By on October 6, 2015

 

Speaking to roughly 20,000 employees in Wolfsburg on Tuesday, new Volkswagen CEO Matthias Müller outlined the big-picture view for the weeks, months and years ahead. (It’s not good, if you’re wondering.)

Anything that is not absolutely necessary will be cancelled or postponed. And it is why we will be intensifying the efficiency program. To be perfectly frank: this will not be a painless process.

The automaker plans “massive cutbacks” according to Reuters, but Müller stopped short of outlining specifics to slow production or lay off workers. The 62-year-old CEO told workers that the company hasn’t calculated the final toll lying about pollution levels in 11 million cars would take on the company.

… while the technical solutions to these problems are imminent, it is not possible to quantify the commercial and financial implications at present.

Müller hinted at the possible fixes those Volkswagens, which were equipped with diesel engines that polluted up to 40 times the legal limits of nitrogen oxides, would undergo to bring them up to compliance with emissions standards.

In many instances a software update will be sufficient. Some vehicles, however, will also require hardware modifications. We will keep our customers constantly informed about the measures and arrange workshop appointments.

Volkswagen is due Thursday to submit a proposed fix to the German transportation authority for its cars. Bloomberg reported Monday that any potential fix could range from $22 to $11,200 for each car, which underscored the wide reach across multiple countries with different emissions standards Volkswagen needs to deal with in fixing 11 million cars.

Müller said projects that weren’t critical or “absolutely necessary” would be postponed or cancelled. And added that Volkswagen “must make massive savings to manage the consequences of this crisis.”

At least he didn’t give his speech on a Monday.

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27 Comments on “Volkswagen CEO Müller Tells Employees That Future Won’t Be ‘Painless’...”


  • avatar
    CoreyDL

    It really sucks how all the employees will be punished and experience the work stoppages and cutbacks, when only a few at the top made the decision to cheat.

    But I suppose that is the way of capitalism.

    • 0 avatar
      RideHeight

      Well, I don’t know how unique it is to capitalism.

      The cave people who paid attention in cave school to learning how to rub sticks and avoid poisonous berries probably avoided a lot of downsizing, too.

      • 0 avatar
        CoreyDL

        Well in a large organization such as VW experiencing a large financial loss, everyone must pay rather than just those who caused the issue.

        I guess I dunno if non-capitalist systems end up with such large companies that report to shareholders.

        • 0 avatar
          fincar1

          Well, for an example of how a large government organization deals with a disaster, you might consider what has happened at the EPA as a result of the large spillage into the Pueblo River in Colorado.

          • 0 avatar
            Wheatridger

            There is no “Pueblo River” in Colorado. And while you’re updating your in-depth research on the matter, you might inquire about which private mining company, long-dead now, actually created the problem.

    • 0 avatar
      DanHumphrey

      I work for one of the big four banks you (almost certainly) hate, on the software side and completely unrelated to finance and mortgages, but that didn’t stop work from getting a whole lot harder over the past years.

  • avatar
    GermanReliabilityMyth

    Sometimes, globalization is a bitch.

  • avatar
    mchan1

    Have to hand it to VW management for stating the obvious considering that it’s still looking for scapegoats and the reason they are in this current crisis is due to “management” lying and cheating, a mess created by “management”.

    The really sad thing is… generally, many management types will keep their jobs with their highly paid compensation packages.

    • 0 avatar
      th009

      Many managers will keep their jobs. As they should, vast majority of the people at Volkswagen were completely unaware of this.

      The key is to identify the people involved (what you call “scapegoats”) and mete the appropriate punishment.

  • avatar
    WhiskeyRiver

    “Meanwhile, in a speech to employees titled ‘DUH’ new Volkswagen CEO Matthias Müller outlined the big-picture view for the weeks, months and years ahead.”

  • avatar
    thornmark

    I read that TN is reconsidering the “incentives” for the VW facility there.

    Bloomberg: “Tennessee Reviews Clawbacks for VW Tax Incentives After Cheating”.

    Well, at least they’ll have an excuse when the plant closes. Silver lining for the German Union that always wanted the plant to fail.

  • avatar
    Lou_BC

    “Anything that is not absolutely necessary will be cancelled or postponed.”

