Volkswagen pledges new corporate structure and improved software supervision

Volkswagen executives have promised their dedication to a new corporate structure in light of the CO2 emissions scandal. In a press conference, chief executive Matthias Mueller and chairman Hans Dieter Poetsch said they are turning things around at the car maker.

The overhaul would include a significant improvement of software supervision to prevent similar fixing scandals to happen in the future. It was the emission software in the car that rigged emission tests.

"No business justifies crossing legal and ethical boundaries," Poetsch told reporters. He added that the new tightening of supervision would make it harder for individuals to bypass the eye of the company.

The Volkswagen executives organised the event to update the press and the general public "the current status of the clarification process concerning the diesel issue and on the realignment of the group".

The conference follows news that the number of cars affected by the fraudulent CO2 emission software is much smaller than previously estimated. However, Poetsch and Mueller assured the press they were not taking the scandal lightly.

"We are talking here not about a one-off mistake but a chain of errors," Poetsch said. Mueller added that the firm is "fighting for every customer and every car". As part of these promises, the firm is sharpening supervision of engine software development.

"Our engine control units were not suitable for preventing the software in question," Volkswagen's chairman told the press. "Remedial measures include structuring processes better. We cannot control individuals, but in future it will be much harder to bypass the rules."

The carmakers' executive did announce new softwares to be installed which would allow management to keep closer tabs on individuals within the company. Poetsch and Mueller spoke of "attitudes" and "mindsets" that allowed this to happen and said that the direct blame is likely to fall on a very limited number of people.

The cost of fraud

Volkswagen had already put aside €2bn (£1.4bn, $2.1bn) in earnings to deal with the sizeable scandal, but market expectation is that this will be less now that only some 36,000 cars produced a year were affected.

The amount put aside to cover the costs caused the company's losses in the third quarter to be more severe than expected. The German carmaker reported a €3.48bn loss (£2.5bn) on 28 October 2015. The unexpected cost of Volkswagen's emission scandal revealed in September caused the firm to plunge into the red, from a €3.23bn (£2.3bn) profit in the equivalent quarter in 2014.