Volkswagen CEO: Massive cost cuts needed

Volkswagen (VOW3-DE) CEO Matthias Mueller said on Tuesday that the automaker will need to make "massive" cost savings overcome the consequences of the emissions scandal that has engulfed it.

Addressing staff, Reuters cited the the newly-appointed CEO as saying the group could overcome the crisis and emerge stronger from it. He added the financial impact of the crisis was not yet clear. The group would do the utmost to limit the impact on jobs.

Billions of euros have been wiped off Volkswagen's value following the revelation that the company had used software to change its diesel engines' performance under U.S. test conditions.

Volkswagen Works Council chief Bernd Osterloh said all projects and investments would be reviewed. The scandal would impact earnings as well as workers' bonuses, he said.

Mueller replaces Martin Winterkorn, who stepped down two weeks ago following revelations of the auto giant's manipulation of emission tests for its diesel cars. In a statement he made at the time of his appointment, Mueller said he wanted to implement strict compliance standards while gaining back the trust the company has lost.

German business daily Handelblatt reported earlier on Tuesday that 8 million diesel vehicles in the European Union are equipped with software that cheats emissions tests. It obtained a company letter addressed to German parliamentarians which said a ll affected automobiles will be repaired in Volkswagen's shops. The automaker would cover the costs associated with that.

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