Chief executive promises to overhaul culture and internal systems

Volkswagen chairman Hans Dieter Pötsch has admitted that the diesel emissions scandal which rocked the German car manufacturer in September this year, was a result of “a whole chain” of failures within the company, and cannot be attributed to rogue engineers alone.

Speaking at a press conference in Germany this week, Pötsch said individual misconduct, flawed internal processes and a “mindset” within the company that tolerated rule-breaking had contributed to the scandal.

"We are talking here not about a one-off mistake but a chain of errors,” he said.

Matthias Müller, current chief executive at VW who replaced Martin Winterkorn in September, pledged to overhaul company culture by encouraging openness, decreasing hierarchy and imposing enhanced compliance and governance structures.

In September, the Environmental Protection Agency (EPA) found that many VW cars being sold in America were producing 40 times the nitrous oxide emissions legally allowed. A ‘defeat device’ was found to be fitted in diesel engines that could detect when the vehicle was being tested and change performance to improve results.

Work on the 'defeat' software was said to have begun as early as 2005.

Pötsch said: “Even though we cannot prevent misconduct by individuals once and for all, in future it will be more difficult to bypass our processes.”

As many as nine managers have already been suspended over the scandal, but Pötsch didn’t rule out further suspensions.

"We still believe a relatively small number of employees were directly involved in manipulation," he said. "I will not speculate on whether there will be further personnel consequences."

Results of a VW-led investigation, involving internal and external teams, are due to be announced at the company’s annual meeting in April and American law firm Jones Day has said to have already interviewed 87 members of staff and seized 1,500 devices belonging to 400 members of staff.

In November, the car maker said it would offer staff amnesty in return for information on the emissions scandal.

“We are relentlessly searching for those responsible for what happened and you may rest assured we will bring these persons to account,” Pötsch said.

VW said it was taking steps to overhaul its internal processes, including greater supervision of engine software development and "real-life" emissions tests, which will be checked by third parties. A new IT system would also be implemented to flag individual misconduct.

"No business justifies crossing legal and ethical boundaries,” Pötsch said.

"When it comes to thresholds, we need the courage to be more honest.

"The growing industry-wide discrepancies between official emissions data and real-life levels are no longer acceptable. We need to break new ground here,” he added.