Volkswagen to start repairs in January, cut investments and 'analyse profitability' of all lines; Spanish employees fear factory closures

VW has set aside €6.5 billion to cover the costs of rectifying all vehicles involved, but realises the final bill may well be considerably higher, especially if fines are levied by international governments.

New chairman Hans Dieter Pötsch and new chief executive officer Matthias Müller have warned that 'painful' decisions will have to be made to ensure all affected VW owners have their cars and vans repaired without charge.

Although both pledge to keep employees protected and 'do everything to ensure Volkswagen will stand for good and secure jobs in the future', they say all non-essential investments would have to be 'cancelled or postponed'.

This has sent employees in Spain's factories and dealerships into a panic, fearing their workplaces may be shut down – the country manufactures Seat, a VW-owned brand which until now had been recovering well from the effects of the recession and been planning to take on hundreds of new staff members in Spain.

And Spain's minister for industry José Manuel Soria says he 'does not know' whether any cuts made at head office level in Germany would affect Spanish branches and employees.

Müller says Volkswagen may have to downsize and 'reduce its centralisation', saying every make and model would be analysed to 'ascertain their contribution' to the company.

But he insists any planned actions for the foreseeable future would be 'an evolution, not a revolution', added that the crisis caused by the emissions-masking scam had 'given the firm an opportunity to modernise its infrastructures'.

The repair process, in the meantime, will be long and drawn-out and especially for those vehicles with smaller engine sizes.

New software for two-litre (2L or 2000cc) engines would be ready to install by early 2016, but for 1.6L engines, this could take until at least September.

Whilst the corporation's head office in Germany works out how to tackle the largest car manufacturing recall in global history, Spain's two main consumer associations – FACUA and the OCU – say the free-phone telephone numbers they have set up for Volkswagen 'victims' have been ringing off the hook.

Both have urged anyone who bought a VW van or car, or an Audi, Skoda or Seat with a diesel engine between 2009 and the present to get in touch with them so they can take on the case for affected vehicle-owners en masse.

The illegal emissions-doctoring software has been installed in EA 189 EU5 diesel engines.

Spain's government has confirmed that the rigging scandal will not affect the so-called Plan PIVE, where owners part-exchange their cars of seven years old or more for a brand-new one at a much more competitive rate thanks to a State subsidy.