the world's largest carmaker, asserting top corporate officials had no knowledge of the cheating software installed in 11 million diesel cars.

Though he said he had not been briefed on the preliminary findings of the ongoing internal investigation, Volkswagen of America chief executive Michael Horn told a congressional subcommittee that a tiny group of software developers in Germany was responsible for the computer code that enabled the cars to trick US government emissions tests. Three lower-level managers have been suspended.

"To my understanding this was not a corporate decision, this was something individuals did," Mr Horn said, adding that he felt personally deceived.

That explanation left members of the House panel investigating the scheme incredulous.

"I agree it's very hard to believe," Mr Horn conceded.

Chris Collins was among the politicians who said he could not accept VW's characterisation that "this was the work of a couple of rogue engineers".

Mr Collins, an engineer, suggested that such a far-reaching cheating strategy could not be pulled off without the complicity of high-ranking supervisors across several parts of the company.

"What I've picked up here and I hope you can relay back to your board, the folks running Volkswagen back in Germany, is that the response so far is inadequate," Mr Collins said. "It's a sign of arrogance. It's a sign of not admitting yet the severity of your problem."

For more than two hours, Mr Horn sat calmly, occasionally sipping from a cup of water as news photographers' camera shutters clicked away. As the elected officials expressed anger, disappointment and scepticism at the company where he has worked for nearly half his life, the 51-year-old German executive apologised but provided little new information.

More than a month after the company first confessed the emissions-rigging to US regulators, Mr Horn said it does not yet have a detailed plan for fixing the nearly 500,000 "clean diesel" cars sold in the US with the suspect software since the 2009 model year. Such a solution will likely take up to two years, he said, adding that each car might require between five and 10 hours' work by a mechanic to meet clean air standards.

The cars are safe to drive, the government says, but Mr Horn suggested Volkswagen could compensate some owners, possibly by paying them for the lost value of their vehicles. So far, the company has set aside more than 7 billion US dollars to address the scandal, which Mr Horn said may not be enough.

Shortly before Mr Horn began his testimony, German police and prosecutors raided VW's global headquarters in Wolfsburg and other locations seeking material that would help clarify who was responsible for the cheating. The searches were intended to "secure documents and data storage devices" that could identify those involved in the alleged manipulation and explain how it was carried out, prosecutors said.

In the US, the Environmental Protection Agency and the Justice Department are conducting a criminal investigation. VW also potentially faces billions in fines for violating the Clean Air Act, as well as a raft of state investigations and class-action lawsuits filed on behalf of customers.

Mr Horn said VW plans to withdraw applications seeking US emissions certifications for its 2016 model Jettas, Golfs, Passats and Beetles with diesel engines. That raised questions about whether a "defeat device" similar to that in earlier models is also in the new cars.

By withdrawing the applications for the 2016 models, VW is leaving thousands of diesel vehicles stranded at ports nationwide. It was not immediately clear what a newly revealed device found in the new VW models does, or when the company might resubmit the applications needed to sell the cars.

Liz Purchia, an EPA spokeswoman, said VW recently gave the agency information on an "auxiliary emissions control device." The EPA and California Air Resources Board are investigating "the nature and purpose" of the device, she said.

The lack of certification is bad news for American VW dealers who had hoped to put the new models on sale soon. For some dealerships, the diesel models account for about one-third of sales.

During the hearing, politicians from both parties fondly recalled their first VWs before hammering the company for betraying the public's trust.

Fred Upton, chairman of the House Energy and Commerce Committee, said Volkswagen "has long enjoyed an almost cultish following dating back to the Beetle. But through the years something apparently became rotten in Wolfsburg and cheating and betrayal became part of the VW game plan".

It was Morgan Griffith who most directly channelled the anger and hurt of Volkswagen's customer base.

He recounted that when his mother could afford her first new car, she bought the stick-shift Volkswagen Squareback on which he learned to drive. He inherited his grandmother's 1972 Super Beetle, which he still owns.

He bought a Rabbit in the 1980s, and in the 1990s a gas-powered Jetta, Mr Griffith said. He then bought a 2003 petrol-powered Passat and racked up 376,225 miles, followed by a 2012 diesel Passat - one of the cars caught up in the scandal.

"I'm your consumer," Mr Griffith told Mr Horn, his voice stern. "I'm your VW driver who has always trusted your company, and I'm very disappointed."

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