Volkswagen officials announced Friday that the German carmaker’s diesel emissions troubles are far from being over. The company estimates that the scandal could cost an extra $1.7 billion amid refreshed scrutiny after the arrest of one of its key former engineers.
VW also announced that the costs of repairs and repurchasing operations have been higher than estimated in the United States. After the news, the company’s stock slipped 3%.
The scandal has already cost the company $24 billion worldwide as 11 million diesel cars were sold with a system that could pass regulators’ emissions tests without the cars being environmentally-friendly.
Most of penalties and buybacks happened in the United States, where the carmaker pleaded guilty to using the illegal devices. In Europe, the company claims that using the so-called “defeat devices” is not against the European law.
VW Silent on the Arrest
The company refused to comment on the recent arrest of Wolfgang Hatz, a senior executive, in Munich, Germany, but industry analysts noted that the arrest can only mean that the defeat devices were installed with the silent nod of the higher management.
One person briefed on the matter confirmed Hatz was taken into custody but couldn’t tell on what charges. It is unclear if any charges have been brought against him as the company is not aware of any new evidence in the scandal. So, Hatz may be of interest to prosecutors over his contacts with the employees that were directly involved in the scandal.
Munich authorities confirmed that they arrested a former VW employee, but they refused to identify him. Hatz couldn’t be reached for comment.
Hatz headed the company’s luxury brand division – Porsche and Audi – and is a close associate to the company’s former CEO Martin Winterkorn who had told investigators that he learned about the emissions problems in September 2015, when the EPA made it public.
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