- Carmaker said to meet regulators Monday on diesel engine fix
- Volkswagen said to pursue financing as cushion for crisis
Volkswagen AG said 430,000 of its new cars had “implausible” carbon dioxide ratings as it continues talks with regulators in an attempt to address the emissions cheating crisis.
The figure means more than half of the roughly 800,000 affected vehicles were from the current 2016 model year. Volkswagen is still investigating previous model years and what the correct CO2 ratings should be, the Wolfsburg, Germany-based company said in a statement late Friday.
Meanwhile, the carmaker will present German authorities Monday with a fix for 1.6-liter diesel engines fitted with software to cheat tests for polluting nitrogen oxides, according to a person familiar with the plans, who asked not to be named because they aren’t public. The proposal isn’t as complex or expensive as Volkswagen initially feared and could be used across Europe if it’s approved in Germany, the person said.
Volkswagen is grappling for a way through a crisis that has engulfed the company since it first admitted to cheating on emissions in September. The carmaker will need to recall as many as 11 million diesel vehicles worldwide and admitted earlier this month that another 800,000 cars had unexplained inconsistencies in CO2 output. By 2017, the price tag on the emissions scandal will probably reach about 25 billion euros ($26.8 billion), Barclays Plc estimated on Friday.
“We will overcome this crisis, and Volkswagen will emerge stronger from the situation,” works council chief Bernd Osterloh told newspaper Sueddeutsche Zeitung on Saturday. Jobs will only be cut if fewer cars are sold. “At the moment sales are not pointing in that direction,” he told the German daily.
In addition to regulators, Volkswagen will meet banks on Monday as part of an effort to assemble as much as 20 billion euros in short-term bridge financing, people familiar with the matter have said. The extra funds could provide a financial cushion as Volkswagen seeks to reassure ratings agencies that it has enough liquidity to weather the crisis.
Volkswagen has the equivalent of 2.57 billion euros in bonds maturing this year, 14.3 billion euros next year and 13.5 billion euros in 2017. The company said Friday it has put bond financing on hold. Thus far, the automaker has set aside 6.7 billion euros to recall diesel cars and estimated the economic risk of the CO2 irregularities at another 2 billion euros.
Volkswagen’s automotive division had 27.8 billion euros in net liquidity at the end of the third quarter, with the carmaker categorizing about 10 billion euros of that as a buffer to support credit ratings. Fitch Ratings downgraded the company’s debt by two levels on Nov. 9, joining Standard & Poor’s and Moody’s Investors Service.