VW pursues $2B in cost cuts amid emissions scandal
Volkswagen Group reportedly has identified $2 billion in cost savings to help offset the cost of fines and recalls from the emissions-manipulation scandal battering the global automaker.
The Volkswagen brand, the company's largest vehicle unit, will feature fewer models and trim options in a bid to reduce labor costs and complexity, top company labor official Bernd Osterloh said Friday during a media briefing at Volkswagen headquarters in Wolfsburg, Germany, Bloomberg News reported.
Senior Volkswagen executives are expected to receive lower bonuses in a move related to the cost cutting, the report said.
Osterloh said reducing the variety of car models and options could enable Volkswagen to "take out costs there on a large scale" without forcing the company to cut jobs, Bloomberg reported. VW has one major U.S. factory, located in Chattanooga, Tenn.
Finding major production savings is viewed as crucial because potential buyers have been leery about buying new Volkswagens over uncertainty about the emissions scandal.
"There is caution in buying," Osterloh said, according to a separate Reuters report Friday.
Volkswagen faces financial fallout from a multi-front scandal involving millions of the company's cars and several of its brands. The company has admitted that software it installed on up to 11 million vehicles worldwide enabled those with 1.2-liter, 1.6-liter and 2-liter diesel engines to defeat clean-air standards testing.
VW emission cheating scandal spreads to more vehicles
The scandal expanded last week as the U.S. Environmental Protection Agency and California environmental regulators said the automaker admitted that its 3-liter V-6 diesel vehicles from the last seven years had violated emissions standards.
The findings cover all Volkswagen, Audi and Porsche U.S. vehicles with 3-liter diesel engines from the 2009 to 2016 model years — an estimated 85,000 autos nationwide — the regulators said.
California orders Volkswagen diesel car recall
The California Air Resources Board in a Wednesday letter gave Volkswagen 45 business days to submit a recall plan for the affected VW, Audi and Porsche models.
Volkswagen recently suspended two engineers after they changed earlier statements and acknowledged that software installed on the 3-liter V-6 diesel engines "can probably be considered a defeat device," The Wall Street Journal reported Friday.
In early October, soon after the scandal broke, Volkswagen CEO Matthias Mueller said the ultimate costs couldn't be quantified. However, he voiced conviction that VW would survive and ultimately win back the public trust.
"We can and we will overcome this crisis, because Volkswagen is a group with a strong foundation," said Mueller. "And above all because we have the best automobile team anyone could wish for."