VW’s top bosses plan a US trip as diesel scandal escalates image

Some highest-ranking executives from the Volkswagen Group will visit the US in the following days for the first time since the emissions cheating scandal broke out last year.

Little if any progress has Volkswagen made so far since the emissions scandal burst in September, especially in the US. And now, for the first time since that moment, the company’s top executives are planning to visit the States this week and the next one, both for attending a series of events and, more importantly, for tending to some very stringent priorities. VW brand CEO Herbert Diess, the former BMW executive tasked with rehabilitating the namesake marque’s tainted image and its weak earnings, will speak at the Consumer Electronics Show in Las Vegas this week and appear at the Detroit auto show starting Sunday. But the most important visit is that of Volkswagen CEO Matthias Mueller, who is also set to travel to the US next week to meet politicians and possibly other officials, though his schedule hasn’t been made public yet.

These trips come after the US Department of Justice, on behalf of the Environmental Protection Agency, filed a civil complaint in the federal court in Detroit on Monday, Michigan against Volkswagen AG, Audi and Porsche. The US authorities allege that nearly 600,000 diesel engine vehicles had illegal defeat devices installed that impaired their emission control systems and caused emissions to exceed EPA’s standards, resulting in harmful air pollution. The complaint further claims that Volkswagen violated the Clean Air Act. VW could in theory face fines exceeding 48 billion dollars – or as much as 37,500 dollars per vehicle per violation of the law, based on the complaint. The automaker has lost more than 10 billion euros (10.8 billion dollars) in market value since September 18.

If the emissions scandal situation is progressing in Europe – as the German Federal Motor Transport Authority approved the measures proposed for the EA189 1.2, 1.6 and 2.0-litre engines -, a plan for the affected cars in the US has not been agreed so far. “The US is playing a key role as VW faces the biggest financial threat there, and the risks elsewhere declined substantially,” said Juergen Pieper, a Frankfurt-based analyst for Bankhaus Metzler. “It’s important that VW hit the right tone.” Still, the most important question for the company is how soon it can announce a solution in the US, Arndt Ellinghorst, a London-based analyst for Evercore ISI, wrote in a note.

Via Bloomberg