Volkswagen braces for hit to business from emissions scandal

Wed Sep 30, 2015 10:30am EDT
 
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By Andreas Cremer

BERLIN (Reuters) - Volkswagen has imposed a hiring freeze at its financing business and cut a shift at a German engine factory as it braces for a hit to business from cheating in diesel emissions tests.

Senior officials at the German carmaker will examine on Wednesday evening the initial findings of an internal investigation into the biggest business crisis in the company's 78-year history, a source familiar with the matter told Reuters.

Meeting at group headquarters in Wolfsburg, the supervisory board's executive committee will also prepare for an external investigation by a U.S. law firm Jones Day, with an official from that firm to join part of the meeting, the source added.

Europe's largest carmaker has admitted to using software to rig diesel emissions tests in the United States. Germany's transport minister says it also manipulated tests in Europe, where Volkswagen sells about 40 percent of its vehicles.

It is under huge pressure to get to grips with a crisis that has wiped more than a third off its market value, sent shock waves through the global auto industry and could damage Germany's economy.

VW Financial Services, which makes loans to car buyers and leases vehicles to fleet operators, said on Wednesday it was introducing a hiring freeze for the rest of the year.

"We are reacting to the current situation. It is a purely precautionary measure," a spokesman said.

At its Salzgitter engine factory, Volkswagen also cut one shift per week which it had initially put in place to meet higher demand.   Continued...

 
A lone bird sits atop of the Volkswagen power plant in Wolfsburg September 22, 2015. REUTERS/Axel Schmidt