- Thursday meeting could be VW's `first significant watershed'
- Briefing in Wolfsburg follows CEO trip to No. 3 shareholder
Volkswagen AG will provide initial results of an internal investigation into emissions manipulation on Thursday, a sign that the automaker is coming to grips with the crisis after nearly three months.
The investor briefing and press conference follows a trip by top managers, including Chief Executive Officer Matthias Mueller, to Qatar to visit the carmaker’s third-largest shareholder.
Volkswagen has provided little information on the people and processes involved in rigging diesel vehicles to pass emissions tests and providing inaccurate carbon-dioxide data in Europe. The meeting last weekend with Qatar Holdings LLC, the only major shareholder not in Germany, shows that Volkswagen’s management is now in a position to provide at least some answers.
“We believe Thursday will provide the first significant watershed” on the scandal, with details about recalls, the investigation and strategic shifts expected, Arndt Ellinghorst, a London-based analyst with Evercore ISI, said in a note. Greater transparency “will be a positive trigger for the stock.”
Volkswagen faces at least 8.7 billion euros ($9.4 billion) in recall costs and damages from the scandal, not including potential fines and lawsuits. While the company is nearing regulatory approval for a low-cost fix for some 8.5 million cars in Europe, its proposals are still under review in the U.S., where regulation is more stringent. The cost of buying back the affected U.S. vehicles could total as much as $9.4 billion, according to Bloomberg Intelligence.
Thursday’s meeting will be the second time Mueller has engaged directly with the broader shareholder and analyst community since the scandal broke. The first was when the carmaker reported third-quarter results. That appearance had to be cut short because the CEO had to catch a flight to China for a trade trip with German Chancellor Angela Merkel. It also came before Volkswagen admitted that some of its cars had irregular carbon-dioxide emissions readings, beyond the manipulated diesel pollution tests.
The Qatar trip by Volkswagen executives was “a normal introductory visit by the new management to one of the company’s most important partners,” said Eric Felber, a spokesman for the Wolfsburg, Germany-based company.
Europe’s biggest carmaker has been grappling with an emissions scandal on three fronts: cheating software it installed in about 11 million diesel cars worldwide; irregular carbon dioxide ratings on as many as 800,000 gasoline and diesel cars largely in Europe; and additional questionable emissions software in about 85,000 VW, Audi and Porsche cars with 3.0-liter diesel engines in the U.S. The manipulation triggered the departure of former CEO Martin Winterkorn in September.
The role of Volkswagen’s works council and labor’s right to help make strategic decisions weren’t on the agenda for the meeting, Felber said. German weekly Bild am Sonntag reported that Qatar had sought structural changes including curbing influence of the carmaker’s powerful labor unions.