Scandal-hit VW seeks to rebuild trust with apology to Obama

Volkswagen chief executive Matthias Mueller said Thursday he had apologized to US President Barack Obama for his company's emissions-rigging scandal, as the embattled German carmaker tries to rebuild trust after the turmoil that has engulfed the group.

"I had about two minutes for the conversation and apologized for the episode," Mueller said at the group's annual press conference, adding that he told Obama he would find a solution to the crisis.

Mueller spoke to Obama during the president's two-day visit to Germany earlier this week when the US leader opened the Hanover trade fair.

VW last week unveiled the biggest loss in its 79-year corporate history after being forced to more than double its provisions to about 16.2 billion euros (18.3 billion dollars) to help pay for the emissions scandal that first emerged in the United States last year.

Of the total provisions, the company said on Thursday that 7.8 billion euros had been set aside to buy back or repair diesel-powered cars around the world that had been equipped with emissions tests cheating devices.

"I have asked that America build us a bridge," said Mueller, who also spoke to US Secretary for Trade Penny Pritzker in Hanover about the scandal, which has resulted in a hefty cost-cutting drive at its core VW brand as well as legal action, fines and vehicle recalls around the world.

VW last week hammered out a settlement with US authorities to compensate owners of the 580,000 US diesel cars, which were rigged to manipulate on the tests.

"The Volkswagen group is robust enough to withstand this financial burden," Mueller told the press conference, which was held in VW's sprawling headquarters in the northern German city of Wolfsburg.

Mueller said recalling and repairing cars equipped with the software to manipulate emissions tests "will remain our most important task until the very last vehicle has been put in order.

"We know that we have disappointed many people — people who have placed their trust in Volkswagen," Mueller said.

But he insisted: "Volkswagen is more than crisis."

The VW chief said the group now planned to develop mobility services such as car sharing and ride sharing so as to help the carmaker remain focused on future business opportunities.

The company also hopes to have 20 new electric car models on the road by 2020, he said.

But underlining the hurdles facing VW, Mueller was also forced to apologize for delays in fixing the 2.5 million diesel vehicles in Germany equipped with software aimed at cheating on exhaust tests.

"We are not as ready as we would like," Mueller said, noting that the group had been forced reconsider its schedule for recalling affected vehicles in Germany after a planned recall of Passat diesel models had been hit by delays.

The company's annual report also said that Mueller's predecessor, Martin Winterkorn, who stepped down from the chief executive post last October as the scandal unfolded, received a compensation package of 7.3 million euros in 2015, including 5.9 million euros for performance-related bonuses.

After posting a 10.85-billion-euro profit in 2014, VW reported a 1.58-billion-euro net loss last year after it admitted in September to installing software to manipulate emissions tests in about 11 million vehicles worldwide.

Despite the emissions scandal crisis, VW overtook Japan's Toyota Motor Corp to become the world's biggest carmaker by sales in the first three months of 2016, helped by a strong performance of the German group's business in China.

VW's earnings before interest and tax (EBIT) in China climbed to 5.21 billion euros last year, compared with 5.18 billion euros in 2014, the company said.

Last update: Thu, 28/04/2016 - 15:52
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