>> i think we're getting sick and tired of being sick and tired of the same thing happening over and over again in afghanistan. i think it's time for us to look at closing up shop. and with that i will yield back. >> thank you, mr. chairman.

thank you, general campbell, for your testimony today, for your service, and for your family support over your decades of service to our nation. earlier this you i had the opportunity to participate in a delegation visit to afghanistan with mr. wilson, mr. mullin and mr. ashford, my colleagues on this committee. in addition to being with our troops deployed we visited with president ghani. what issues president ghani race was the threat of daesh within afghanistan. in your testimony today you state quote, daesh has grown much faster than kismet and has continued development in afghanistan presents a legitimate threat to the entire region. in the last you we've observe the movements increase recruiting efforts and growing operational capacity. i wanted to see if you could elaborate on specific what you were seeing on the ground in terms of increased recruitment effort, their operational capacity and their presence into 34 provinces in afghanistan.

>> thank you, ma'am. i'm sorry i wasn't there when he came through. in fact, i was back you i think testified. thank you for taking to this. daesh or isil kp continue to be a concern of president ghani, dr. abdullah emissivity forces. pakistan has issues with the daesh. i've talked to the general about the. if you talk to president ghani did not enter the recruiting what he would've told you was al-qaeda with windows 1.0. daesh is windows 7.0 and the ability to socially to get a and recruit. having said that, daesh and taliban ideology are different so they continue to fight each other specific in the province entities. that's what we've seen the biggest presence of daesh. to our reports throughout the different provinces, upward of probably 25 plus provinces we've had reports of daesh but the significant presence is really in the east, down in northern helmand a little bit and in the west. but predominantly in manga are.

i don't believe today when i was here february march i would've said it was nation. today it's operational emergency grant to continue watch, to make sure that the afghans apply pressure on isis or daesh to make sure it doesn't continue to grow. passion of their very barbaric, brutal, and it shouldn't instances of that in afghanistan as well by cutting off heads of captives, by kidnapping, by taking men and women, throwing them on a pile of ieds and blowing it. so didn't the afghan people have no time for daesh and atkins pretty forces want to continue to go after that. >> one hundred what is your assessment of afghanistan's approach to counter recruitment efforts? you talk about their success also should be which we're seeing throughout the middle east today and, frankly, globally. what is your assessment of what

president ghani and his initiation are doing encountering that's because i think a lot of it is the educational peace, trying to work that in universities, fighting daesh confiding this with the entire region. we've got to continue to reach out. they will hold a conference i think at the end of october why they bring it on the operational in the intelligence arms of all the surrounding countries to talk about daesh and how they can combat that together.

>> thank you very much. i yield back. >> i yield back. >> mr. angular. >> thank you, mr. chairman. i appreciated. general don't appreciate you being here. can you give us a size as a follow-up to the last question, can you give us a sense of the size of daesh and prices and a presence in the region? >> you're talking just a number of? >> yes, sir. >> this would be a guess but open-source reporting would be anywhere between 1000-3000. >> and your best guess on what that will look like in the next few years if not managed or contained? >> well, sir, they have, their stated goal is to build a course -- were some problems that includes afghanistan, parts of pakistan. they want jalalabad to be the capital so they continue to fight hard. they want to spend that north.

and unchecked they will continue to grow a base. but i deeply the afghan security forces understand this. there's operations ongoing today that are going after daesh. by both the army and the police in a base. >> we understand and we've read some of the taliban have gone over toward of these networks. can you give us a sense because of a change in leadership can you give us any other discussion or comments about of the reasons why they have made that transition? >> i think a lot of it, there's been a lot of ttp, pakistan taliban that is switched over, regular taliban and switched over or least publicly expressed allegiance to isil, daesh. i think some of it is they think they will get more resources. they look at it as maybe more media attention.

and selecting for a lot of these reasons yet some folks that don't want to come back into the government that don't want to reconcile the want to continue to fight. they will join something new like daesh that's coming up and is what's happening in iraq and syria, and for whatever reason why somebody w would want to do that i couldn't to you but they see tha that is something they wanted and they continue to join that. but again i think from original standpoint president ghani, dr. abdullah, general kehler can quantify this and continue to didn't have before grows out of control as you talk about. >> thank you children appreciate it, mr. chairman. i will yield back. >> thank you. mr. knight. >> mr. chairman, thank you. thank you, general, for your service. i just had a couple of quick questions. can you give me an idea of the definition of train and assist? when i went over to poland and some other countries, i was thoroughly impressed with the

