VW's inquiry focused on development arm

3 reportedly put on forced vacation

John Swanton, spokesman for the California Air Resources Board, explains how a 2013 Volkswagen Passat with a diesel engine is evaluated at an emissions test laboratory in El Monte, Calif., late last month.
John Swanton, spokesman for the California Air Resources Board, explains how a 2013 Volkswagen Passat with a diesel engine is evaluated at an emissions test laboratory in El Monte, Calif., late last month.

BERLIN -- As Congress prepares to question Volkswagen officials in Washington over its manipulation of American emissions tests, German media are reporting the company itself is focusing on three suspended development managers.

Bild newspaper reported Sunday that Heinz-Jakob Neusser, head of development at VW, and engineers Ulrich Hackenberg and Wolfgang Hatz had been put on forced vacation in the wake of the scandal. Other newspapers had similar reports.

Hatz declined comment through a spokesman and neither of the other two responded to emails seeking comment. VW spokesman Eric Felber on Monday refused to comment on "various public speculation."

Bild reported that VW's internal investigation had turned up contradictory information on Hackenberg's possible involvement, while Hatz denied knowledge.

From 2002 to January 2007, Hackenberg was in charge of concept development, superstructure development and electronics at VW subsidiary Audi. In 2007 he was appointed a member of the VW brand's board for development, and has been a member of Audi's management board since July 2013. He had responsibility for technical development of all of the VW group's brands.

Hatz joined the VW group in 2001 and served as head of engines and transmissions development at Audi until 2009, while assuming the same function at VW in 2007. In February, 2011 he became a member of Porsche's board of management in charge of research and development and is also head of engines and transmissions development for the Volkswagen group.

VW and Porsche merged in 2012 after years of wrangling.

Neusser was in charge of drivetrain development of Porsche from 2001 to 2011 before joining VW to head powertrain development there, taking over the job for the whole Volkswagen group in 2012. The next year, he was named management board member for the Volkswagen brand in charge of development.

VW's top manager in the U.S., Michael Horn, is to testify before Congress on Thursday.

People familiar with Volkswagen's plans say the company is exploring options from a simple software upgrade to outright replacing cars as a deadline approaches to present a fix for 11 million rigged diesel vehicles.

Swapping out the affected models for new ones is the most extreme in a range of options the carmaker is discussing ahead of talks with regulators, including a Wednesday deadline to present a plan in Germany, the people said. Other possibilities include installing bigger catalytic converters to store and neutralize harmful emissions, said the people, who asked not to be identified because the plans aren't final.

Cost estimates of the alternatives range from as little as $22 to as much as 10,000 euros ($11,189) a car, one of the people said. The solution will probably vary from regulator to regulator, meaning this week's German plan won't necessarily apply elsewhere, said the person.

Volkswagen needs to upgrade cars from its namesake brand as well as the Audi, Seat and Skoda brands after being forced to admit it had used software to hoodwink U.S. regulators about the true emissions of its diesel vehicles for years. Though the scandal became public in the U.S., most of the vehicles were sold in western Europe, where tax incentives and lower fuel costs have added to diesel's popularity. Diesel engines accounted for more than half of new vehicle registrations there last year, according to the European Automobile Manufacturers Association.

The carmaker's stock has plunged 42 percent since the revelation on Sept. 18 of the emissions-test cheating. Volkswagen hasn't said how any repairs could affect vehicles' performance, such as fuel economy.

"We need a clear statement from VW -- and regulators -- about the European situation," Max Warburton, an analyst at Sanford C. Bernstein Ltd., said in a note to investors on Monday. If recall costs, including scrapping cars, fines and other penalties, are limited to the U.S., "the damage can be contained."

Information for this article was contributed by The Associated Press and by Elisabeth Behrmann and Tommaso Ebhardt of Bloomberg News.

Business on 10/06/2015

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