Volkswagen’s new chief executive warned Tuesday that the financial impact from the company’s emissions cheating scandal would be more damaging than previously acknowledged, saying the company would delay or cancel planned new investments and might have to cut jobs.
Volkswagen had already said that it would set aside $7.3 billion to cover the cost of bringing as many as 11 million affected vehicles into compliance with emissions standards.
“But that will not be enough,” Matthias Mueller, Volkswagen’s chief executive, told workers Tuesday at the company’s main factory in Wolfsburg, Germany.
Mueller said it was impossible to calculate the cost from penalties that Volkswagen was likely to face from governments, including that of the United States, or from lawsuits that are proliferating from unhappy customers and shareholders. For now, the company will delay or cancel new projects that are not considered essential, he said, according to a text of his remarks.
Mueller, who was appointed chief executive last month after his predecessor, Martin Winterkorn, resigned, also did not rule out job cuts stemming from the damage that Volkswagen has suffered financially and to its reputation after revelations that 11 million diesel cars, most in Europe and the United States, had software intended to fool emissions tests.
The company will do everything it can to preserve jobs, Mueller said, but he added: “All of this will not be painless.”
Mueller said a substantial number of high-ranking managers had been suspended in connection with what he promised would be a ruthless inquiry into who was responsible for the scandal.
He did not give the names of those executives suspended, but three of them — whose suspensions had been previously disclosed — are people associated with the development and deployment of the engines with the software.
Meanwhile, the House Energy and Commerce Committee will hold a hearing Thursday in Washington, seeking further details on how and why the German-based automaker cheated on U.S. and California emissions tests.