polish soldiers and the interaction that we had with u.s. forces. so can you give me an idea of what train and assist means for the afghans, was going to happen when they're done, when you're through their attorney, what can we expect from them, how they're going to interact of those types of things? >> again, the numbers that we have right now as the chairman asked me early on, we really working on the ministerial level and at the ministerial level we're focused on what we called eight a social function. intelligence from, planning, programming, budgeting, executing, transparency can sustainably, strategic communications. what we do is our traders are now our new weapons systems and we have much more senior folks so where this war would've been about privates and captains and sergeants, lieutenants come out advisors are more senior generals, lieutenant colonels and girls and great senior civilians at their trying to bring this technical expertise to build the capacity afghan

ministry of interior and the defense. we let people after basically come uighur people providing them marksmanship. they do all that themselves. the afghans for the most part to all their training, all of that. the technical areas that they don't have the expertise in the maintenance areas, and pilots and growing the air force that's what we continue to have to do the train and advise and assist. >> they could. with the recent issues with russia and their strikes industry, can you give me an idea of the level of maybe to weekly or monthly interaction that you get with come and i would use different terms that i'm sure i use now, but maybe between commanders and people of the love, that the four stars are going to get together and talk while it's happening in the region. i know this region is quite a bit of the west of you, but it is going to affect maybe what

happens in afghanistan, maybe what happens, now we're getting strikes from the caspian sea. i would expect that there are kind of connected interactions between the commanders, between what's happening now. >> i talked to general austin several times a week. i do not e-mail and via teleconference, telephone conversations with general breedlove. of doctor general rodriquez. i know that they talk quite frankly to understand because as i sit up front, terrorism has no boundaries. >> correct spin so very good relationship between the combatant commanders there but i'm also talk to general austin through centcom is on the region on there. i had the opportunity to go to india to talk to some of the senior leadership in india to talk about afghanistan, how that plays to how their tidy with

afghanistan, but they need to china, pakistan. quite helpful to me and also to explain how afghanistan is typing to do. president ghani is reaching out to entire region i think is quite hopeful. last monday i was in germany for a day with the general austin we brought the chiefs of defense from five of the countries surrounding afghanistan to bring together to talk pakistan, turkmenistan, uzbekistan, disney to stand altogether to talk about racial issues, border issues, drug smuggling. what they can do to enable each other to fight this common enemy so that was quite a good. >> very good. thank you, general. thank you, mr. chair. >> ms. duckworth. >> general, thank you for being here. i want to talk all the bit about the capacity of the afghan troops that we are training. from your testimony you characterize a security forces performance of the afghan national defense treaty forces as uneven come inconsistent,

still require broad support. you talk about the fact that without key enablers and competent operational level leaders i can't handle the fight alone. in contrast you talk about the iss f. and how they are actually able to mount operations and seem to be much more successful. what i'm concerned is a we seem to be talking a lot metrics buttercream feta security force in terms of numbers. how many to rethink a need to publish the mission as opposed to the capacity or the quality of the forces? i just think that we are a little over folks are building a troop levels in terms of quantity. you laid out a few significant threats we face in afghanistan and the region. as the president evaluates what right trip advisor levels are, could you explain what the primary issues and variables are the continue to plague the security forces the ability to carry out its mission independently and can present to the asf who seem to have the

capacity to do this on their own? >> thank you for the question. i was very tough on the afghan security forces in lebron comments and i talked to the afghan part about all of those, and again just had that type of relationship to be able to continue to improve and i value that both the moi and mod. and again we are not at the levels of the brigade. we are on four of the six and were at the ministry love. some of those comments focus at this universe you. what i told president ghani is if you pick the right leaders and put the right leadership in place and hold him accountable, that's good to take care of about 70% of issues that we see day to day out of the. one of the reasons the afghan special forces, assf, are where they're at is because we continue to provide train, advise and assist the tactical level with them today. we don't do that with all the conventional forces. they also have the ability based

on their size, much smaller, an attorney that they they go through that have a very good fourth generation cycle so they're able to go training, able to take some leave and and another will go into into the fight. for the most part and the rest of the police and the operational force they don't have the. if redundant helmeted vendor for three years you will probably have been inconsistent by for three years in tibet very little opportunity to train, the opportunity to take leave. they are really which hard at how they got out at work this force generation cycle into the conventional side and we want to get after that as one of their priorities, if they had a winter lull after the fighting season. i think if they can get their, their performance would continue to improve. they have some very good young leadership at the captain, lieutenant colonel level. that got to continue to progress, they need more experience. although i was very, very tough in some of the words, i do believe that they continue to improve and that they are very

