Monday, October 12, 2015

More Volkswagen

The CEO of Volkswagen of America, Michael Horn, testified before the U.S. House over site committee last Thursday.  I watched most of the testimony as he answered questions put to him by members of the committee.  It is obvious that this testimony comes very early in the investigations into what happened, who knew and why.  He was unable to answer many of the questions due to the "on-going internal investigation".  He made it clear that an outside, U.S. law firm, Kirkland & Ellis, LLP had been hired to investigate this debacle.  He also distanced the U.S. arm of operation from those in Wolfsburg

Incentives on sales and bonuses on CSI are apparently being paid with no regard to sales goals or CSI reports.  In addition, Volkswagen wired "discretionary" funds to the dealer body to be used as they see fit to deal with customers and help with their operating expenses.  The amount of money apparently depends on the volume of the dealership.  Larger dealers got more monies than smaller operations.

Unfortunately, for the dealers this really solves nothing.  Customers are feeling cheated as are the dealers themselves.  Trying to resolve the issues by trading customers out of their diesel cars using the discretionary funds to bolster the deal will only cause further problems for the dealers.  Taking the  diesel models back on to their lots, unable the sell them, would lead to dealers to find storage for vehicles, monthly maintenance expense, flooring expense, and a whole bunch of other expenses while the dealers wait for the fix that will allow them to again sell the diesel that frankly the U.S. car buying public may not want.

Personally, I think everyone should sit tight until VW comes up with a solution or a buyback.  Of course it is only a matter of time before California or some other emission checking state will tell diesel owners they can't drive their non conforming Volkswagen.

Someone at Volkswagen AG did this.  Not Volkswagen of America.  Not your local Volkswagen Dealer.  Not the thousands of Volkswagen employees in the U.S.

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