Volkswagen is repositioning itself for a brighter future, says boss Matthias Müller, with the group's realignment set to be complete by 2017
10 December 2015

Volkswagen boss Matthias Müller has said he will not allow the dieselgate emissions scandal to "paralyse the company", and will instead use the situation as a "catalyst for change".

Speaking at a press conference at the firm's Wolsburg headquarters alongside VW Group board chairman Hans Dieter Pötsch, Müller reiterated that Volkswagen's five-point recovery plan will help to restore the company's "excellent past reputation". The plan, first revealed last month, hinges on fixing the engines affected by the emissions scandal, reducing costs, creating new synergies within the Volkswagen Group and creating a more open corporate culture.

"Our first priority is the technical solutions for our customers," said Müller. "Customers want to know how the manipulations came about. They want their vehicles put right as soon as possible.

"Our second priority is establishing the truth with internal auditing. When we uncovered implausabilities in the CO2 emissions in November, the fact that we went public at an early stage, demonstrates that we are willing to be as transparent as possible."

While Volkswagen has already detailed the fixes it will use to bring the EA189 diesel engine at the centre of the scandal into line with emissions legislation in Europe, Müller admitted it will be some time before fixes for cars in the US can be revealed. "Rest assured we are working as fast as we can to come up with a solution," said Müller.

Speaking about Volkswagen's group realignment, Müller said the plan to de-centralise the group's structure was always on the cards, but the dieselgate scandal had forced the plan to be enacted faster than expected. The realignment hinges on the firm's various brands and regions having greater autonomy than before, with the central VW Group focussing more on new strategies and synergies. "All of these structural changes aim to reduce complexity," says Müller, "there is definitely room for improvement. Our most valuable currency is credibility and trust in our brands, products and people."

The new group structure will begin to be implemented in the first quarter of next year, with the full realignment completed by the start of 2017. More detail about how Volkswagen will operate in the future will be revealed in April 2016, when the firm publishes its full Strategy 2025 plan.

"We have not given up our claim of leadership in our industry," says Müller. "We want to shape the future of motability and we have the potential. We are working hard on all our the five points already announced and we are making progress.

"We want to create a new, a better, and a stronger Volkswagen. A company that uses its strengths to make the transition to the new world of automobiles. A company that now releases new forces, and takes better advantage of its huge potential. And, last but not least, a company that will be successful over the long term on the basis of strong values.”

Watch the full press conference in the video below.

As it happened - Volkswagen press conference. Live blog by Darren Moss, Jim Holder and Matthew Burrow.

1205 The press conference now comes to an end. Thanks for following our live coverage of today's press conference. Check back in a short while for the full story.

1202 Müller confirms he will be travelling across the US in January, and will be in attendance at the Detroit motor show.

1200 Müller has been asked which areas of the company knew about the defeat device software. The answer is short - once the company has the results of its investigation, it will release them.

1150 Volkswagen will not ask suppliers to cut prices, says Müller, as he confirms that demand for the firm's diesel engines is still strong. However, he admits that "electric motoring is not as popular as hoped for." Müller also confirms that VW will launch a pro-diesel advertising campaign in the near future.

1148 With regards to cost-cutting, Müller is asked which models are still viable. "We have to review the line-up," says Müller. "You have to look at the whole picture." On the future of the Bugatti brand, Müller re-confirms that the Chiron will make its debut at the Geneva motor show next March. "We have to ask about which products will be profitable for our brands," he says.

1144 Müller is now asked whether VW will address lower resale values in the UK. He replies that VW's planned compensation package will aim to make up for this.

1140 Mr. Pötsch is now asked about the contingencies set aside for legal action, and whether he plans to address customers at the Detroit motor show. The answer from Pötsch is that there are so far no contingencies for litigation, but the company is monitoring the situation in the US with regards to legal action from consumers. He will be scheduling a visit to the US in the days after the Detroit motor show.

1134 Questions are now asked of VW's shareholders. Müller confirms that he went to Qatar to talk with shareholders there.

1127 A journalist now asks whether Volkswagen has discovered how the so-called 'defeat device' works. Müller replies: "Our experts looked at the software. Analysed all of the relevant functions. The software has been there for more than 10 years. The process has not been completed. We're talking about millions of lines of code. We need different solutions for different engines and variants. Some can be fixed with a software update. Some need additional hardware."

