This morning, Reuters reports that Volkswagen plans to issue a worldwide recall for all 11 million diesel vehicles equipped with software designed to cheat on emissions tests.
That in itself isn’t too surprising. For a problem this big, a deception this egregious, VW would be expected to repair the affected vehicles.
No, what’s surprising is that VW plans to begin the recall process “in the next few days”.
THE BEGINNING OF THE END?
The announcement was made by Volkswagen’s brand-new CEO, Matthias Muller, who took the corner office last Friday after longtime occupant Martin Winterkorn, was forced out. Clearly, Muller is trying to fast-track VW’s rebound from international laughingstock to “world’s biggest automaker”.
Unfortunately, the road to recovery is likely to be very, very bumpy.
For starters, there will be many, many investigations. Volkswagen installed its deceptive software on vehicles sold in the U.S., Germany, Australia, Sweden, and other countries, which translates into multiple probes, multiple testimonies, multiple legal fees, and in all likelihood, multiple fines.
In the process, the scope of the scandal may broaden. We’ve already learned that 2.1 million Audi vehicles are equipped with the emissions-test-cheating software, as are 1.2 million made by Skoda. What other revelations will there be — especially in the wake of increased scrutiny from regulators around the globe?
And last but certainly not least, there’s the problem of the repair itself, which could spawn an entirely new wave of headaches for VW.
As we discussed yesterday, there’s no easy fix for the diesel emissions issue. Yes, VW and Audi can upgrade the software on their vehicles — and that seems like what they’re planning.
In doing so, however, the new software will likely engage all the vehicles’ emissions controls, which will bring the cars in line with federal regulations, but also diminish fuel economy. And that presents a whole new set of problems in the form of class-action lawsuits from customers mad about their missing MPGs — not to mention diminished resale value of their vehicles.
Volkswagen has set aside a massive chunk of change to resolve the “Dieselgate” issue — somewhere between $6 billion and $7.5 billion. By the time that the company slogs through all these probes, fixes, fines, and lawsuits, though, we’re not sure that’ll be enough.