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Volkswagen reportedly shelves US plans in wake of diesel emissions scandal

Despite problems worldwide, German morale remains high, and Audi continues to hire and issue bonuses, as well.

2014 Volkswagen Jetta TDI
If the fallout is bad enough, Volkswagen may consider stopping US diesel sales altogether.
Antuan Goodwin/CNET

Volkswagen has reportedly suspended its plans to restructure its North American arm, choosing to wait until any potential lawsuits related to its diesel emissions scandal have been settled.

Volkswagen had planned to increase its North American arm's autonomy, but the German automaker is holding off assigning a new head of North American operations, Reuters reported Tuesday. The former North American chief, former Skoda CEO Winfried Vahland, resigned in mid-October after three weeks on the job over disagreements over the restructuring plans.

Volkswagen put the plans on hold as it deals with the fallout from a scandal in which it admitted in September to installing software to cheat diesel emissions tests around the world. What's followed is a panoply of executive shufflings, halted vehicle sales and compulsory recalls. Approximately 11 million Volkswagen TDI models contain the defeat device, and potential fixes range from computer reflashes to expensive equipment retrofits.

Responding to a request for comment, Volkswagen spokesman John Schilling wrote, "We have no update on the North American Region structure at this time. Reports regarding the future sale of diesels in the United States are speculation. TDI remains a key part of the product strategy in North America."

While Volkswagen's North American plans remain in limbo, other German businesses don't seem to be too impacted by Volkswagen's scandal. The Ifo Institute for Economic Research, which studies the business climate in Germany, says overall morale at German companies remains high, according to Reuters. Germany's economy is already being pulled from all sides, as the country has hundreds of thousands of refugees entering its borders from areas mired in conflict, so there's more than just Volkswagen to consider.

Even inside Volkswagen's corporate structure, other businesses don't appear too affected by Volkswagen's transgressions. Audi, which is a majority-owned subsidiary of Volkswagen, confirmed to Reuters that it would continue to hire new employees and issue bonuses. This follows an earlier, unconfirmed report that Volkswagen would not force its subsidiaries, including Audi and Porsche, to shoulder the weight of any forthcoming fines or recalls. Volkswagen has several billion euros set aside to address the vehicle repairs, but independent reports suggest the company's total financial hit could reach 10 times that much.

Editors' Note, October 28, 2015: This story has been updated to include Volkswagen's comment.