Another week brings more new stories on the diesel-emission cheating scandal that threatens to dig Volkswagen deeper into a ditch of its own making.

Following reports in German newspapers late last week suggesting that the "defeat device" software was an "open secret" in VW's engine group, the company bit back yesterday.

VW Group CEO Matthias Müller told reporters at a reception that the sources for the Sueddeutsche Zeitung report "have no idea about the whole matter."

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Müller's statement, as reported by Reuters, "casts doubt" on the newspaper's report, which it said came from statements by a whistleblower cited in the company's internal probe of the scandal.

The CEO also suggested that the company would not release results of that probe, conducted by U.S. law firm Jones Day, any time before its annual shareholder meeting on April 21.

"Is it really so difficult to accept that we are obliged by stock market law to submit a report to the AGM on April 21," asked Müller, "and that it is not possible for us to say anything beforehand?"

Matthias Müller

Matthias Müller

VW Group's powerful Board of Directors will hold their third meeting in three weeks on the affair this coming Wednesday.

Despite PR fallout, VW Group's German communications unit continues to allege that while the "defeat device" software in its TDI diesels violated U.S. laws, it was entirely legal in Europe.

The majority of the 11 million affected vehicles were sold in European countries, helped by policies instituted by some national governments that gave financial advantages to diesel vehicles and their fuel.

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In a statement to The New York Times, which published an article on the matter last week, the VW Group wrote that the software "is not a forbidden defeat device” under European rules.

As the Times notes, that determination, "which was made by its board, runs counter to regulatory findings in Europe and the United States."

"German regulators said last month that VW did use an illegal defeat device," the newspaper said, suggesting that the statement reflected VW's legal approach to the affair.

Consumer Reports tests 2015 Volkswagen Jetta TDI diesel in 'cheat mode,' October 2015 [video frame]

Consumer Reports tests 2015 Volkswagen Jetta TDI diesel in 'cheat mode,' October 2015 [video frame]

"While it promises to fix affected vehicles wherever they were sold," it said, "it is prepared to admit wrongdoing only in the United States."

The VW view only underscores the loosely-regulated European emission testing rules, now the subject of a fight in the European Parliament.

Two issues are at stake. The first is the degree to which new and tougher testing rules continue to allow manufacturers to exceed existing emission limits

The second is whether European Union authorities can, in some circumstances, overrule the testing bodies of individual countries--namely Germany--which enforce common EU limits within their own borders.

And so the saga continues.


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