VW boss grilled by Congress

President and CEO of Volkswagen Group of America, Inc. Michael Horn. Photo / AP

Emissions-rigging scandal compared to worst US failures while German offices raided by police

Volkswagen's emissions-rigging scandal is "on the same scale as Enron", America's most notorious corporate failure, according to US politicians.

The German giant was also compared to disgraced cyclist Lance Armstrong and Ponzi fund conman Bernie Madoff, as Michael Horn, chief executive of its United States business, appeared yesterday before Congress to be grilled over the company's fiddling of diesel exhaust pollution tests.

"VW is the Lance Armstrong of the auto industry. This scandal is on the scale of Enron or Madoff," said Democrat committee member Peter Welch.

The accusations came as VW's headquarters in Wolfsburg were raided by German police and public prosecutors, with the company pledging to co-operate with investigations, and Credit Suisse analysts saying the cost to the car maker could run as high as 78 billion ($131.8 billion).

Horn was testifying in Washington before politicians on the US House Committee on Energy and Commerce. They quizzed him on whether the decision to fit the "defeat devices" - now found to have been fitted in 11 million vehicles worldwide - was a corporate one that went to the very top of VW.

He denied there was debate about installing the devices at the highest ranks of the world's biggest car-maker, claiming: "This was a couple of software engineers who put this in for whatever reason ... some people have made the wrong decisions in order to get away with something that will have to be found out."

But New York Republican Chris Collins refused to accept this, suggesting the company had decided it was cheaper to cheat the tests rather than invent the technology needed to meet US pollution standards.

"Either your entire organisation is incompetent when it comes to trying to come up with intellectual property, and I don't believe that, or it is complicit at the highest levels in a massive cover-up that continues to this day," he said.

Horn said he did not have details of action taken against staff over the scandal - though reports in Germany suggest 10 people have so far been suspended - and that German law prevented him from naming them.

Despite having been warned by the committee against "hiding behind" an external investigation of VW, Horn said the inquiry was only at a preliminary stage, meaning he could not answer several points.

Under often tough questioning from committee members, Horn conceded that profit could have driven the decision to get VW diesel cars to meet US standards on how much pollution they could pump out.

Comparing the crisis engulfing VW to Enron, Armstrong and Madoff, Welch added: "How do you sleep at night knowing you knowingly poisoned the planet?"

"I don't sleep at night," replied Horn, who said that he had "no understanding" of what defeat devices actually did until early September this year, although he had been alerted to an issue with VW cars' emissions 18 months ago.

He said it could take more than a year to upgrade the almost 500,000 affected vehicles in the US, with about 400,000 needing new parts, ending hopes of a cheap software fix.

Giving evidence under oath, and sitting alone before the committee, Horn offered "sincere apology for the use of the software".