Police raid VW headquarters as probe mounts in Germany, US

Corporate News

Photo/File Volkswagen Amarok.  

By AFP

In Summary

• The world's largest automaker sank into the deepest crisis of its history after revealing last month that it equipped 11 million diesel VWs and Audis with software that switches the engine to a low-emissions mode during tests.
• The raids came as Volkswagen's US chief Michael Horn faced a grilling before Congress, where he sought to distance himself from the scandal while blaming it on engineers in Germany.
• "Our plan is not to buy back the inventory. Our plan is to fix the cars," he said.

German police swooped on Volkswagen's headquarters on Thursday, carrying away files and hard disks as the investigation into a massive pollution cheating scandal expanded on both sides of the Atlantic.

Private apartments were also raided in Volkswagen's hometown of Wolfsburg and other cities, prosecutors told AFP, as police sought to secure documents and digital data that could point to those responsible for the deception of global proportions.

The raids came as Volkswagen's US chief Michael Horn faced a grilling before Congress, where he sought to distance himself from the scandal while blaming it on engineers in Germany.

Horn told a committee that he had learned in early 2014 that the group's ostensibly environmentally friendly diesel cars breached pollution rules.
But he said he did not know until last month that "defeat devices" had been installed deliberately in the vehicles to help them cheat US pollution tests.

When the emissions problem was first discovered by US university researchers last year, he said, "I had no understanding what a defeat device was. And I had no indication whatsoever that a defeat device could have been in our cars."

The world's largest automaker sank into the deepest crisis of its history after revealing last month that it equipped 11 million diesel VWs and Audis with software that switches the engine to a low-emissions mode during tests.

The software then turns off pollution controls when the vehicle is on the road, allowing it to spew out harmful levels of toxic gases.

Lance Armstrong Industry

The revelations have wiped more than 40 percent off Volkswagen's market capitalisation. The company risks billions of dollars in fines and lawsuit damages in several countries, as well as being forced to pay for fixes and to compensate dealers.

The group has set aside 6.5 billion euros ($7.3 billion) in the third quarter over the affair, but that would only likely cover repairs of affected vehicles.

The auto giant's Australia business on Friday announced a voluntary recall of more than 97,600 vehicles, including Audi and Skodas, fitted with emissions-cheating technology.

In the US, the company could be fined up to $18 billion by the Environmental Protection Agency alone.

"This is a whole lot of money, I'm quite sure," Horn told US legislators when asked about the costs of the fraud.

One congressman, Peter Welch, blasted the company, labelling it "the Lance Armstrong of the auto industry," after the champion cyclist shamed and banned for doping.

In Germany, prosecutors from Lower Saxony said raids were carried out to secure data that "can provide information about the exact conduct of company employees and their identities in the manipulation of exhaust emissions of diesel vehicles".