1120 The third question asks what mistakes were made by the VW board, and when the company will know how much the emissions scandal has cost it overall. Mr. Pötsch says there are no plans to sell off assets in order to pay for the scandal, and that there is no indication that any board member was involved.

1117 The next question asks whether customers will be better or worse off, and whether compensation will be offered in territories outside the US. Müller answers: "We're offering technical solutions that do not impact the performance of our cars. In terms of a compensation package our customers are always at the focus of our attention, and we are working on an overall package for all affected markets."

1115 The first question concerns where Volkswagen will be prioritising its efforts in 2016. Müller answers: "VW is global, we do have some deficits in some markets, we're looking at all the markets and seeing which brands should be successful in which markets. America is still very important, as is Russia and other regions in difficulty."

1112 "We want to create a new, a better, and a stronger Volkswagen," says Müller, ending the press conference and opening up the floor to questions.

1110 Volkswagen will not economise on its future, says Müller, as he re-iterates that any project which isn't deemed as being absolutely necessary will be cancelled or postponed. The company is now planning only one year ahead, he says.

1107 Müller admits that changing the day to day operations of Volkswagen is challenging, but says that customer relations management is vital to the company's future. Volkswagen will not be changing the adjusted annual forecast it issued at the beginning of October. "We are fighting for every customer and every car," says Müller.

1104 "We have not given up our claim of leadership in our industry," says Müller "we want to shape the future of motability and we have the potential. We are working hard on all our the five points already announced and we are making progress."

1103 Summing up, Müller says: "eight years ago we sent a strong signal with strategy 2018. We were making good progress. We are making progress towards a more sustainable future. We are realigning Volkswagen in terms of strategy and technology." The full version of Volkswagen's Strategy 2025 plan will be announced in the middle of next year.

1102 Volkswagen will have "greater humility" at motor shows, says Müller, and will be selling its Airbus aircraft to creat a "more efficient air service."

1101 "In a nutshell: the future at VW belongs to the brave," says Müller "we need more of Silicon Valley along with our Wolfsburg background. How do we bring this to our 600,000 employees? Just do it. As the mangement team we just have to get on with it."

1100 An interesting point from Müller: "mistakes are allowed as long as we understand them as an opportunity for learning."

1058 Volkswagen will begin implementing its new structure at the beginning of next year, with the full re-alignment set to be completed by the beginning of 2017.

1055 The number of direct reports being sent to the CEO will be cut from 30 to 19, meaning Müller will be able to concentrate on "the essentials".

1052 "All of these structural changes aim to reduce complexity" says Müller, "there is definitely room for improvement. Our most valuable currency is credibility and trust in our brands, products and people."

1050 Decisions on the future of the Volkswagen Group willl be taken at the level where they will have the most impact, says Müller, with brands and regions being given greater autonomy to govern themselves. The board of management will instead concentrate on creating new strategies and synergies.

1048 Volkswagen's realignment was always on the cards, says Müller, but the present crisis has sped up its integration. 

1046 Müller says that the technical fixes for US engines are far more complex, and VW won't be announcing fixes for these engines today. "Rest assured we are working as fast as we can to come up with a solution," says Müller.

1044 Recalls will take place throughout 2016, says Müller. The 2.0-litre TDI will be fixed next month, folllowed by the 1.2-litre TDI in Q2 2016, and the 1.6-litre TDI in Q3 of next year. Müller stresses that owners don't need to contact them directly.

1043 Volkswagen says it has now received approved technical fixes for all three variants of the EA189 diesel engine in Europe. Müller thanks engineer who have "been working day and night" to get the fixes ready. He says the engines will now comply with all legislation.

1042 Müller says that Volkswagen will not allow the emissions sandal to "paralyse" the company, and will instead use it as a "catalyst for change."

1041 Müller says: "Our first priority is the technical solutions for our customers. Customers want to know how the manipulations came about. They want their vehicles put right as soon as possible.

"Our second priority is establishing the truth with internal auditing. When we uncovered implausabilities in the CO2 emissions in November, the fact that we went public at an early stage, demonstrates thatt we are willing to be as transparent as possible."

1040 Matthias Müller re-iterates his five point plan first presented back in October. He says that Volkswagen will learn from its past mistakes, in order to restore "VW's excellent past reputation."

