VW’s Efforts to Make Amends Include ‘Personal Apology’ to President Obama

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Volkswagen has gone from being blindsided to becoming solicitous since the beginning of Dieselgate.

New details are emerging of how little clue VW management had last fall of the trouble the diesel-emissions scandal would end up causing them and the company. The debacle had CEO Matthias Mueller apologizing personally to President Barack Obama on Thursday, presumably in part so that Obama would keep a leash on US federal regulators who would like to make this long, hard episode even harder for the company.

At VW’s delayed annual meeting and press conference, Mueller struck a hopeful tone, with the idea that a financial deal with American regulators and a new business plan due later this year spelled light at the end of the tunnel for the German giant. He promised that VW “will emerge from this situation stronger than before,” noting that regaining trust will be the company’s most important task “over the next few months” and said that 2016 will be a “year of transition” for VW.

Mueller also took pains to note Volkswagen’s intention to develop “mobility services” such as car sharing and ride sharing, as its rivals are doing, and highlighted plans to build three “Volkswagen Group Future Centers” for technology development in Potsdam, Germany; Silicon Valley; and Beijing.

“We are all agreed that we can make it, that we have potential,” VW Chief Financial Officer Frank Witter said, according to Reuters. “Now we have to do our homework, we have to clean up, and then we can go forward again.”

Still, the annual day of reckoning for VW revealed plenty of vulnerability to Dieselgate in the months ahead. The company figures it may end up with fines and owner compensation totaling much less than the $18 billion it set aside on the 2015 balance sheet. But at the same time, the company’s annual report acknowledged that Volkswagen may have to sell some assets to pay the ultimate costs of putting the scandal behind it. None of its 12 brands would go on the block, VW said.

Meanwhile, VW has commenced the recall of the first wave of diesel-powered Golfs in Europe—about 15,000 cars in total—even as it is still working out how to fix up to 600,000 VW and Audi models in the US. Its shares remain about 20 percent lower than when the scandal erupted and the company must continue to cut costs everywhere.

The fact remains that VW’s brain trust had no idea as the scandal was breaking last fall that any of this possibly could result. According to the automaker’s initial assessment, executives figured Dieselgate and “the scope of the costs” would be “not dissimilar to that of previous cases in which other vehicle manufacturers were involved.”

But it looks as though Dieselgate will ultimately trump General Motors’ ignition-switch calamity and Toyota’s unintended-acceleration disaster in costs to the company—not only in direct finances but in loss of sales and brand equity.

This is the case particularly in the US, where just three years ago, VW was hoping that a line of new products, a new assembly plant in Tennessee, and rising sales and market share meant the Volkswagen brand finally could get over the hump in an American market that remained crucial to its long-term plans.

Thus a humble Mueller met with Obama on the sidelines of the industrial fair in Hannover he was attending this week, not far from Volkswagen headquarters in Wolfsburg, for a couple of minutes.

“I used the opportunity to personally apologize to him for our behavior,” Mueller told journalists. “I thanked him for the constructive cooperation with his officials. Of course, I also expressed the hope that I will be able to continue to fulfill my responsibility to 600,000 [VW employees worldwide] and their families as well as suppliers and dealers.”

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