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VW CEO Starts US Charm Offensive With Apology

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Volkswagen CEO Matthias Müller apologized for the diesel scandal in January 2016 at the North American International Auto Show in Detroit.Jewel Samad — AFP/Getty Images

Volkswagen AG (VLKAY) Chief Executive Matthias Müller started his first official visit to the U.S. since the emissions scandal broke with a charm offensive consisting of an apology and a promise of more investment in its plant at Chattanooga, Tn.

“I apologize for what went wrong at Volkswagen,” Müller told journalists at a reception ahead of Detroit auto show. “We know we deeply disappointed our customers, the responsible government bodies, and the general public here in America.”

Müller also talked up the company’s plans to invest up to $900 million in its plant at Chattanooga, with the production of a new midsize SUV for the U.S. market, creating up to 2,000 new jobs.

But the boss of Europe’s largest carmaker will have to do more than apologise on Wednesday when he meets Environmental Protection Agency administrator Gina McCarthy on Wednesday. The EPA still hasn’t signed off on VW’s plans to fix the diesel vehicles that it has that been illegally selling since 2009, on the basis of doctored emissions tests.

That’s a big contrast to Europe, where regulators have approved a cheap and easy corrective to the exhaust system that bring the cars into line with the E.U.’s much looser standard on emissions of nitrogen oxides. That favor from the regulators has cut billions from the estimated bill for the company, because most of the 11 million cars affected were sold in Europe.

However, the company still faces stiff penalties in the U.S., after the Department of Justice sued it on four violations of the Clean Air Act. In theory, fines from the suit could add up to $90 billion, but analysts expect the final number to be a small fraction of that.

The toughness of U.S. standards narrows VW’s options for fixing the nearly 600,000 cars running the so-called ‘defeat devices’ that mask the actual level of emissions. The newspaper Bild am Sonntag reported on Sunday that Müller will present to McCarthy details of a new catalytic converter that it could retrofit on some 430,000 cars to bring them into line with U.S. norms. German newspapers have reported that the company has already accepted it may have to buy back most of the remaining cars, around 115,000 of them.

 

Separately, the New York Times reported Monday that U.S. prosecutors’ patience with VW is wearing thin after it “impeded and obstructed” their inquiries and provided them with “misleading information.” The lack of access to evidence partly explains why the DoJ didn’t file criminal charges against VW last week, although it still reserves the right to.

It cited prosecutors as complaining that VW was citing German privacy law by failing to share internal e-mail correspondence between executives. Germany has been particularly jealous of its citizens’ data privacy since NSA whistleblower Edward Snowden revealed the extent of illegal U.S. spying on German citizens, right up to Chancellor Angela Merkel.

The NYT said VW “has principally cited the German Federal Data Protection Law, the German Constitution, the European Convention on Human Rights, decisions of the German Constitutional Court and the European Court of Human Right…and provisions of the German Criminal Code.”