1039 With that, Mr. Pötsch hands over to Matthias Müller.

1038 Volkswagen will release real-world emissions figures in the future, and its emissions tests will be verified by third parties. "We need the courage to be more honest," says Pötsch.

1036 "We know that the CO2 issue has been a cause of considerable concern for many of our customers" says Pötsch. He also reiterates that any change in taxes will be payed for by Volkswagen.

1034 With regards to Audi's V6 engine, which has been called into question in the US, Pötsch says: "There is one fundamental difference. The crux for EA189 engine is that the vehicle had two different exhaust strategies - one for the road and one for the test bench. That is not the case for Audi's V6 - the warm up strategies are identical on road and the test bench. One of the devices fitted could be considered forbidden in the US, but we will be offering a solution as swiftly as possible, and I would like to pull out that this affects around 100,000 units, so it is manageable."

1033 The manipulation of NOx levels was carried out "in the mistaken belief it would help customers" says Pötsch. "With hindsight this all sounds a little banal but that is perhaps why we find the whole thing so painful - not just because decisions were wrong but also because the priorities on which they were founded go against the VW Group values and those of the vast number of 600,000 employees."

1032 With regards to the NOx issue, Pötsch says: "We are not talking about a one-off mistake but a chain of mistakes that wasn't interrupted. Looking back we have to accept the developers couldn't find a way to meet tougher US NOx limits by permissible means - or at least which fitted the budget and timeframe they had been given. So software was fitted to manipulate NOX levels on a test bench."

1030 Interestingly, Pötsch says that despite around 2000 employees being informed to keep track of their data, the company maintains that the manipulation of diesel engine software was the result of only a few individuals.

1027 Volkswagen says it will also be upgrading its IT systems, making it possible for the firm to track individuals and events more closely.

1025 Volkswagen's internal audit uncovered "that procedural problems encouraged misconduct," says Pötsch. "Our engine control units were not suitable for preventing the software in question. Remedial measures include structuring processes better - for example, the belt and braces principle will be applied to developing ECUs, and approval processes will include more binding requirements. We cannot control individuals, but in future it will be much harder to bypass the rules."

1022 Pötsch says that the NOX issue is partly the result of "individual misconduct" by employees within the company, as well as flaws in VW Group's processes and an "attitude in some units of the company that tolerated breaches of rules."

1020 According to Pötsch, the full results of the investigation will be presented at VW's Annual General Meeting in April 2016.

1018 Pötsch outlines the main questions the investigation is focussing on: "Exactly what happened and when, where regulations and laws were broken and which ones, to what extent did our internal processes encourage this, who is responsible for the misconduct - directly and overall - and finally how do we ensure nothing like this happens ever again."

In total, 450 internal and external investigators are working on the investigation - a sign of how seriously Volkswagen is taking the scandal.

1016 Pötsch says: "As internal source drew attention to CO2 issues and this was immediately and proactively communicated. We announced up to 800,000 vehicles could be affected. Slight deviations were only found for a very small number of vehicles which will now be adjusted in normal procedure of customers. That is good news for customers." He also confirms that the investigation to find those responsible for the scandal is ongoing.

1014 Recapping on what has been revealed so far, Pötsch says: "We are dealing with two very different issues, The first concerns up to 11 million of our diesels fitted with a sosftware programme that influenced NOx emissions. The second issue relates to CO2 emissions and related fuel consumption issues."

1012 Pötsch re-iterates that the VW Group will become less centralised in future, saying: "the supervisory board has taken many decisions to move swiftly forward, including a new management structure to decentralise the VW Group board so it is fresher and more dynamic so the Group can manage its huge potential even more effectively.

"We've also speeded up staff realignment within the group to effectively make changes, recruiting new people and giving some of the best minds in the Group new opportunities."

1010 Autocar deputy editor Mark Tisshaw is also watching the press conference. He says: "Hans Dieter Potsch regrets losing the trust of politicians. A good illustration of how bad this scandal is: you really have to go some to lose trust of politicians..."

1008 An apology is issued here straight away, as Mr. Pötsch says that Volkswagen will learn "form our mistakes and can ensure something like this nothing happens again."

