Volkswagen, which has already lost billions in value as a result of the Dieselgate, continues to feel the effects of the diesel cheating scandal as it has idled thousands of workers at two of its plants as its car sales have slipped for the first time in a decade. Though other issues may have initially prompted the weekend-long shutdowns, the emissions scandal is undoubtedly have an effect.
According to Automotive News, the automaker halted production temporarily at halted production at its Emden plant, where the restyled Passat lineup is produced. There are three models in this line, coupe, sedan and station wagon. The automaker attributed yesterday’s production halt, which continues today and may last through Monday, to problems with stampings for the Passat. In addition, the automaker, idled production at its Kassel gearbox and parts plant. Kassel makes gearboxes and parts for Passat. A total of 10,000 workers has been affected by the halt.
The shutdown in some areas of the Kassel plant confirms a report in the German newspaper Hessische Niedersaechsische Allgemeine. The report indicated output from the transmission plant, which produces 4 million gearboxes per year, was feeling the effects of slowed demand for components, as well as the technical problems at Emden, a factory spokesman acknowledged. In what might be further acknowledgment of the slowdown, production at Kassel will be halted Monday, Friday and Feb. 8.
Volkswagen has acknowledged that it is experiencing tough going as a result of the Dieselgate emissions scandal. For the first time in more than a decade, the automaker saw the first drop in sales of its core namesake brand as 2015 ended. As the new year dawned, Volkswagen has been involved in an prolonged attempt to contain the fallout of the emissions scandal.
The automaker has been embroiled in the Dieselgate scandal since September when it admitted that it had installed a “defeat switch” to enable its diesel cars to meet US emissions standards. Actually a software subroutine, the “defeat switch” tests to determine whether the vehicle is undergoing an emissions test. If it finds there is a test underway, the software resets the vehicle’s emission system so that it will pass the test. Once the test ends, the vehicle is reset to “normal mode” so that mileage goes up and performance is better, although emissions rise radically. The automaker has admitted installing this software in 11 million vehicles worldwide.
The fallout from Dieselgate has been widespread as it cost Martin Winterkorn, former chief executive of VW, his position; several senior managers have either resigned or been suspended, along with engineers and others; criminal probes have been launched in the US, Germany, France, Italy and South Korea; the attorneys general of 48 states have brought suit; hundreds of class action lawsuits have been filed; the Justice Department has level civil racketeering charges, seeking $48 billion; VW has seen billions in value lost in four months, and regulators have rejected its early attempts at fixing the problem in the US.