Wolfsburg, November 2, 2015 – The United States Environmental Protection Agency (EPA) informed Volkswagen Aktiengesellschaft on Monday that vehicles with V6 TDI engines had a software function which had not been adequately described in the application process. Volkswagen AG wishes to emphasize that no software has been installed in the 3-liter V6 diesel power units to alter emissions characteristics in a forbidden manner.

Volkswagen will cooperate fully with the EPA clarify this matter in its entirety.

Volkswagen Group Communications

Use our VIN look up tool to find out if your 2.0L TDI vehicle is affected by the emissions issue.

http://www.vw.com/content/vwcom/en/owners-recalls.html

Testimony of Michael Horn, President and CEO of Volkswagen Group of America, Inc. Before the House Committee on Energy and Commerce Subcommittee on Oversight and Investigations October 8, 2015

Chairman Upton, Chairman Murphy, Ranking Member Pallone, Ranking Member DeGette, other Members of the Committee, thank you for inviting me to testify before the Committee today.

My name is Michael Horn, and I am the President and CEO of Volkswagen Group of America, a subsidiary of Volkswagen AG, headquartered in Wolfsburg, Germany. I have volunteered to come before this Committee at the very outset of these inquiries in an effort to show our commitment to cooperation. We have not had the opportunity to review all aspects of this matter, indeed the investigation is just beginning. Therefore, my testimony and my answers to your questions will, by necessity, have to be considered preliminary and based on my best current recollection and information.

On behalf of our company, and my colleagues in Germany, I would like to offer a sincere apology for Volkswagen’s use of a software program that served to defeat the regular emissions testing regime.

In the spring of 2014 when the West Virginia University study was published, I was told that there was a possible emissions non-compliance that could be remedied. I was informed that EPA regulations included various penalties for non-compliance with the emissions standards and that the agencies can conduct engineering tests which could include “defeat device” testing or analysis. I was also informed that the company engineers would work with the agencies to resolve the issue. Later in 2014, I was informed that the technical teams had a specific plan for remedies to bring the vehicles into compliance and that they were engaged with the agencies about the process.

On September 3, 2015, Volkswagen AG disclosed at a meeting with the California Air Resources Board (“CARB”) and the U.S. Environmental Protection Agency (“EPA”) that emissions software in four cylinder diesel vehicles from model years 2009-2015 contained a “defeat device” in the form of hidden software that could recognize whether a vehicle was being operated in a test laboratory or on the road. The software made those emit higher levels of nitrogen oxides when the vehicles were driven in actual road use than during laboratory testing.

In Volkswagen’s recent ongoing discussions with the regulators, we described to the EPA and CARB that our emissions control strategy also included a software feature that should be disclosed to and approved by them as an auxiliary emissions control device (“AECD”) in connection with the certification process. As a result, we have withdrawn the application for 2 certification of our model year 2016 vehicles. We are working with the agencies to continue the certification process.

These events are deeply troubling. I did not think that something like this was possible at the Volkswagen Group. We have broken the trust of our customers, dealerships, and employees, as well as the public and regulators.

Let me be clear, we at Volkswagen take full responsibility for our actions and we are working with all relevant authorities in a cooperative way. I am here to offer the commitment of Volkswagen AG to work with this Committee to understand what happened, and how we will move forward. EPA, CARB, the U.S. Department of Justice, State Attorneys General, as well as other authorities, are fulfilling their duties to investigate this matter.

We are determined to make things right. This includes accepting the consequences of our acts, providing a remedy, and beginning to restore the trust of our customers, dealerships, employees, the regulators, and the American public. We will rebuild the reputation of a company that more than two million people worldwide, including dealers and suppliers, rely upon for their livelihoods.

Our immediate goal is to develop a remedy for our customers. While much work is still to be done, I’d like to talk today about how we get from where we are now to that goal.

First, we are conducting investigations on a world-wide scale into how these matters happened. Responsible parties will be identified and held accountable. Thorough investigations have already begun, but any information developed at this stage is preliminary. We ask for your understanding as we complete this work.

Second, it is important for the public to know that, as the EPA has said, these vehicles do not present a safety hazard and remain safe and legal to drive.

Third, technical teams are working tirelessly to develop remedies for each of the affected groups of vehicles. These solutions will be tested and validated, and then shared with the responsible authorities for approval. There are three groups of vehicles involved, each containing one of the three generations of the 2.0L diesel engine. Each will require a different remedy, but these remedies can only be our first step for our customers.

Fourth, we will examine our compliance, processes, and standards at Volkswagen and adopt measures to make certain that something like this cannot happen again.

Fifth, we commit to regular and open communication with our customers, dealers, employees, and the public as we move forward. As first steps, we have set up a designated service line and website to be a channel for this communication, and I have sent a letter to every affected customer.

I can offer today this outline of a path forward toward the goal of making things right. Nevertheless, Volkswagen knows that we will be judged not by words but by our actions over the coming weeks and months.

