VW CEO says SUV is 'crucial' for future

Renault faces anti-fraud raids over diesel emissions, C-3

The Chattanooga Volkswagen assembly plant, located in the Enterprise South industrial park, is photographed on Thursday, Jan. 14, 2016, in Chattanooga, Tenn.
The Chattanooga Volkswagen assembly plant, located in the Enterprise South industrial park, is photographed on Thursday, Jan. 14, 2016, in Chattanooga, Tenn.
photo The entrance sign for the Chattanooga Volkswagen assembly plant, located in the Enterprise South industrial park, is photographed on Thursday, Jan. 14, 2016, in Chattanooga, Tenn.

Volkswagen Chief Executive Matthias Mueller told the automaker's Chattanooga factory workers Thursday that the sport utility vehicle they plan to start making late this year is "crucial for Volkswagen's future in America."

He also said he understands the frustration in the pace of finding a fix for the more than half million U.S. diesel vehicles, including the Chattanooga-made Passat, which are part of the company's emissions scandal.

"I am impatient, too. I'd also like a faster solution," he said. "But we have to proceed with care."

Mueller said he has agreed with U.S. environmental officials not to publicly discuss the next steps in addressing the cheating scandal.

The CEO met with Chattanooga plant management and toured the factory expansion construction site, where VW is spending $600 million. The new facilities and equipment will accommodate a second line to begin building the midsize seven-seat SUV later this year.

"It's going to be a great car that embodies everything you can expect of a Volkswagen," Mueller said in a statement. "Today, I ask you to do all you can to make this a big success and please help demonstrate that this team - that Volkswagen - deserves the trust of our customers, partners and the American public."

The visit to Chattanooga comes a day after a face-to-face meeting with Environmental Protection Agency chief Gina McCarthy, which was requested by Volkswagen.

Earlier in the week, California regulators rejected the car maker's plan to fix the diesel-powered vehicles that were rigged to cheat on emissions tests, calling it vague and inadequate. The EPA said it agreed with California's assessment.

In Detroit on Wednesday, EPA Director of Transportation and Air Quality Christopher Grundler said VW's proposed fixes fell short "in a lot of different areas," and the discussions are continuing.

Grundler wouldn't get into specifics, but said the agency and the California Air Resources Board are insisting on expeditious repairs that won't have an adverse effect on owners.

"We're not there," he said.

Jessica Caldwell, director of industry analysis at Edmunds.com, said she's surprised VW hasn't come up with a fix yet for its diesel vehicles affected by the cheating scandal.

She said that Toyota, hit by the sudden acceleration crisis, and General Motors, which dealt with faulty ignition switches, announced fixes sooner than in VW's case.

"It's lingering," she said about the German automaker's emissions problem.

Volkswagen was forced to admit last year that about 600,000 vehicles nationwide were sold with illegal software designed to trick government emissions tests. Those controls deactivated during real-world driving, causing the cars to emit up to 40 times more pollution than allowed.

On Sunday in Detroit, Mueller told reporters he planned to present remedies to fix the diesel engines at Wednesday's meeting with McCarthy.

The meeting came as the German automaker and U.S. regulators were at an apparent impasse over how to proceed with the expected recall of the "clean diesel" vehicles sold with secret software designed to make their engines pass federal emissions standards while undergoing laboratory testing. The vehicles switch off those measures in real-world driving, spewing harmful nitrogen oxide at up to 40 times what is allowed under federal environmental standards.

The Associated Press contributed to story.

Contact Mike Pare at mpare@timesfreepress.com or 423-757-6318.

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