resilient. and with continued time, able get much, much better. >> so would one of the key contributing factors, or high a wall rates, this lack of sufficient force generation level, colleges as my second question and you can take the rest of the time to edit them since it is throwback thursday and could use an old-fashioned term. i do feel like there's a real lacking in the green tab leadership training that's going on here, that those front-line leaders, and the new testament to talk about the fact we need to execute delivered cross operations that are planned and resourced, they are successful. what is going on? we have behind a wall levels, even more junior than your lieutenant colonels but even younger than that? is that woods going on? >> i think you're right to the attrition level are all out of the race because attrition and the awol is because of poor leadership. they don't have sergeants, they

don't have company command, platoon leaders that know everything about them and take the welfare into consideration likely due back in all of our services. they don't have that noncommissioned officer corps. that's the backbone of all our services that would look after those types of things so there with you about. the force generation cycle come if they got a bit of that would reduce the level of attrition as well. what we're trying to do on the leadership peace and i know you would be familiar with this on pre-commit of course the we've initiated a pre-commit course for their lieutenant commercials -- colonels. yet to go through the same thing. we have started, have not run yet, a capstone type course for the general officers. that will get initiated, so the human capital leadership peace we have to continue to work spent this year 14 for. we have either no how many more years we can keep doing this, but thank you for your testimony. i yield back. >> mr. russell. >> thank you, mr. chairman.

i guess as a look at these colors on the wall behind is, on them are leaving streamers from the philippine campaign. from 1899, to the mid-1913-15 period is windows 11 streamers were earned. we debated the same things in this congress about the worthiness of, can we train the philippine constabulary? can we track down although and bring to justice? can we deal with the insurgents and immoral wars? can we, can we, can we? and yet we did. we transition the government successfully. we did capture him and execute them, bring them to justice. we saw our warriors achieve all of that despite what we hear in the halls of congress often question. i look back on 9/11. at that time two-thirds of the

country was under the control of the taliban. very little of it was under the hands of anyone that had freedom. girls were not allowed to go to school, couldn't fly a kite. it was from to play a radio ojibwe chose in kabul. i remember it. we've seen successful elections in the transition of government successfully. i remember working with the british second parachute regiment and a third special forces when the afghan national army was nothing but 600 people that showed up. and now we see 150,000. and, mr. chairman, what strikes me is that isn't it wonderful that we are debating 150,000 troops in the field and their capacity for intelligence and command and control in complex operations in urban and rural and five at? thank god we have reached that point to get to that point, and

we are having a debate in this discussion, and it's due to warriors like this better sitting before us that makes that possible. general campbell, thank you for your perseverance and patience and enduring power questions. the status of forces agreement, often we saw that that was problems with the iraq experience. and i know we're much further along with president ghani, and i know from having worked personally with dr. abdullah, afghan national security conference in geneva, switzerland, in 2002, the we get some capability there in kabul with leadership. are there any limitations on the status of forces that you can see moving forward? as we morph the troops, they're based in the sea, not strikeforce can not train and assist, any shortcomings that we can assist you with on the status of forces agreement?

>> i've seen an adequate the issues i've got to president ghani and we worked through the but absolutely none right now. >> that's very encouraging. he also made note that the strength of the ana was that it was not fractured. i think that's an important point. they haven't broken. every taken ground. they have regrouped. they are determined to fight. they don't drop their weapons and when. could you speak to that a little bit? >> people tried to compare iraq and afghanistan. i tell them it's absolutely different in helmand in july time frame, taliban took over district center. into the afghans all bit of time to reorganize. they changed out leadership. they put a battalion commander in jail because he ran so did make the right direction. they be supplied, compaq in and took over the district center. it took them a couple of weeks to do that. they were very methodical as they went about that but they eventually got that done. they did that much quicker and a couple of days their back inside the city undertaken a hard look

just like all of our service will to figure out why that happened to make sure it doesn't happen someplace else. that's a sign of a professional army, professional please come and a scientific of the ones, pictures with her security forces, quite frankly president ghani is the commander-in-chief and that's different than what we've had there before. >> i think about our own history in the united states army. 40 years after our formation, we broke and ran and left this capitol exposed in 1812 and it was set on fire. i'm glad that our nation didn't give up on us at that time. the authority to strike daesh, are you allowed any independent audit any prohibitions on your command level to strike daesh independently? or doesn't have to go through the afghan structure? >> i can strike insurgents if they are a force protection issue to our forces.