    I’m sure that does not apply to the higher echelon.

    • 0 avatar
      th009

      It just might.

      ‘”We will pay extra attention to bonus payments to members of the management board,” Bernd Osterloh, a supervisory board member and head of the works council, told employees at today’s meeting.’

  • avatar
    George B

    Volkswagen faces enormous expenses due to deception as opposed to manufacturing defects. Not only did they mislead both government regulators and consumers about “clean diesel”, they doubled down with an ineffective recall and software update when they were caught. The loss of trust makes it harder for Volkswagen to solve their emissions problems because everyone will need to spend time trying to determine if Volkswagen is finally telling the truth.

  • avatar
    RideHeight

    What’s happening to VW sales outside the US? Is it still business as usual?

    And what else are average Europeans going to buy, French stuff? Fiat?

    Given VW’s negligible penetration in the US this whole escapade seems like little more than a windfall opportunity for VW to do some pruning at home.

    They’ve really only pissed-off Americans.

  • avatar
    RideHeight

    What’s happening to VW sales outside the US? Is it still business as usual?

    And what else are average Europeans going to buy, French stuff? Fiat?

    Given VW’s negligible penetration in the US this whole escapade seems like little more than a windfall opportunity for VW to do some pruning at home.

    They’ve really only p*ssed-off Americans. Who don’t much matter to them.

  • avatar
    John Franklin Mason

    I smell a rat at Volkswagen and it is the new CEO Matthias Müller.

    The situation is such Muller is out to scare and squeeze the workers at Volkswagen.

    Scandals at BP, Penn State and General Motors have shown that albeit huge institutions can and will lie, screw and/or cheat you; they can always pay their way out of it and still profit.

    Volkswagen CEO Matthias Müller obvious intent is to make Volkswagen’s workers pay for Corporations corruption.

  • avatar
    Gardiner Westbound

    Looks like Mueller is having a bad hair day!

    • 0 avatar
      turf3

      No, that’s just the Euro-weenie-bangs look they affect over there. Not really sure what image it’s supposed to be conveying. I can tell you what image it conveys to me.

    • 0 avatar
      johnny ro

      62 year old apprentice toolmaker from East Germany rose to CEO of Porsche then tapped for top VAG job in an emergency.

      Personal appearance? Hair? I see physically fit and white teeth, sharp canines. Built in smart smile. Low maintenance hair. Healthy and well adjusted.

      I sense a real car guy. Probably has a shop at home and does real stuff there. Knows his shit. Seems clean of lying-cheating scandal.

      Not afraid to ask for real money for good product. Likes making good product.

      Maybe he is OK?

      Am I drinking the Koolaid?

  • avatar
    redliner

    So I guess this means VWs eternally postponed crossover and suv is, um, postponed some more?

  • avatar
    swilliams41

    OH MY!!! My TDI has more power and better milage because VW cheated on emission test. What to do….hmmmm…NOTHING BUT ENJOY THE CAR.

  • avatar
    Blackbeard

    Volkswagen is finished in the U.S. Passenger car diesels are finished everywhere. Environmental agencies in the U.S. and Europe will move to real world as opposed to dynamometer testing which will make permitting any new car very difficult and expensive. Where this ends up is a three tier automotive market: (1) for the 10% and above Tesla or equivalent; (2) for folks below that income level Leaf or equivalent; and (3) ICE cars for the truly rich as conspicuous consumption. For city dwellers, who cannot charge their cars in the driveway overnight, private cars will disappear to be replaced by autonomous electric Uber type services. How long will this take? I would guess the major elements will be in place in 15 years.

  • avatar

    who exactly made the decision? who is going to jail?

  • avatar
    Joss

    Who did it? Who wrote the cheat? Who okayed it? And where did they come from? VW needs to rule out a competitor mole.

    • 0 avatar
      05lgt

      Bosch wrote the cheat, and really hopes that sending an email saying “Whatever you do, don’t use the code we just sent you.” protects them in all this. Since there’s no reasonable expectation that VW ever paid for the cheat to NOT use it, I’m thinking Bosch stock may fall soon. But, I’m not in any way qualified to, nor do I intend to be giving investment advice.

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