VW Diesel Scandal to Inflict ‘Substantial and Painful’ Financial Damage: CEO

Volkswagen’s diesel emissions scandal continues to get worse. 

VW Group CEO Matthias Mueller knows that the scandal is only set to cost the brand more money and said that it will keep VW busy “for a long time.”

Job cuts in the U.S. and in Europe will depend directly on how large the fines are that land on VW according to VW’s works councils chairman Bernd Osterloh, who says there could be “dramatic social consequences.” The U.S. Justice Department alone has sued Volkswagen for up to $46 billion while German prosecutors have expanded an investigation into the matter.

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Stephan Weil, prime minister of the state of Lower Saxony, Volkswagen’s second-largest shareholder, is also expecting things to get worse. “We will this year probably every now and then be confronted with unpleasant news related to dieselgate,” said Weil. “The damage will, on balance, not be minor, that much can already be said today, but Volkswagen luckily has a strong economic base,” he said.

The probe into the emissions scandal is now investigating 17 employees, up from an original investigation of six, though none are from the management board.

VW initially set aside 6.7 billion Euros to cover the costs of the recalls, though that figure was not likely enough to cover all of the fines and compensation payouts.

[Source: Reuters]

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