In Diesel Scandal Tailspin, Volkswagen Execs Admit Culture Problems

VW brass confess to tolerating a breach of rules; still no recalls for TDI engines.

TOBIAS SCHWARZ/AFP/Getty Images

Volkswagen execs admitted the diesel scandals were directly caused by a culture "that tolerated breaches of rules" in a press conference held in Germany on Thursday. Volkswagen AG Chairman of the Supervisory Board Hans Dieter Pötsch and CEO Matthias Müller also acknowledged that the Volkswagen ethos at the time was extremely intolerant to failure, yet allowed engineers to bend the rules in order to meet American emission standards.

Internal audits are expected to wrap up by the end of the month, while law firm Jones Day continues to sift through 102 terabytes of data and emails to determine who may be involved in the Volkswagen diesel scandal. So far, nine managers have been suspended while former CEO Martin Winterkorn and R&D boss Ulrich Hachenberg have already stepped down.

It has been almost three months since the EPA first issued violations against Volkswagen and the German company has assured the public it will dedicate its resources to find a fix and uphold its reputation. And while execs during the Tuesday Volkswagen press conference did give updates regarding recall timelines for select European-market diesel models, there have yet to be details regarding recalls for the American TDI engines.

According to Volkswagen, European 2.0 and 1.2 diesel models will only need a software update while the 1.6 model will get a new flow transformer to pass regulation. Recalls in Europe are expected to begin next month starting with the 2.0 TDI. Th 1.2 will follow during Q2 2016 while the 1.6 models should all be repaired by the end of next year. However, tighter regulations in America make a much bigger technical challenge for the TDI engines found in approximately 482,000 owners in America.

The company turned in its repair plan to the EPA and CARB, but the details of that plan have not been made public yet.

We've seen auto giants Toyota and General Motors founder amid recalls and other controversies, but it's difficult to recall a scandal so extensive it could require the fundamental restructuring of every department in a company. That said, Pötsch and Müller reemphasized the importance of the U.S. market and also announced that VW has no intention of selling any of its 12 brands, including Bugatti.