Dieselgate: Out Come the Wolves

Fixes for VWs are en route, but so are the lawyers.

Krisztian Bocsi/Bloomberg via Getty Images

Volkswagen may have set aside $7.3 billion to bury #dieselgate, but even that sum might not be enough if class-action and government lawsuits come rolling off the line.

Fixes coming soon

Volkswagen has one week before the German transport ministry demands answers. The automaker said it would notify customers within “the next few days” to bring in their cars to make them emissions-compliant by the end of October. The company has not specified what, beyond disabling the cheat software, it will do to bring the 11 million identified cars into compliance, or which customers would have priority. Europe’s comparatively relaxed diesel emissions laws may mean VW is already legal on the Continent, but it won’t be so easy in the U.S., especially if the modifications make owners top up their TDIs every few thousand miles with exhaust treatment fluid.

Clean diesel tax credits

In 2009, Americans buying certain German diesels could claim federal tax credits just like for hybrid and electric cars. Basically, the Feds wrote off $1,300 each time someone bought a Jetta TDI—to an incentive total of about $5 million, according to Reuters. While the credits expired in 2011, it’s very likely Uncle Sam will want his money back, and then some. Consider it just another legal strategy in the government’s playbook.

More U.S. oversight

As part of VW’s top-to-bottom house cleaning, CEO Matthias Müller has regrouped the U.S., Mexican and Canadian divisions under the newly named Volkswagen North American Region. VW called it “a further measure in the process of decentralizing managerial responsibility,” or rather, a swift kick in the arse for VW’s American bosses, who had been criticized by former CEO Ferdinand Piëch for underperforming in the world’s most competitive car market. Former Sköda CEO Winfried Vahland will take over North America on Nov. 1, while Michael Horn will remain CEO of VW USA.

Audi under investigation

With Audi admitting it installed the software cheat on 2.1 million cars, it only took a few hours for local prosecutors in the luxury brand’s Ingolstadt H.Q. to make a case. A Reuters report quoting a German newspaper said the lawyers are “reviewing all the facts” before opening an official investigation. State prosecutors are also investigating ousted CEO Martin Winterkorn for possible fraud.