VW CEO: ‘Endlessly sorry’ for violating people’s trust

Associated Press

BERLIN

Volkswagen AG’s smog-test troubles escalated Tuesday as the company admitted putting stealth software in millions of vehicles worldwide. The scandal has cost VW more than 24 billion euros ($26 billion) in market value.

Volkswagen stunningly admitted that some 11 million of the German carmaker’s diesel vehicles contain software that evades emissions controls, far more than the 482,000 identified by the U.S. Environmental Protection Agency as violating the Clean Air Act.

Volkswagen also warned that future profits could be affected, and set aside an initial 6.5 billion euros ($7.3 billion) to cover the fallout.

CEO Martin Winterkorn apologized for the deception under his leadership and pledged a fast and thorough investigation, but gave no indication that he might resign.

“Millions of people across the world trust our brands, our cars and our technologies,” Winterkorn said Tuesday in a video message. “I am endlessly sorry that we have disappointed this trust. I apologize in every way to our customers, to authorities and the whole public for the wrongdoing.”

“We are asking, I am asking for your trust on our way forward,” he said. “We will clear this up.”

VW has yet to explain who installed the software, under what direction, and why.

“I do not have the answers to all the questions at this point myself, but we are in the process of clearing up the background relentlessly,” Winterkorn said.

The damage to Volkswagen’s reputation was reflected in the market’s response. Volkswagen’s ordinary shares fell 20 percent Tuesday to close at 111.20 euros ($120.44). They’re down 31 percent since the crisis began.

The EPA said Friday that VW faces potential fines of $37,500 per vehicle, and that anyone found personally responsible is subject to $3,750 per violation.

The U.S. Justice Department has joined the investigation, and Tuesday, New York Attorney General Eric. T. Schneiderman announced that he’ll collaborate with other states to enforce consumer and environmental protections in the case.

After blaming unrelated issues for more than a year, the company told U.S. regulators Sept. 3 that it installed software that switches engines to a cleaner mode during emissions testing. The software then switches off again on the road, enabling cars to drive more powerfully while emitting as much as 40 times the legal pollution limit.

“Let’s be clear about this. Our company was dishonest. With the EPA, and the California Air Resources Board, and with all of you. And in my German words, we have totally screwed up,” the head of Volkswagen’s U.S. division, Michael Horn, said Monday while unveiling a new Passat model in New York.

“We must fix those cars to prevent this from ever happening again, and we have to make things right. With the government, the public, our customers, our employees, and very importantly, with our dealers.”