Volkswagen says 11 million cars hit by scandal, probes multiply
By Andreas Cremer
BERLIN (Reuters) - Volkswagen AG (VOWG_p.DE: Quote) said a scandal over falsified U.S. vehicle emission tests could affect 11 million of its cars around the globe as investigations of its diesel models multiplied, heaping fresh pressure on CEO Martin Winterkorn.
The world's largest automaker said it would set aside 6.5 billion euros ($7.3 billion) in its third-quarter accounts to help cover the costs of the biggest scandal in its 78-year-history, blowing a hole in analysts' profit forecasts.
It also warned that amount could rise, saying diesel cars with so-called Type EA 189 engines built into Volkswagen models worldwide had shown a "noticeable deviation" in emission levels between testing and road use.
The U.S. Environmental Protection Agency (EPA) said on Friday Volkswagen could face penalties of up to $18 billion for cheating emissions tests. In addition, the U.S. Justice Department has launched a criminal probe of Volkswagen, a source familiar with the matter said.
The investigation is likely to examine not only possible violations of the Clean Air Act but also of broader statutes against wire fraud, false statements to regulators and other crimes, former prosecutors not involved with the investigation said. A Justice Department spokesman declined to comment.
New York and other state attorneys general are also forming a group to investigate, New York Attorney General Eric Schneiderman said.
“No company should be allowed to evade our environmental laws or promise consumers a fake bill of goods," Schneiderman said in a statement.
The crisis has sent shockwaves through Germany, with Chancellor Angela Merkel calling for "complete transparency" from a company long seen as a symbol of the country's engineering excellence. Continued...