>> thank you, and thank you, sir, for your dedicated service to our nation. thank you, mr. chairman. i yield back. >> thank you. mr. smick sally. >> general campbell, good to see again. thanks to continued service to her country and everything to do. it was great to see him make when we're over there on a congressional delegation. i know the current situation with the hospital is under investigation by want to ask about the targeting process in general. since last time i was over there in uniform with my a-10s we were, in my time and air operations and we would usually strike under two different circumstances either counterterrorism dynamic targeting in which case decision a positive identification a clever damage was done back at headquarters with approval to demonstrate. or we were under a joint promote tight controls control, jtac in close air support. we had u.s. troops very much to put all of the nation at the time but even sometimes they jtac was back at headquarters and not in the fight we are hitting but they were still the

ones that were calling the shots and making sure we had the collateral damage assessment. can you walk me through and maybe this is not in a city can make a classified setting with a target process is right now? both efforts just on the side but also if the afghans are asking for support how do we go to that and make sure we have pid and cdb? i imagine you see challenges we have less for presence and being able to get that tid and cdb done correctly. >> if you needed a class that we can do afterwards. afterwards. >> i would rather go to a classified session. we continue to ensure we have pid. we are very, very precise. it's very rigorous. and so i can cover all those in a classified -- >> is it safe to say with the troops being pulled back more to centralize locations and less numbers that is just more challenging for us to get that good intel in order to reach tid? >> it may be more challenging that means i would not --

>> absolutely. i totally agree, agree. is because more of a challenge situation or have the afghans as possible, again we can put without a classified setting. >> is the afghans as for support like to do almost everyday pedestal has to go through our processes. >> when we talk to you in a there was some setbacks i would say, or delays them and moving some the things ford we're trying to do with the ansf because of the fragility of the unity government being formed and some delays and setting at defense minister to a lot of that seem to brought something this dance do. the uncertainty as to whether we are going to be there and how longer going to be there and what time we are pulling out was greeting when we talk to individuals in the afghan security forces and parliament and others that insert it was great a lot of angst. just delaying other things we're trying to move forward. has anything changed since we talked in my and have things

gotten better? >> i think in some areas better, some about the same. although the ministry as an acting minister he has really taken charge. i've got great trust and confidence any. he has a great vision for the future of the ministry of defense. we all thought he would be the minister, and on july 4 he didn't get to the parliament but he has been an acting capacity, doing quite well and i think would do good for the parliament there to ensure that the minister continue to serve in a position to in other areas there have been some holdbacks waiting for, there will be people that are waiting to find out where the us is going to go post 2016. i think they are comfortable for 2015 into 16 but after that we did get a lot of questions on that. >> what else can we do to help build the afghan national air force and the core support adobe they need? i know you touched on a new testament but can you just sure what else we need to do, because

if they don't have cash as a significant shortfall for them. >> i think everybody back here, always become everybody is working hard to get after that. part of this is going to take that it takes two or three is to get a pilot through. afghanistan understands it to make tough decisions. two or three years out of to put the right number of people in with the right training to get through pilot training at the don't make decisions now they will take longer and longer so we work with a very hard on that. i think everybody is working hard to get there. there are some restrictions that inhibit or have inhibited in the long haul odds are in my 35's. when they started the fighting season they had five. now they have to. at the end of his fighting season pace of structural integrity of the aircraft they won't be able to fly until be counted in my seven teams which are not designed to be post their support platform. we have helicopters come in as an advocate for fixed the fixed wing aircraft that we talked

about, that will help. we are taking a holistic look at what they really need based on the continued fight, where and care, the attrition level of the aircraft come back i think. >> and again thanks to you and your family for a continued faithful service to the country. i yield back. >> thank you. general, appreciate you patiently answering all of our questions but more importantly, i very much appreciate you and those who serv served with you r what you do every day to protect the security of our nation by working with the afghans and in other ways. it's challenging circumstances. part of those charges are extra and five at. part of any are placed upon you by the chain of command. but i think it's clear to all of us that you are making most, the most of the situation for the country's security, and we are very grateful for your service. with that hearing stands adjourned. >> thank you, chairman. [inaudible conversations]

[inaudible conversations] [inaudible conversations] [inaudible conversations]

[inaudible conversations] [inaudible conversations] >> i was surprised when general campbell said, although i did say something like this before,

we have really been training the army for eight to nine years come air force for about the last three. why do i we wait so long? maybe we are so absorbed in defeating al-qaeda, et cetera that is taken that long. i don't think it was, you know, malfeasance but there are legitimate frustrations. ..

we are trying to work with others. you just heard someone today mentioned poland. we have allies a different capabilities. how well are we organized, equipped, prepared to work with those different capabilities? i think this is a big, very important question. >> are those hearings over's income or will there be education? >> both. so it's try to understand but also hone in on what we are doing now and are the things to do differently. >> have an answer. >> i don't know. i don't know.

