New VW boss warns workers of "painful" cuts

Matthias Muller warns that crisis has undermined the core values of the brand.

By Greg Kable, Autocar UK

07 Oct 2015

3067 Views

Matthias Muller: “We will review all planned investments, and what isn’t absolutely vital will be cancelled or delayed."

Volkswagen will cancel or delay all non-essential projects as it seeks to rebuild following the emissions scandal – with new company boss Matthias Müller warning that the process "won’t be painless.”

Müller addressed 20,000 workers at a works council meeting in Wolfsburg yesterday morning, saying: “We will review all planned investments, and what isn’t absolutely vital will be cancelled or delayed. I will be completely clear: this won’t be painless.”

"In addition to the huge financial loss, this crisis is primarily a crisis about a loss of confidence. It affects the core of our company and our identity, our cars, and the essence of the brand: solidity, reliability and credibility."

Müller also confirmed that technicians are close to revealing a technical solution to the defeat devices that were employed on cars fitted with the EA189 diesel engine. He confirmed that some cars will require only a software upgrade, whereas others will also require hardware modifications. Unconfirmed reports suggest that the biggest changes will be required on 1.6-litre versions of the engine, although VW has declined to comment.

Müller added, "Our most important task will be to regain lost confidence with our customers, partners, investors and the general public. The first step in this direction will be a fast and relentless examination and explanation. Only when everything comes to the table, only when things are completely explained, only then will people trust us again.

"Believe me, I too am impatient. But in this situation, in which we are dealing with four brands and many models, care is more important than speed.

"The technical solutions to the problems are in sight. By contrast, the business and financial consequences are not yet foreseeable."

VW has already set aside 6.5 billion euros (Rs 49,686 crore) to cover the costs of the scandal, but many industry commentators believe that figure will rise, possibly to a figure three times higher. Since the scandal broke, VW's share price has fallen by almost half its value.