Volkswagen Misses Own Deadline for Diesel-Cheating Report, Now Expected by End of Year

Volkswagen

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Ten days ago, a major milestone in the Volkswagen diesel cheating scandal was reached. On Thursday, April 21, VW and the EPA agreed on the broad-stroke outlines of a plan to buy back or modify for 482,000 2.0-liter TDI diesel cars sold from 2009 through 2015. Almost lost in the coverage of that news was the following day’s deadline for VW to issue its internal report on how the scandal happened — and who was responsible.

Volkswagen did not meet its own April 22 deadline to issue the report, prepared by the law firm of Jones Day after more than six months of investigation. “Based on the current assessment,” the company said in a statement, “Jones Day expects the investigation to conclude in the fourth quarter of 2016.”

Volkswagen

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Therefore, VW continued, its supervisory board and management board have “had to recognize that a disclosure of interim results of the investigation at this point in time would present unacceptable risks for Volkswagen and, therefore, cannot take place now.” Volkswagen “regrets” this decision, the statement said, which was made together with Jones Day and the company’s U.S. law firm, Sullivan & Cromwell. Each firm independently advised against release of the interim report.

The company also suggested that releasing the report on the announced date could interfere with both settlement negotiations in the U.S. and criminal probes into the scandal. Thus far, the internal investigation has received 65 million electronic documents, VW said, with more than 10 million forwarded to the lawyers for their inspection and review.

Roughly 450 interviews have been conducted so far, with dozens more expected.

Volkswagen plant

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In a report published before the delay was announced, Bloomberg said that data submitted to the investigators totaled 104 terabytes from more than 1,500 company computers and individual laptops.

“About 450 internal and external investigators have focused on about 20 employees linked to the deception,” Bloomberg wrote, citing “people familiar with the probe” as the source. Close to 500 separate investigators are focusing on about 20 individuals involved in the deception, the report suggested. The investigation, it continued, had been complicated by the use of “dozens of code words” in the internal documents.

Volkswagen engine

Source: Volkswagen

Unnamed company sources said the term “acoustic software” referred to the “defeat device” software that switched off emission controls during real-world use. Volkswagen’s 2015 financial results, which under German law had to be released by the end of April, significantly boosted the funds set aside for the costs of the scandal.

Shortly after the diesel cheating became public last September, the company set aside 6.7 billion euros ($7.7 billion), an amount widely thought to be insufficient. VW Group has now raised that total to 16.2 billion euros ($18.6 billion), though analysts have suggested the total costs could still be double the new, higher number.

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