Volkswagen Groups's incoming chairman warned managers that the automaker's diesel-emission scandal poses "an existence-threatening crisis for the company" as new details emerged about how the debacle unfolded.
VW finance chief Hans Dieter Poetsch, who is expected to be named chairman this week, told managers last week that despite the predicament in which the company finds itself, he believes VW can overcome the crisis, according to the report in the Welt am Sonntag newspaper in Germany.
The crisis, which has wiped out $34 billion in the company's value as shares have fallen, stems from the disclosure by the U.S. Environmental Protection Agency last month that VW had rigged nearly 5 million diesel cars in the U.S. to pass emissions tests even though they spewed far greater emissions on the highway.
VW admitted to the fraud and said 11 million vehicles are affected worldwide.
The New York Times reported Sunday that the cheating began in 2008 after Volkswagen's engineers figured out that the new diesel engines they had developed at great expense would not meet emissions standards in the U.S. and other countries. So they installed software to beat the tests, the Times reported based on unnamed sources with knowledge of the inquiry.
The cheating resulted from not wanting scrap the years of effort they had put into developing the engine. The report says VW is yet to pinpoint who was responsible for the cheating. Several engineers have admitted to creating the software aimed at cheating the tests, Germany's Bild am Sonntag newspaper reported Sunday.
The software may have been contained in parts from a big auto industry supplier,Continental, Bild says. But a Continental spokesman denied that the company knew of any contaminated software and wasn't in a position to measure emissions.
Contributing: The Associated Press