#VwDieselScandal

Volkswagen of America CEO Michael Horn testified to a congressional committee Thursday that he wasn’t aware until last month of the illegal “defeat device” installed on nearly 500,000 cars in the U.S. — approximately 11 million worldwide — and that the car company could take several years to fix its cars.

Horn testified in front of the U.S. House Energy and Commerce’s subcommittee for oversight and investigations for more than two hours.

“I would like to offer a sincere apology for Volkswagen’s use of a software program that served to defeat the regular emissions testing regime,” Horn said in a prepared response before answering questions from representatives.

Volkswagen offices and private residences were raided Thursday morning in Wolfsburg as part of the ongoing investigation into the company’s emission scheme that saw “defeat devices” used in its 2.0-liter diesel vehicles, reports German media outlet HAZ.

A team of approximately 50 task force personnel from the Lower Saxony’s office of criminal investigation raided multiple locations to gather evidence on those involved in the scandal.

In a prepared statement released ahead of congressional testimony Thursday, Volkswagen of America CEO Michael Horn said the automaker knew of emissions issues last spring when West Virginia University researchers published findings that the automaker’s cars were illegally polluting. (Emphasis mine.)

In the spring of 2014 when the West Virginia University study was published, I was told that there was a possible emissions non-compliance that could be remedied. I was informed that EPA regulations included various penalties for non-compliance with the emissions standards and that the agencies can conduct engineering tests which could include “defeat device” testing or analysis. I was also informed that the company engineers would work with the agencies to resolve the issue.

(Should have followed up a little more on that email, probably.)

Volkswagen lobbied hard in 2011 to receive the same — or higher — clean vehicle credits as electric cars, the New York Times reported Wednesday.

“They wanted a special deal for diesel cars that we now know weren’t even meeting the standard,” Margo Oge, a former director of the E.P.A. Office of Transportation and Air Quality, told the New York Times.

The LA Times reported that roughly $51 million in credits was paid by taxpayers in 2009 for diesel cars that lied about mileage and emissions — essentially a cheap bar trick.

Volkswagen’s supervisory board confirmed its appointment of Hans Dieter Pötsch to its top seat during a scandal rocking the 78-year-old automaker, the company announced Wednesday.

Pötsch said he would continue the investigation as chairman:

I will do my utmost to uncover the full truth of what happened. I am firmly resolved to make my contribution so that Volkswagen can win back the trust of customers, the public, investors and business partners. And I believe my central task is to play my part in guiding Volkswagen towards a successful future.

Volkswagen CEO Matthias Müller told German authorities that the company would begin recalling cars in Europe in January and that fixes those cars take roughly one year to complete, Automotive News reported.

Müller told German newspaper Frankfurter Allgemeine Zeitung that the company found 9.5 million affected cars, not 11 million, that would need to be fixed. Müller didn’t specify what the fixes for cars would be, but said that the company was preparing “thousands” of solutions for its cars that cheated emission tests. Müller said the company would replace cars in certain circumstances.

It’s unclear when recalls for the 482,000 cars in the U.S. would start.

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.

According to Reuters, Volkswagen may have suspended engineers — including top engineers for Audi, Volkswagen and Porsche — without any evidence.

According to the report, more than 10 engineers were suspended in the fallout after it became clear the automaker cheated its way through emissions tests in the U.S. and Europe. It’s not clear if the suspended engineers would be reinstated at the company.

Reuters reported that VW’s internal investigation revealed that the illegal “defeat devices” began appearing in cars around 2008 after engineers discovered that their engine, which was costly to produce, wouldn’t pass emissions tests.

Volkswagen has a very steep, very tough hill to climb, and Volkswagen’s incoming chairman said the emissions scandal that affects 11 million cars is “a threat to the firm’s viability albeit a surmountable one,” reports Reuters.

Dieter Pötsch, who will soon take the chairman spot at Volkswagen Group AG, described the challenges ahead as an “existence-threatening crisis for the company” during a corporate meeting with employees in Wolfsburg, Germany’s Welt am Sonntag reported.

In order to take on those challenges, Volkswagen needs to fund the repairs of some 11 million vehicles, meaning cuts may be made to the company’s 100 billion euro R&D investment budget that was expected to last until 2018.

A cut in R&D spending is seen as a way to avoid a downgrade of the company’s credit ratings, a source close to the company’s board told Reuters.

Update: We finally heard back from Volkswagen Canada (though, as you can imagine, their media relations department is probably a tad bit busier than usual).

The $2,000 amount is being offered as a “loyalty discount” for current TDI owners, regardless of size or type of diesel engine, for any new Volkswagen, regardless of engine and fuel type (except for stop-sale models, obviously). TDI owners do not need to trade-in their EA 189-equipped cars to qualify.

We attempted as best we could to confirm the ‘discount-on-trade-in’ story and we were given evidence to support the original story in La Presse. However, the truth was to the contrary. We apologize for the error.

The article now reflects the update.

Volkswagen Canada is offering a $2,000 incentive for current TDI owners, regardless of the age of the car or type of TDI engine, toward any other new Volkswagen model.

La Presse spoke to a dealer in Montreal who stated that they are taking affected TDI models in on trade and offering the discount. However, the discount is being offered as a “loyalty discount” to all TDI owners, and a trade-in is not required.

German transportation authorities said Friday that Volkswagen can’t phone a friend for help, they’re on their own.

“At this point we have no indication of other manufacturers being involved,” a government spokesman, said according to Reuters (via Automotive News Europe).

Being the only automaker embroiled in the scandal — for now — means that Volkswagen will have to face alone the wrath from governments tripping over themselves to charge the automaker with just about anything they want. In the U.S., Volkswagen faces a pending congressional inquiry; in France, prosecutors have opened an investigation for “aggravated deception;” in Italy, the government’s antitrust authority has begun an investigation; in Switzerland — you get the idea.

Audi in Germany on Friday added information to its main website so customers can determine if their car is affected by an illegal “defeat device” included in 11 million Volkswagen Group cars.

Audi owners can identify if their cars will be part of the unprecedented recall by entering the car’s VIN into the website. Audi said it would roll out a similar service in separate, worldwide markets in coming days. Audi owners can also go to dealerships to see if their cars will require recall work.

Volkswagen created a website in the U.S. this week to answer preliminary questions for its owners, including a video message by Volkswagen of America CEO Michael Horn.

Twelve days after early reports revealed that Volkswagen Of America’s TDI Clean Diesels weren’t so clean after all, Volkswagen reported a one-percent U.S. sales increase for the month of September 2015, the month in which the emissions fraud was revealed.

But did Volkswagen’s U.S. volume truly rise? And if so, what kind of extra volume is generated by a one-percent uptick? Moreover, while Volkswagen trickled forward with just its fourth year-over-year U.S. monthly sales improvement in 2015, what was the rest of the auto industry accomplishing?

While working on a story about some very old cars, I stumbled upon something relevant to the latest big story in the automotive world.

I ran into a Model T collector who’s also a powertrain engineer for Ford. Seizing the opportunity, I asked him if he could tell me what he was working on (sometimes they say no). He said that he was responsible for developing computerized engine controls. Because of that expertise, I started to ask him some questions about the software program that Volkswagen apparently used to cheat on the EPA’s diesel emissions testing.

What he was willing to say and what he wouldn’t say intrigued me.