In September 2015, the US Environmental Protection Agency found that Volkswagen had violated the Clean Air Act by circumventing environmental regulations illegally, i.e. cheating in order to get their diesel engines on the road in the US.
Many people say the scandal has seriously damaged Germany’s worldwide reputation for reliability and quality, except for the German Chancellor Angela Merkel, that is.
During an interview with a German radio station (Deutschlandfunk), Chancellor Merkel said that although the Volkswagen scandal was ‘drastic’, she did not believe it was so great that her country was no longer seen as a good place to do business.
A growing number of people are wondering whether VW is the only cheating carmaker.
Chancellor Merkel said (according to a text due to be broadcast later on 4th October):
“I believe the reputation of the German economy and the trust in the German economy has not been shaken by this to the extent that we are no longer considered a good business location.”
Merkel believes Volkswagen will rapidly create transparency and move on.
Volkswagen will likely survive the crisis
Martin Schulz, head of the European Parliament, said the Volkswagen scandal will hit the Germany economy hard. However, he thinks the giant carmaker will probably survive the crisis.
Mr. Schulz, a German Social Democrat, said to a group of German regional newspapers:
“It’s a heavy blow for the German economy as a whole. It’s hard to believe what was done there negligently and possibly even with criminal energy. But I believe that Volkswagen is a strong company that has every chance of surviving the crisis.”
So far, Volkswagen has set aside €6.5 billion ($7.29 billion, £4.8 billion) to cover fines. Experts believe the final bill will be considerably higher.
A total of about 11 million vehicles are fitted with the illegal software – they will all need a refit.
Germany’s car industry employs more than three-quarters of a million workers in Germany alone. It is a vital part of Europe’s biggest economy.
In September, Matthias Mueller was appointed as VW’s new CEO, after Martin Winterkorn’s resignation.
Video – The VW scandal/p>