These events are fundamentally contrary to Volkswagen’s core principles of providing value to our customers, innovation, and responsibility to our communities and the environment. They do not reflect the company that I know and to which I have dedicated 25 years of my life. It is inconsistent that the company involved in this emissions issue is also a company that has invested in environmental efforts to reduce the carbon footprint in our factories around the world.

Volkswagen Group has a deep commitment to preserving our environment. As one of the world’s largest automobile manufacturers, our commitment to the environment extends throughout every aspect of our business in the more than 150 countries in which we operate. For example, here in the United States, Volkswagen’s manufacturing facility in Chattanooga, Tennessee serves as a model for Volkswagen plants around the world for increasing energy efficiency and reducing emissions, water, and materials usage and waste. In recognition of the plant’s efficiency, Volkswagen Chattanooga received a platinum certification from the U.S. Green Building Council’s Leadership in Energy and Environmental Design (“LEED”) program. The facility is the first and only automotive manufacturing plant in the world to receive the Platinum Certification. As environmental protection and sustainability are central to Volkswagen’s core values, these events have been particularly troubling. Our conduct in the events that bring us here today belittle the efforts of Volkswagen to lead in environmental responsibility.

Over the 60 years Volkswagen has been in the United States, it has become part of the American culture. There are more than 6,000 Americans employed directly by Volkswagen Group of America in its 60 facilities across the United States: from a customer relations center in Auburn Hills, Michigan and a testing lab in Golden, Colorado, to a parts distribution center in Haslet, Texas, and our state-of-the-art manufacturing facility in Chattanooga, Tennessee. That factory, alone, employs more than 2,200 people and is expanding. We are part of communities all across the country. Thousands more hardworking men and women are employed at our parts suppliers and the network of about 1,000 dealerships across the United States.

In closing, I again apologize on behalf of everyone at Volkswagen. We will fully cooperate with all responsible authorities. We will find remedies for our customers, and we will work to ensure that this will never happen again.

Thank you again for allowing me to testify today, and I look forward to your questions.

Volkswagen’s supervisory board will hold an extraordinary meeting on Wednesday at which finance chief Hans Dieter Poetsch is expected to be appointed as new head of the 20-member controlling panel, two sources said on Sunday.

Europe’s biggest carmaker faces the worst business crisis in its 78-year history after it admitted cheating diesel emissions tests in the United States, with 11 million vehicles affected worldwide.

As well as appointing Poetsch, the board meeting on Wednesday will discuss the latest findings of VW’s internal investigation which has already led to more than 10 suspensions of senior managers, a source close to the board said.

Poetsch was originally due to be named to the supervisory board at an extraordinary general meeting planned for Nov. 9 but Volkswagen said on Thursday that would be pushed back.

At an internal company meeting last week at the VW headquarters in Wolfsburg, Poetsch described the situation as an “existence-threatening crisis for the company” albeit a surmountable one, the Welt am Sonntag newspaper reported.

Volkswagen took out full pages in the Bild am Sonntag and Frankfurter Allgemeine Sonntagszeitung newspapers, replacing what it said should have been an advert celebrating the 25th anniversary of German reunification with this message: “We will do everything possible to win back your trust.”

FAQs

·        Are the news reports of this “defeat device” true?

Government regulations limit the use of engine software that reduces the effectiveness of a vehicle’s emissions control systems.  Those are the “defeat device” regulations, and regrettably, VW violated those regulations.  We take full responsibility – and deeply regret that this happened.

·        Which models are impacted?

The following 2.0L 4-cylinder TDI equipped vehicles are involved:

• VW Jetta TDI (Model Years 2009 – 2015)
• VW Jetta SportWagen TDI (Model Years 2009-2014)
• VW Golf TDI (Model Years 2010-2015)
• VW Golf SportWagen TDI (Model Year 2015)
• VW Beetle TDI and VW Beetle Convertible TDI (Model Years 2012 – 2015)
• VW Passat TDI (Model Years 2012-2015)

·        Is my vehicle safe to drive?

It’s important to emphasize that this is an emissions issue and your vehicle is safe to drive.

·        Is there a stop sale on TDI models?

Right now, we’ve put a stop sale on all 2.0L 4-cylinder TDI equipped vehicles (new and certified pre-owned) and we’re working with the responsible agencies to obtain approval for the MY16 2.0L TDI vehicles. We are working very hard to get our 4-cylinder TDI business re-started as soon as possible.

·        How soon will the remedy be available, and how am I going to be compensated for this?

We cannot offer a firm date now because we need to work on the remedy and review it with the government. We are proceeding as quickly as possible.

·        Am I at risk for not passing the emissions test for my state?

We don’t anticipate that customers will have any issues with state registration or inspection. However, any customer encountering such an issue is urged to call VW Customer CARE at

800-822-8987

·        I want to turn in my vehicle – can I and how?

We are cooperating closely with the regulatory authorities to develop a remedy as quickly as possible.  We ask for your patience as we work to get this done