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 The admission by Michael Horn, in a written testimony to a
congressional oversight panel a day ahead of Thursday's hearing, is
likely to raise questions about why the German company did not act
more quickly to tackle its wrongdoing.
Almost three weeks after it confessed publicly to rigging U.S.
emissions tests, Europe's largest carmaker is under huge pressure to
identify those responsible, fix affected vehicles and clarify
exactly how and where the cheating happened.
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.
"In the spring of 2014 ... I was told that there was a possible
emissions non-compliance that could be remedied," Horn, President
and CEO of Volkswagen Group of America, said in his statement
published on a U.S. House of Representatives website.
"I was also informed that the company engineers would work with the
agencies to resolve the issue," he said, without identifying the
people providing him with the information.
It was not until Sept. 3, 2015, that Volkswagen told U.S. regulators
it had installed so-called "defeat devices" in some diesel engines
to mask their true level of toxic emissions. U.S. regulators made
public the wrongdoing on Sept. 18.
Volkswagen has come under fire on both sides of the Atlantic for its
handling of the crisis, with lawmakers, investors and customers
saying it has been too slow to release information.
Analysts are still unsure how widespread the cheating was.
Germany's Sueddeutsche Zeitung newspaper reported on Thursday that
Volkswagen's manipulation software was switched on in Europe.
The company has previously said that, while the software was
installed in around 11 million diesel vehicles, mostly in Europe, it
was not active in the majority of them.
Volkswagen did not respond to requests for comment.
IN-HOUSE
Volkswagen has suspended more than 10 senior managers, including
three top engineers, as part of an internal investigation. It has
also hired U.S. law firm Jones Day to conduct an external inquiry.
But some analysts have questioned whether new Chairman Hans Dieter
Poetsch and new CEO Matthias Mueller, both company veterans, will
introduce the sweeping changes in business practices they think are
necessary to restore Volkswagen's reputation.
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Poetsch said on Wednesday it would take "some time" to get to the
bottom of the matter.
The company, controlled by the Piech-Porsche clan, is not drawing on
outside public relations and restructuring experts to help with
damage-limitation efforts or its plans for a new company structure,
one source close to the board said.
"There’s a strong tradition to handle such matters in-house," the
source said, adding the company was also unlikely to draw on outside
experts as it reviews investment plans and steps up cost savings to
help meet the cost of the scandal.
UBS analysts have estimated Volkswagen could face a bill of around
35 billion euros ($40 billion) to refit cars, pay regulatory fines
and settle lawsuits, though they also say this is more than factored
into the stock price after its plunge.
The crisis has been a major embarrassment for Germany, which has for
years held up Volkswagen as a model of the country's engineering
prowess and looks to the car industry as a source of export income
and an employer of more than 750,000 people.
Economy Minister Sigmar Gabriel on Thursday urged Volkswagen to be
pro-active in addressing its problems, but also said critics should
not overstep the mark.
"There should not be a debate about the automotive industry or about
diesel technology," Gabriel said after attending a meeting of
Volkswagen's world workers council.
European carmakers rely heavily on diesel vehicles, which account
for about a half of new sales in Europe compared with only a small
fraction in the United States.
Horn, reaffirmed in his position by Volkswagen on Sept. 25, also
said in his testimony Volkswagen had withdrawn its U.S.
certification application for some model year 2016 vehicles over a
software feature that should have been disclosed to regulators as an
auxiliary emissions control device.
(Additional reporting by Reuters bureaus; Writing by Mark Potter;
Editing by Sonya Hepinstall)
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