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 The 20-person board gathered at the German carmaker's headquarters
in Wolfsburg at around 9 a.m. (0700 GMT). Sources close to the
matter said talks were likely to last for hours.
More than two weeks after it admitted to cheating U.S. emissions
tests, Europe's largest carmaker is under pressure to identify those
responsible, to say how vehicles with illegal software will be fixed
and whether it also cheated in Europe.
The biggest business crisis in Volkswagen's 78-year history has
wiped more than a third off its share price, forced out its
long-time chief executive and sent shockwaves through both the
global car industry and the German establishment.
Germany's KBA watchdog has set Wednesday as a deadline for
Volkswagen to spell out plans to make its diesel vehicles comply
with emissions laws.
The company has said it may have to refit up to 11 million cars and
vans worldwide, and new CEO Matthias Mueller said in a newspaper
interview on Wednesday recalls would start in January and would be
completed by the end of 2016.
But owners are anxious to know whether the refits will affect the
fuel-economy and performance of their vehicles.
Volkswagen has said the illegal software was not activated on the
bulk of the 11 million vehicles, most of which are in Europe,
leaving uncertainty over whether it rigged tests there.
The German transport ministry has said it did manipulate European
tests too, but has not given details, making it unclear whether the
company faces the same level of fines and lawsuits in Europe as in
the United States. It is also unclear whether owners will be obliged
to have their vehicles refitted.
Equinet analysts said the cost of refits could range from less than
100 euros ($112) per vehicle to as much as 10,000 euros, depending
on whether Volkswagen needs to upgrade software or install new
hardware.
UBS analysts estimated the total bill for the scandal, including
potential fines and lawsuits, could be around 35 billion euros,
though they also noted this was more than factored into the
company's share price after its recent plunge.
"A CERTAIN DEGREE OF FRIGHT"
The supervisory board meeting, where erstwhile finance chief
Hans-Dieter Poetsch is being confirmed as the company's new
chairman, will receive an update from an internal investigation into
the scandal, two sources close to the matter said.
A representative from U.S. law firm Jones Day, which is conducting
an external inquiry, will also attend.
One of the sources said it was too early to name those responsible
for rigging tests, and talked of a "certain degree of fright" among
management ahead of a testimony by the company's top U.S. executive
before a U.S. congressional oversight panel on Thursday.
Volkswagen has come under fire in both the United States and
elsewhere for a slow response to the crisis.
"We have a lot of questions. We have very few answers," complained
Representative Diana DeGette of Colorado, the top Democrat for
subcommittee.
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Officials in Germany, where Volkswagen has been held up for years as
a model of the country's engineering prowess, are also pressing for
answers.
"I now expect a very transparent investigation of the circumstances.
I am convinced that we will get more and more clarity," Klaus Mohrs,
the mayor of Wolfsburg where Volkswagen employs around 70,000
people, told Reuters ahead of the supervisory board meeting.
Data on Wednesday showed German industrial output fell at its
steepest pace in a year in August, suggesting Europe's largest
economy may be losing momentum just as the Volkswagen scandal casts
a cloud over manufacturing.
The car industry employs more than 750,000 people in Germany and is
a major source of export income.
In his newspaper interview, Mueller rejected the suggestion
Volkswagen informed financial markets too late about the test
rigging despite having told officials at the U.S. Environmental
Protection Agency weeks before it went public.
"Based on our understanding of the law, we informed in time," he was
quoted as saying.
He also said he believed only a few employees were involved in the
manipulations.
Some analysts and investors are worried that company veterans such
as Mueller and Poetsch will not introduce the sweeping changes in
business practices they think are necessary to restore Volkswagen's
reputation.
They are also concerned about the complexity of Volkswagen's
investigations.
One source close to the matter said the supervisory board of the
company's flagship Audi brand would also meet this afternoon, and
has hired accountants to help investigate the scandal as well.
Audi is still chaired by former Volkswagen CEO Martin Winterkorn,
who resigned two weeks ago. The sources said it was unclear whether
he would attend the Audi board meeting.
(Additional reporting by Caroline Copley, Barbara Lewis, Jan
Schwartz and Reuters bureaus; Writing by Mark Potter; Editing by
Susan Thomas)
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