Pages Navigation Menu

Car and Truck Parts Unlimited

Your Source to find the best deals on parts and accessories

Horn Admits VW Committed “Criminal” Acts, Diesel Fix to Take 2 Years

German police raided the Volkswagen Group’s headquarters and employee residences in Wolfsburg, seizing documents and digital records as the automaker’s top U.S. executive was being grilled Thursday on Capitol Hill.The fraud and cover-up in the rigging of VW diesel engines to meet U.S. nitrogen oxide emissions standards were “criminal” acts, Volkswagen of America CEO Michael Horn admitted during some three hours of questioning by the House Energy and Commerce Committee’s Oversight and Investigations subcommittee.

“This company had bloody well get its act together,” Horn told the subcommittee. The German-born executive stepped into running the U.S. operation in January 2014. He said he became aware that VW’s diesel cars could be out of compliance in April 2014 after learning of West Virginia University’s study on the cars, but he stated he only became aware of software designed to fraudulently beat the EPA test last month. Horn admitted he believes the motivation of those responsible was to meet cost objectives. “I think it’s dead wrong if you put corporate profits before people,” he told Congress.
VW is “looking into” how to properly compensate VW owners of diesel cars affected by the recall and investigation, Horn said. To begin, dealers are being granted free financing to carry unsellable TDI diesel vehicles on their lots, and a $2,000 loyalty rebate has been added to help dealers close sales with returning VW customers.
Michael Horn 02

Some news reports on Thursday indicated that Volkswagen would cut back or eliminate its diesel TDI lineup in the U.S. for 2016, and that it was not even seeking EPA certification for its diesel vehicles. A VW of America spokesman said those reports are wrong, and the company will seek all necessary certifications for its 2016 TDI vehicles, but that it was too soon to determine how long it will take. “We expect to certify 2016 diesel vehicles, and are going through all the regulatory procedures,” the spokesman said.
Horn faced members of Congress who were plainly hostile to his answers and to the public statements of VW executives since the scandal broke last month.
“I categorically reject everything VW is saying about a couple of rogue engineers [being responsible]. It goes way, way higher than that,” said Rep. Chris Collins, R-N.Y.
Collins tore into Horn, suggesting that VW senior executives must have thought the engineers had solved the emissions failure that had previously stumped them with “pixie dust.” “The company’s word isn’t worth a dime,” said Rep. Jan Schakowsky, D-Ill.
Another committee member said he wanted to know what Horn knew “and when he knew it,” invoking the question then-Sen. Howard Baker asked John Dean during the 1974 Watergate Hearings about President Nixon’s culpability.
Before lighting into Horn, several of the members of the committee waxed about their love of the VW Beetles that were their first cars. Subcommittee chairman Tim Murphy, R-Penn., prefaced his questions by talking about his first Beetle. Diana DeGette, D-Colo., talked about her first car being a Beetle “ragtop” inherited from her grandmother. Another subcommittee member invoked the old “Fahrvergnugen” ad campaign.
Volkswagen is facing a multi-front political, financial, and criminal onslaught of inquiries in multiple countries. It has retained global law firm Jones Day to represent itself in the U.S. where the criminal and governmental inquires began. Volkswagen of America is drawing on extra counsel from public relations agency Edelman Communications to cope with crisis communications. Some analysts estimate VW will eventually spend $1 billion on legal services alone.
2011 Volkswagen Jetta TDI Front Three Quarter 1

Congressional inquisitors urged Horn and Volkswagen to consider customer compensation ranging from buying back vehicles at full price paid (not just residual value) to providing loaner cars to customers who do not want to drive their TDI vehicles until they get fixed. Horn rejected the second idea, referring to the EPA’s statement that the cars, even those with the defeat device designed to fake emissions test results, are “safe and legal to drive.”
Buying back all the VW diesels sold in the U.S. since the 2009 model year would cost the company about $7 billion, Kelley Blue Book estimates. KBB says the average value of the 2009-’15 diesel models has fallen 13 percent since the scandal was made public last month, erasing nearly $1,700 in value per vehicle.
Recalling and fixing some 482,000 vehicles in the U.S. could take up to two years, Horn said, and repair parts and procedure probably won’t be available until early 2016. The fix, he said, will probably involve adding urea tanks to pre-2015 2.0-liter diesel engines that do not have them. The 2012-’15 model year Passat diesels were built with urea tanks, but they too have been implicated in the cheater-software scheme.
The 2009-’15 Volkswagen Jettas, Jetta Sportwagens, Golfs, and New Beetle TDIs did not have urea tanks, and, in some cases spewed 40 times the NOx allowed by the EPA. Like the 2012-’15 Passats, starting in the ’15 model year, Jettas, Golfs, Golf Sportwagen, and New Beetle TDIs have urea tanks to help meet the EPA’s 2017 standards, so some VW insiders questioned why those cars were programmed with the software to pass the EPA test in the first place.
Volkswagen has admitted that as many as 11 million diesel vehicles worldwide may have software designed to make the cars run much cleaner in emissions tests than they did in real-world driving.
The company has so far set aside $7.3 billion to settle issues arising from the tests but analysts believe the figure could become far higher. Investment bank Credit Suisse’s worst-case scenario puts total costs at $87 billion.