1006 Mr. Pötsch continues: "We're all not only deeply shocked by the events but these events have also put the group in a very difficult situation. We're here to update you as to where we stand as to overcoming this crisis, and how the VW group is driving its renewal forward."

1005 Mr. Pötsch begins by saying: "I'm not giving away secrets when I say the past 2.5 months are not something anyone here has ever experienced. Noone here would have imagined a company where so many people give their best day after day and could end up in a situation like throne we've experienced."

1002 The press conference will run in two blocks today. "clarification and investigations with Mr. Pötsch and then Mr. Müller will details customer solutions and the new orientation of the company."

1000 The press conference is now starting. 

0957 The Volkswagen press conference is due to start very shotly. Speaking will by Chairman of the Supervisory Board of Volkswagen AG Hans Dieter Pötsch, and Volkswagen Group CEO Matthias Müller.

0954 Yesterday, it was revealed that Volkswagen's planned concept for the Consumer Electronics Show in Las Vegas next month will take the form of an electric Microbus. The concept will preview a planned return for the car, which is expected in 2017.

0952 Last month, Volkswagen also admitted that its 3.0-litre diesel engines were also affected by the scandal - potentially affecting another 85,000 vehicles in the US.

0950 In addition to the fixes already announced, Volkswagen has presented its fix for the 1.2-litre EA189 engine to the KBA authority in Germany. The alterations needed for that engine could well be detailed today.

0946 Volkswagen has already detailed some of the fixes it will use to bring the EA189 diesel engine into line with current emissions legislation. Both 1.6-litre and 2.0-litre versions of the engine require a software fix, but 1.6-litre versions will also have a new mesh placed around an air mass sensor inside the engine. 

0943 Interestingly, Bugatti's upcoming Chiron is seen as vital to the future of the group. Bugatti boss Wolfgang Dürheimer recently confirmed the Chiron would be seen for the first time at the Geneva motor show in March, and late-stage prototypes have given a good indication of how it will look.

0939 As part of its group realignment Volkswagen is known to be cutting back on any new model not seen as being vital to the group's future. Although a next-generation version of the Phaeton has been confirmed, it has been delayed until at least 2020.

0934 The emissions scandal has widened in recent weeks with new revelations regarding false CO2 readings in some vehicles. Yesterday, Volkswagen confirmed that nine of its cars were affected, while Audi and Skoda said that none of their cars were affected. Get the latest here.

0930 Welcome to Autocar's live coverage of Volkswagen's press conference today. The press conference will outline both the technical fixes used to rectify diesel engines in the emissions scandal, and also provide an update on the group's realignment.

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Comments
6

10 December 2015

Do the changes envisaged by the new management see VW workforce shrink?

10 December 2015
fadyady wrote:

Do the changes envisaged by the new management see VW workforce shrink?

At 1 hr 24 mins into the video, there is a question about 2016 temp workers and core staff. Müller answered (at 1:26:35) by saying that in 2016 job security, stable jobs, is key, as is true now, and that temporary jobs are a tool of ensuring flexibility which is not new and if ever changes occur to production programmes this can or may have an impact on the number of temporary workers.

10 December 2015

The question occurred in my mind primarily because Volkswagen is probably the most labour intensive car maker in the world which I suppose is good in some ways but certainly not in others.

10 December 2015

Cheers! If you get the chance, listen to the whole couple of hours of the presentation and Q&A, I found it interesting, and heartening.

10 December 2015

Mr Muller seems proud of the fact that they "went public at an early stage" after the CO2 discrepancies came to light. This is hardly praiseworthy: After continuing to lie to the US authorities (and to VW customers) for over 18 months about the NOX levels they couldn't really do anything else.

11 December 2015

Dieselgate or not, the best diesels are still made in germany.....with VW holding a small claim to this with the Bi-turbo TDI. Of course the barn storming BMW tri-turbo also comes from here......and for personal vehicles, diesel still accounts for 65% of all motors operating in europe. With riggers, farm tractors, mining juggernauts and ships still running on diesel (consuming 70% of diesel on this planet), isn't it the height hypocrisy to run a "meek looking diesel sedan outta town with a smokin' gun" just because its engine is kitted with an EMU that has a mind of its own? Me thinks that effort should be on fettling this crazy chip into a souped up emissions gate-keeper for the diesel cycle....."set a thief to catch a thief" kinda way!

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