VW's 'chain of errors' to prove 'catalyst for change'

The VW Group plans to use the problems affecting it to push through positive changes, rather than let the company be crippled under the weight of the emissions scandal. The head of the group said: "We are doing everything to overcome the current situation, but we will not allow the crisis to paralyse us. On the contrary, we will use it as a catalyst to make the changes Volkswagen needs."

The statement was made at a press conference giving the first comprehensive update on investigations set-up in the aftermath of the emissions scandal. The announcements included the current situation regarding fixing those models with illegal emissions defeating software, at what stage internal investigations regarding culpability, and plans to restructure the company going forward.

Held today (Thursday 10th December) at Volkswagen's headquarters in Wolfsburg, the press conference saw Hans Dieter Pötsch, Matthias Müller (above) and Hans-Gerd Bode - Chairman of the Supervisory Board of Volkswagen, Chairman of the Board of Management for the Volkswagen Group, and Head of Group Communications respectively - speak about the problems that have been affecting the company and what is being done to combat them.

The biggest piece of news is the first confirmation from the company that the problems amount not simply to a handful of rogue employees with one-off consequences, but to a "chain of errors that were allowed to happen." Three factors have been determined by an audit - the misconduct and shortcomings of individual employees, weaknesses in some processes, and a mindset in some areas of the Company that tolerated breaches of rules.

According to Volkswagen, the starting point for the whole mess was: "A strategic decision to launch a large-scale promotion of diesel vehicles in the United States in 2005. Initially, it proved impossible to have the EA 189 engine meet by legal means the stricter nitrogen oxide requirements in the United States within the required timeframe and budget. This led to the incorporation of software that adjusted nitrogen oxide emission levels according to whether vehicles were on the road or being tested. Later, when an effective technical process was available to reduce NOx emissions, it was not employed to the full extent possible."

Senior management didn't attempt to hide behind anything when Pötsch stated: "No business transaction justifies overstepping legal and ethical bounds." He went on to confirm that nine managers have been suspended on suspicion of being involved in the manipulations, though no names were given on the basis of being innocent until found guilty.

The press conference went on to confirm the fixes planned for European engines announced just over a fortnight ago, and that solutions to the problem on American cars are still being finalised due to the stricter emissions levels. VW also announced that future models will have emissions tests evaluated independently.

VW Group Press Conference

Alongside the issues linked to the emissions scandal - both solving the problems found and determining who was responsible - it was confirmed that a new group structure would be put into place. This largely involves streamlining and improving efficiency throughout the group, making each section more autonomous and bringing companies together. The luxury brands for example will work together more closely than before to help cut costs. These plans were largely in place before the problems but VW admitted that they have been brought forward because of them.

Likewise, processes will change with group with senior figures allowed greater focus on certain aspects. For example, it has been revealed that Müller will now only receive reports from 19 heads of department, rather than the 30 previously.

On top of that, new positions are being created to tackle both problem and solution areas. A new head of Integrity and Law is being set-up with a voice on the Board of Management, and, as reported in early November, a Head of Digitalisation position has been created and is being led by a former Apple and Mercedes development chief.

Finally, VW is developing a new future strategy which will be presented in mid-2016 and will cover the company's aims up to 2025. This is expected to continue its fresh focus on electric vehicles, and includes a new way of thinking as a company. Müller said: "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."

For those who want to see the press conference with English translation, click on the video below.

Click here for more news from the VW emissions scandal »

Image courtesy of VW Group press conference

Chris Lilly

Author:Chris Lilly
Date Updated:10th Dec 2015

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