Scandal-Plagued VW Will Trim Spending By A Billion Euros

Volkswagen has denied that the software allows the cars to cheat on emissions tests.

On Friday he announced plans to reduce the company’s annual capital expenditures from $13.9 billion to$12.8 billion.

The meeting Thursday was meant to hammer out a plan for Volkswagen to bring its diesel cars into compliance in the U.S. Previously, Volkswagen admitted to rigging some 11 million VW and Audi cars around the world to pass government emissions tests while still emitting far more than the legal limit of the harmful pollutant NOx while on the road. VW initially denied the findings.

Volkswagen spokeswoman Jeannine Ginivan declined to comment Thursday on the prospects of a U.S. buyback for some of the diesel vehicles.

Volkswagen explained it would cap spending on property, new plant construction and equipment in 2016. The company estimates the scandal will cost it at least 8.7 billion euros.

“You can’t recover from a scandal while it’s still growing”.

Audi and Volkswagen are following Porsche in halting sales of models equipped with the 3.0-liter diesel V6 engine that the U.S. Environmental Protection Agency (EPA) now says is equipped with “defeat device” software, a new report says. The EPA said in a statement Friday night that VW had turned in its proposed fix, but the agency wouldn’t give details. The automaker added that it is “committed to making things right and regaining the trust of our valued customers”. But VW did not submit its formal plan at the meeting.

The company is working on a more comprehensive spending overhaul as part of a new strategy Chief Executive Officer Matthias Mueller intends to unveil next year, said one of the people, who asked not to be named because the talks are private.

Europe’s largest automaker is cutting capital spending for the first time since the 2009 financial crisis and will review or delay non-product investments.

“We will strictly prioritize all planned investments and expenditures…” They have suggested the emissions scandal could provide an opportunity for management to force through changes that otherwise might have been resisted by the company’s influential trade unions.

VW’s preference shares, down about 34 percent since the crisis broke, were up 1.6 per cent to 107.55 euros at 1240GMT.

In terms of model ranges, it said the successor to the Phaeton – a pure-play electric model – is now being delayed.

Sources quoted in the reports said that the probe is at an early stage and that there is no indication that United States prosecutors have found evidence of wrongdoing at Bosch.