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VW will delay projects to cope with diesel scandal

Volkswagen's diesel emissions scandal will require the sacrifice of far more than just executives and money. It's also going to result in the cancellation of various projects, a process that new CEO Matthias Mueller said "won't be painless." "We will review all planned investments, and what isn't absolutely vital will be canceled or delayed," Mueller said while addressing the embattled company's employees. The former Porsche boss also said the money set aside by the German giant – about $7.29 billion – won't be enough to cover recall expenses, fines from governments in affected countries, and the expected deluge of lawsuits from disgruntled TDI owners. According to Bloomberg, that figure probably won't even be enough to match the fines Uncle Sam is likely charge, pegged to be around $7.4 billion, according to one analyst. It's expected that VW could delay a further push for share in the North American market, which would include a $1-billion investment in its Puebla, Mexico, factory. But it will take more than cancellations and delays, analysts claim. "It's going to be tough to find projects they could chop that will actually move the needle," JPMorgan Chase's Jose Asumendi told Bloomberg. "What they really need to do is get costs under control." That, according to Bloomberg, is already setting up a showdown between management and labor. The latter wants a reduction in VW's $17.4-billion research-and-development budget – the world's largest and more than what Ford and General Motors spend combined – while the former wants to slash personnel costs. Bloomberg also spoke to analysts who claimed the company should look into reductions in purchasing costs as well as trimming sponsorships. It's impossible to know just how extreme Volkswagen will need to get with cancellations, delays, and cost-cutting, but it's becoming increasingly clear that the effects of this scandal will likely be felt far longer than the controversies that surrounded other automakers like General Motors and Toyota. Related Video: News Source: BloombergImage Credit: John Macdougall / AFP / Getty Images Earnings/Financials Green Plants/Manufacturing Recalls Volkswagen Diesel Vehicles vw diesel scandal matthias mueller

Don't buy that crossover! Buy a cladded wagon instead!

If you're looking to buy a car soon, and you're like most Americans, there's a strong chance you're considering buying a crossover SUV. That's what people want nowadays. People like the tough, tall exterior that suggests adventure and preparedness, they like the high seating position, they like the all wheel drive many have and they like the practicality. Because of this, crossovers have rapidly supplanted typical cars such as sedans, wagons, and more as the most popular vehicles in the country. But they're compromised, too. They're often heavy, thirsty, and expensive compared with more conventional cars. The good news is, there's an alternative, a happy medium between the straight crossover and the traditional car. They're lifted wagons, and they're the best crossover SUVs around. And for those who may not know what we're talking about, we're talking about cars and wagons that have been given a suspension lift for more ground clearance and a higher ride height, and often have all wheel drive standard or optional. They also usually have chunky plastic body cladding to make them look tough and durable. Examples include the Subaru Crosstrek, Audi A4 Allroad, Buick Regal TourX, and Volkswagen Golf Alltrack, among others. Because of the suspension and body modifications, these vehicles fit the trendy crossover mold quite well. And in the case of long-running nameplates such as the Subaru Outback and Volvo Cross Country models, they even have some heritage as outdoorsy machines. They also provide the higher driving position that crossover buyers love. And in some cases, such as with the Golf Alltrack, we've learned they offer better ride quality than their road-oriented siblings. View 9 Photos So these tall wagons offer the key things crossover buyers want, but what makes them better than traditional crossovers is that they have the advantages of the cars they're based on. For instance, the aforementioned Golf Alltrack still drives mostly like a Golf, which is to say, it's nimble, feels peppy, and is easy to maneuver because of its relatively small size. We can't really say the same for the Tiguan, which feels generally more sluggish and uninteresting than the Alltrack. And we mention Volkswagen's compact crossover because it starts at nearly the same price as the Alltrack. Some of the difference in giddy-up can be explained by weight. Normal crossovers can be fairly portly, while these lifted wagons are notably lighter.

EPA message to automakers: You're on notice

With top administrator Gina McCarthy speaking about the "moral obligation for climate action" on Friday, the Environmental Protection Agency announced it would ramp up its oversight of the auto industry in the wake of Volkswagen's emissions cheating. In a letter sent to manufacturers Friday, the agency said it would begin examining cars to see whether they contained defeat devices "in addition to the standard emissions test cycles." "We are putting vehicle manufacturers on notice." Exactly how the agency plans to test for these devices – which are not devices per se, but algorithms contained in millions of lines of software code that govern vehicle functions – remains unclear. Christopher Grundler, the director of the EPA Office of Transportation and Air Quality, divulged few details in how the agency would uncover so-called defeat devices used by cheaters. "Not today – or actually ever – I'm not going to be describing what new ways we'll be using to detect these defeat devices." Later, he said engineers will have to "come up with some clever ways to do this." The only insight he offered was that the EPA, California Air Resources Board, and Environment Canada would partner on testing more cars for emissions and anomalies. Grundler also said the EPA would diversify its testing fleet. In addition to relying on vehicles provided by manufacturers, the federal agency will now also borrow cars from "private citizens" and utilize rental cars for tests. "We are putting vehicle manufacturers on notice," he said. Joint investigations between EPA and CARB have "been very successful in protecting human health and the environment," said Janet McCabe, the agency's acting administrator in the Office of Air and Radiation. "But we also know, and the Volkswagen violations before us now make it clear, we need to adapt and step up our oversight." That may include an increase in on-road testing in addition to the five emissions tests now more relied upon. The EPA owns and maintains 23 portable emissions-monitoring systems like the one used by West Virginia University researchers who first detected elevated levels of nitrogen oxide emissions from two Volkswagen diesel vehicles. Right now, they're almost exclusively deployed to monitor emission from heavy-duty vehicles, whose NOx emissions "dwarf" the amount produced by light-duty vehicles, which produce less than 2 percent of the total, according to the agency's figures.