'Weak Points' Led To Widespread Volkswagen Cheating, Says Top Execs

Volkswagen announced Thursday that the automaker’s investigation had identified institutional breakdowns and individual misconduct that led to the installation of more than 11 million “defeat devices” aimed at cheating emissions tests in its diesel cars.

Volkswagen Chairman Hans Dieter Pötsch told journalists and investors that some parts of the company “tolerated breaches of rules” while it developed the illegal devices, according to Automotive News.

Thursday’s announcement was an interim report on the internal investigation by Volkswagen that has already resulted in nine suspended employees, including a high-ranking engineer who was with the automaker for 30 years. Pötsch said the external investigation, which will be conducted by U.S. firm Jones Day, will continue well into 2016.

Pötsch confirmed that the illegal software installed into Volkswagen’s EA189 diesel engines that reduced performance in order to comply with emissions tests was developed by the company to meet stricter U.S. standards — even though the engines couldn’t comply.

The Volkswagen chairman said that engineers, rushed to bring to market a U.S.-compliant engine under budget and on time, developed the cheating software. The cheat wasn’t a one-off mistake, rather a “chain of mistakes,” according to Automotive News.

Despite a worldwide scandal affecting millions of cars, Volkswagen emphasized that the work of individuals was to blame for the defeat devices that have cost the company billions already.

“It is clear that, in the past, deficiencies in processes have favored misconduct on the part of individuals,” the company wrote in a statement Thursday.

Volkswagen said it would make more transparent the engineering in its cars, and said, for example, that ECU management software would be reviewed four times before being installed.

Pötsch said that the “investigation is producing valuable findings, which will help us create a structure that, rather than favoring breaches of regulations, will prevent them, or at least allow them to be detected early on,” according to the automaker.

Volkswagen hasn’t revealed how its cars in the U.S. will be brought into compliance with emissions standards, but said Thursday that it would a bigger “technical challenge” to fix cars in the States. Volkswagen said it would begin recalling cars in Europe starting in January, beginning with the 2-liter engine.

New Volkswagen CEO Matthias Müller said that the group would draw heavily on sources outside Germany to help bring the brand back from the diesel scandal. The automaker is planning a digital and electrification “offensive,” according to the automaker. Müller called for new ideas at the group:

We don’t need yes-men, but managers and engineers who make good arguments in support of their convictions and projects, who think and act like entrepreneurs. I am calling for people who are curious, independent, and pioneering. People who follow their instincts and are not merely guided by the possible consequences of impending failure. In short: the future at Volkswagen belongs to the bold. We need a little more Silicon Valley, coupled with the competence from Wolfsburg, Ingolstadt, Stuttgart, and the other Group locations.

According to Automotive News, Müller hinted that the group may not be preparing to sell off some of its brands such as Ducati, Bugatti, Lamborghini or heavy truck maker Scania.

“There is no reason whatsoever to get rid of these assets,” Müller said, according to the report. “We are looking forward to the future of VW. We want to make this company more modern, more open.”