Most Of The Cheating Volkswagen Diesels Will Require A Hardware Fix Too

Illustration for article titled Most Of The Cheating Volkswagen Diesels Will Require A Hardware Fix Too
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1st Gear: Fixing This Is Going To Suck For VW

We learned a lot in yesterday’s Congressional whipping session with Volkswagen U.S. CEO Michael Horn. One of the most important things for TDI owners is that the older diesel cars—the ones from before the 2015 model year, with the first-generation EA189 diesel motor—will need hardware fixes in addition to software updates.


For the newer cars, Horn thinks a software update will get the job done. Here’s Automotive News summing up the issue:

About 325,000 VWs have the first-generation 2.0-liter diesel, while 90,000 use the second-generation engine, including the 2012 Passat diesel, according to a VW spokeswoman. About 67,000 vehicles from the 2015 model year forward use the third-generation diesel engine. The third-generation engines do meet emissions standards and can be made compliant with a software change alone, Horn said.

Customers receiving repairs should expect to maintain the EPA fuel economy ratings on their vehicles after receiving a fix, though performance may be impacted, Horn told lawmakers.

Repairs might take 5 to 10 hours on the older cars needing hardware changes, Horn said. All told, it could be more than a year until all the repairs are complete, citing the low rate of recall participation in the U.S. and other complexities, Horn said.

Also, it’s the same story in Europe, where Reuters reports 3.6 million Volkswagen cars in Europe with the 1.6-liter diesel engine (which wasn’t sold in America) will need hardware fixes too. This is about to get really expensive.

2nd Gear: VW Dealers Face The Worst Hit Of All

Volkswagen as a company will suffer hard through this mess, but it’s possible the worst victims so far are the dealers. It’s not like VW had a huge, strong-selling lineup in America already, unlike other automakers who have faced scandals. Here’s Bill Fox, chairman of the National Automobile Dealers Association, in The Detroit News:

“It’s going to be a challenging time,” said Fox at The Detroit Athletic Club. “Our role ... is to ensure that the consumer is taken care of because it reflects badly on all of us in this industry.” Kelley Blue Book reports that VW diesels have lost 13 percent of their resale value since the scandal broke last month. There are some 650 VW dealers in the U.S. — 19 of them in Michigan.


3rd Gear: New Fiat Chrysler-UAW Deal Is Better For Entry Workers

The proposed contract deal between Fiat Chrysler and the United Auto Workers members, the one reached at the 11th hour early Thursday, is reportedly better at closing the gap between entry-level “second-tier” workers and more well-paid veteran “first-tier” workers. That’s been a sticking point for some time in these negotiations. One more from The Detroit News:

Second-tier workers — now known as “in-progression” — would earn as much as $29 an hour with the proposed deal, up from $25.35 an hour under the previous rejected contract, according to a source familiar with the situation who is not authorized to speak on record because the union hasn’t briefed workers on the tentative deal.

[...] The top wage for the newer workers would be roughly $10 an hour more than the $19.28 ceiling that entry-level workers make under the 2011-15 deal.


4th Gear: Ferrari Said To Push For $12.4 billion valuation

Some say Ferrari is the most valuable brand in the world, behind Apple. So as they head toward their initial public offering as Fiat Chrysler spins it off, that’s the valuation they could be looking at, reports Bloomberg:

Based on talks with possible investors, Ferrari could be valued from just under 10 billion euros to 11 billion euros when owner Fiat Chrysler Automobiles NV sells a 10 percent stake in the division on the New York Stock Exchange, according to the people, who asked not to be identified because the arrangements are private. Fiat shares traded in New York and Milan jumped to an eight-week high.

An IPO price range will be published in an updated filing as early as Friday, and presentations to possible buyers are slated for next week, said the people. The valuation may change amid market volatility since Volkswagen AG’s diesel-testing scandal emerged last month, they said.


5th Gear: Three More Japanese Execs Indicted For Price-Fixing

What is it with Japanese auto companies doing price-fixing? Anyway, three executives with supplier Nishikawa Rubber Co. were indicted in the U.S. yesterday as part of that ongoing scandal. Via Automotive News:

Keiji Kyomoto, Mikio Katsumaru and Yuji Kuroda are accused of conspiring to fix prices and rig bids for weather stripping and rubber seals sold to Toyota Motor Corp. and Honda Motor Co. for vehicles made and sold in the U.S.

Kyomoto and Kuroda are still listed as being employed by Nishikawa, but a statement from the U.S. Justice Department said only one executive was still employed by the company. According to the company’s website, Kyomoto is a director on the board, while Kuroda is an operating officer.


They each face a maximum of 10 years in prison and $1 million in fines if convicted.


Reverse: And Nothing Of Value Was Lost


Neutral: Will VW Dealers Recover Soon?

It’s going to be months before the 2016 model year VW TDIs can go on sale and that large crossover they have in the works is probably a year out at the earliest. Can VW’s sales survive?


Photo credit AP

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Looks like VW has some company.…