As Volkswagen scraps all non-urgent investments, chief executive Matthias Muller admits: “This will not be painless”
Beleaguered car manufacturer Volkswagen is to cancel or delay all its non-urgent investments, City PM understands.
The company is trying to cut costs after the emissions scandal, during which billions have been wiped off its value.
New chief executive Matthias Mueller, who replaced Martin Winterkorn at the end of September, told some 20,000 workers at the company's Wolfsburg factory: “We will review all planned investments, and what isn’t absolutely vital will be cancelled or delayed.”
“I will be completely clear: this will not be painless.”
He added that “we must make massive savings to manage the consequences of this crisis”, but said the company will "do everything we can” do protect jobs.
Mueller promised workers a "swift and relentless clarification" of what went wrong, and said: “We can and we will overcome this crisis, because Volkswagen is a group with a strong foundation. And above all because we have the best automobile team anyone could wish for.
“Our most important task will therefore be to win back the trust we have lost – with our customers, partners, investors and the general public.”
The company said it would be completely reviewing its efficiency programme, and looking at the board's bonus payments.
Mueller said the company was within sight of a solution, and VW has been exploring options from a software upgrade to completely replacing some cars.
Most analysts agree that the €6.5bn (£4.8bn) VW said it would set aside to deal with the costs of the scandal, which involves some 11 million cars worldwide, is not enough.
Today it was revealed that eight million cars in the EU alone have the emissions-test "defeat device" installed.
VW could face a maximum fine from the EPA alone of $18bn (£11.9bn), which would almost wipe out its cash balance.
Last week Betway offered 20/ 1 odds that the company will cease trading by the end of 2016.