The U.S. tech giant has brought about a design aesthetic with its iPhone and iPad that set it apart from rivals such as Samsung Electronics and Sony and helped make it the most valuable company in the world.

For Europe’s biggest automaker, adopting simplicity as the guiding principle for future styling of electric vehicles (EVs) marks a departure from the era before its 2015 “dieselgate” emissions scandal, when vehicle design conveyed the German group’s engineering prowess and technological ambitions.

“We are currently redefining the Volkswagen values for the age of electrification,” Klaus Bischoff, head of VW brand design, said in an interview. “What’s at stake is to be as significant, purist and clear as possible and also to visualize a completely new architecture.”

With regulators slashing emissions on a fast timetable, dieselgate has also energized the costly shift to EVs that is necessary to compete in China, VW’s largest market, and to avoid future fines in Europe.

Previously a laggard on electrification, VW has pledged 34 billion euros ($42.45 billion) of investment in EVs, self-driving technology and digital mobility businesses across the group by 2022.

The core namesake brand alone will spend 6 billion euros on a new modular platform dubbed MEB designed to underpin over 20 purely battery-powered models such as the I.D. hatchback, I.D. Crozz crossover and the I.D. Buzz microbus.

Bischoff said VW will use the Geneva auto show on March 5-7 to give early guidance on what the post-I.D. generation of EVs might look like, but declined to elaborate.

Bischoff belongs to VW’s old guard, having worked a quarter of a century in VW’s design operations and the past decade as head of the core brand’s design.

He became famous through a video shot at the 2011 Frankfurt auto show that has since drawn over 2 million hits on YouTube.

It showed Bischoff being yelled at by former CEO Martin Winterkorn, who was inspecting a model by South Korean rival Hyundai and had discovered something that had displeased him.

“In the past everything was very centralized, very narrow boundaries were set on the road of success,” Bischoff said. “Today is the most exciting time of my career because I‘m allowed to do things that didn’t use to exist that way.”

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Source: Reuters

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The deal, agreed with labour representatives after months of tortuous negotiations, will lead to annual savings of 3.7 billion euros ($3.9 billion) by 2020, VW brand chief Herbert Diess announced.

“Worldwide we will cut about 30,000 positions, including 23,000 positions in Germany,” he said, adding that these would be mostly through measures such as attrition and temp job losses and not through forced lay-offs.

“It’s a major step forward, and undoubtedly one of the biggest in the history of the company,” said Diess.

Jobs will also be lost in Brazil and Argentina, two markets where the brand is struggling.

“I am very sorry for those affected, but the situation of the brand at the moment gives us little room for manoeuvre,” Diess told a press conference at the group’s Wolfsburg headquarters in northern Germany.

The so-called “Future Pact” agreed with labour leaders will also see VW create 9,000 new positions in areas of new technology, as part of the group’s shift to electric vehicles in the wake of dieselgate.

“We are tackling the problems at the root, even if it’s painful. Many didn’t think we could do it,” Diess said. “Today, we have shown that Volkswagen can and will change.”

The VW brand, which employs 215,000 people worldwide, had already been struggling with profitability, weighed down by high costs and low productivity.

But the group, which also owns brands including Audi and Skoda, was plunged into the biggest crisis in its history last year after it admitted to installing emissions cheating software in some 11 million diesel vehicles.

The so-called defeat devices could detect when a vehicle was undergoing regulatory tests and lowered emissions accordingly to make the cars seem less polluting than they were.

The crisis hurt sales and damaged the image of the proud German company, pushing it to its first loss in over two decades last year.

In response to the controversy and to burnish its environmental credentials, VW has revved up its focus on clean energy cars, announcing plans to develop and manufacture more than 30 new electric vehicles by 2025.

As part of the switch to future technologies, Diess said VW would invest some 3.5 billion euros in Germany over the next four years on projects focussed on automation, digitalisation and e-mobility.

Analyst Ferdinand Dudenhoeffer, an expert on the German auto industry, told n-tv television that VW was on the right track with its massive restructuring plan.

“It’s painful but it’s the right decision,” he said.

VW has set aside some 18 billion euros to cover the fallout of the scandal, but experts believe the final bill for the buy-backs, fixes and legal costs will be far higher.

Last month it agreed a $14.7 billion settlement with authorities in the United States that includes compensation for nearly half a million owners of the affected cars.

But the group still faces a web of investigations and legal claims around the world.

The group’s shares were up 0.55 percent at 118.20 euros Friday, outperforming the overall market, which was down 0.09 percent.

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Source: AFP

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In August, the lawyers in the class action litigation sought up to $332.5 million in fees and costs for their work in a $10 billion settlement that gives U.S. owners of 2.0 liter polluting cars the ability to sell back their vehicles to Volkswagen (VW).

The latest deal with the lawyers means VW now has agreed to spend up to $16.7 billion to compensate U.S. owners and address claims from states, federal regulators and dealers arising from the “Dieselgate” scandal.

The amount to be paid out to lawyers was first reported by Reuters on Friday.

The resolution of legal fees clears another hurdle as the world’s No. 2 automaker looks to resolve all of the outstanding aspects of a scandal that disrupted its global business, hurt its reputation and led to the ouster of its chief executive officer last year.

VW in September 2015 admitted using sophisticated secret software in its cars to cheat exhaust emissions tests, with millions of vehicles worldwide affected. The cheating allowed VW’s U.S. vehicles sold since 2009 to emit up to 40 times legally allowable pollution levels.

The $175 million includes attorneys’ fees and other costs, according to the sources, who spoke on condition of anonymity.

Lawyers for the owners of polluting vehicles and a spokeswoman for Volkswagen declined to comment.

Lead plaintiff lawyer Elizabeth Cabraser, who is part of a committee of 22 lawyers overseeing the owner suits, said in August the amount sought in attorneys fees was far less than the “judicially established benchmark” for class actions of approximately 25 percent of the settlement amount.

U.S. District Judge Charles Breyer on Tuesday is set to hold a hearing in San Francisco on whether to grant final approval of the vehicle owners’ settlement announced in June, which would be the largest-ever automotive buy-back offer in the United States. Breyer must also decide whether to approve the legal fee agreement.

VW has agreed to spend up to $10.033 billion to buy back the vehicles and compensate owners. It may also offer vehicle fixes if regulators approve. Under a timetable announced this summer, regulators could approve a fix for some 2015 VW diesel vehicles as early as next month.

In addition, VW has agreed to pay up to $1.21 billion to compensate U.S. VW brand dealers, pay more than $600 million to 44 U.S. states, spend $2 billion on zero-emission vehicle promotion and infrastructure, and another $2.7 billion to offset diesel pollution.

It still faces billions of dollars in potential fines from the U.S. Justice Department in its criminal probe into VW’s cheating scandal, and must resolve the fate of larger vehicles that were not part of the initial $10 billion settlement.

VW and U.S. regulators are in continuing discussions over whether the automaker should agree to buy back 85,000 larger 3.0-liter Porsche, Audi and VW vehicles that also exceeded U.S. emission standards, and whether it should offer additional compensation to those owners.

VW may have to pay additional owner attorneys’ fees as part of a separate potential 3.0-liter settlement, the sources said.

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Source: Reuters

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