November 16, 2015
Perhaps you saw this ad when you opened your Sunday paper this past weekend: 
In an open letter to consumers, Volkswagen CEO Michael Horn issued a mea culpa for the diesel-engine emissions scandal that has affected approximately 11 million vehicles worldwide. While Horn pledged that VW will “make things right” through such initiatives as a customer goodwill program, the company’s public image continues to deteriorate in the eyes of many as it must now face its other scandal concerning C02 emissions. On Friday, the public learned additional details about the vehicles impacted by the C02 emissions crisis. An internal investigation revealed that about 43,000 VW vehicles from the current 2016 model year had “implausible” carbon dioxide levels. Among the affected 2016 model year vehicles cited by the automaker include certain VW, Audi, Skoda and Seat models. The scandal at Volkswagen intensified after the German automaker admitted earlier this month that it had understated the CO2 emissions levels of approximately 800,000 gas-guzzling vehicles. In a statement dated November 5, Volkswagen admitted “the CO2 levels and therefore the fuel consumption data published by Volkswagen for some models are incorrectly stated.” VW couldn’t guarantee that the previously reported CO2 emissions levels of its vehicles were accurate and suggested the figures may be subject to revision. As it did during its diesel-emissions crisis, VW will investigate the veracity of the C02 emissions data it currently has at hand and have their actions monitored by an independent agency. With that said, however, the fact that over half of the 800,000 affected models are new cars is a disturbing sign for a company that has claimed that its emissions-test tampering days are a thing of the past. Meanwhile, Volkswagen is taking things one crisis at a time. On Monday the company plans to meet with German regulators to devise a fix for its 1.6-liter diesel-engine vehicles. According to Bloomberg, VW insiders are breathing a sigh of relief that the proposed fixes won’t likely be as expensive or as complex as first feared. In addition to meeting with regulators, Volkswagen is also seeking approximately 20 billion euros in short-term bridge financing from banks near its Wolfsburg, Germany headquarters. According to insiders, the purpose of the funds is to provide “financial cushion” needed to pay for mounting legal fees and recall costs. It also allows the company to demonstrate its liquidity to ratings agencies so that they aren’t downgraded. So while Volkswagen says that it doesn’t need the money now, the cost of covering its diesel and CO2 emissions issues is sure to be substantive. Barclays Equity Research recently estimated the cost to Volkswagen of fixing the emissions issues to reach upwards of $26.8 billion by 2017. As always, read Auto Publishers for the latest updates on the Scandal at Volkswagen. Image Credit: Bild am Sonntag