reassurance and stability to this fragile unity government, so they know we are not bailing on them. >> i don't think nato will be there every are not there, be other countries will contribute. >> why do you think they have not worked up to this point? >> that is what we want to explore not only with afghanistan but other countries as well. i do think that we should not be too cavalier at how hard this is. someone today said they were like 600 folks in the army

guarding the presidential palace. and they have been under constant war. i don't want us to have this arrogant attitude afghanistan and iraq and syria here recently. it is our jobs understand why things have not gone as well as he wanted and to see what we might have done differently and what we might do differently in the future. maybe we don't have the right authorities, which is congress' bailiwick on train and equip issues. i think this is a big question that applies and lots of reasons of the world

we can't go fix everything ourselves, and yet the security situation in these faraway countries affects us. >> on the house leadership race, are you concerned that freedom caucus members will ask a potential speaker to agree? >> i would be concerned if any group tried to put conditions on anyone running for leadership. i don't think that is a good idea. speaking of which, i am headed there. i am sorry that you cannot join in the fun and interesting. [inaudible conversations] >> presidential candidate ben carson spoke at the national press club today about a new book he wrote with his wife called a more perfect union, what we the people can do to reclaim our constitutional liberties. you can watch the remarks tonight on c-span at 8:00 p.m. eastern. and tomorrow, the 20th

anniversary of the million man march, the march on the national mall in washington dc starts at 10:00 a.m. eastern, live on c-span. >> our road to the white house coverage a presidential candidates continues from new hampshire monday morning live coverage from the no labels problem solver convention. a republican in presidential candidates talking on the issues of uniting the country on job creation, balancing the budget, securing social security and

medicare and making america energy secure. tuesday afternoon we are live with ohio governor as he speaks at a town hall meeting, and on wednesday live at seven pm7:00 p.m. eastern, former florida governor jeb bush will speak at a town hall meeting in concord. c-span campaign 2016 taking you on the road to the white house on c-span, c-span radio command c-span.org. >> this morning house republicans met behind closed doors to discuss the process for selecting a new speaker of the house. the meeting was one day after majority leader kevin mccarthy's announcement that he was dropping out of the race to replace john weiner as speaker. reported asked questions of several of the republicans whose names have been mentioned as potential candidates.

[inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] >> that is a speculation. [inaudible question] >> who are you backing? [inaudible conversations]

>> when do you think he might make an announcement? [inaudible conversations] [inaudible conversations] >> are you considering a run for speaker? >> everyone move down please. move down. [inaudible conversations] >> the house republican conference meeting this morning behind closed doors lasted about one hour. several congressmen answered questions from reporters.

>> what was in the note to paul ryan today? >> if i wanted you to know -- [inaudible conversations] >> what was in the note? >> he is a good friend and i respect him a lot. >> are you supporting them for speaker? if you were to get in when you supporting? >> 100%. >> owes the pressure on you? >> a pressure on me is that i will be late for a meeting with elijah cummings. >> what is it going to take to get paul ryan? >> he would have to ask him that question. >> is it just about his wife and family? >> when you say just about, comeabout, come on, man, that is pretty important, isn't it? i will let the chairman

speak. the speaker will set a new election day. >> what would it take for you? do you want the job? >> does anybody? we will find out. >> i think paul could get everybody. >> darrell i say? >> potentially to be a candidate. >> you would have to ask him that. >> is it look like people want to support him? you would have to ask him. >> is the speaker going to stay on? he wants to go out. >> i do not know when he said the duty four.

>> wait. just tell me what you are saying. >> quick. we have a very good conference, working together, trying to work together. a lot of speculation. paul is looking at it, but it is his decision. if he decides to do it, he would be an amazing speaker, but he must decide on his own. >> what did he mean by the party hitting rock-bottom? >> you heard it here. >> should get it right.

>> still committed to making this up. >> members will go home. >> i think we will have additional candidates. i always say that there should be more people in this race, not less. i look forward to that discussion. >> like i said. in fact, if they can do that >> can postpone election. >> i did not here any of that.

>> other ways to have a retreat? >> clearly. someone that ii would support and i would love it if he did it. he is a drumbeat inconsistency and saying he is not going to do it. >> would you drop out? >> of course i would support him. part of the reason i got into the race is because people like paul ryan were not stepping up to do it. i offer myself as part of the solution. i would support the nominee. >> will you run against him? >> no, i would not run against paul ryan. let me try to be as clear as ii can. i would support paul ryan. i hope that he does it, but we have got to get someone who wants to do it and will fight for it and make the most of it.

maybe his approach changes, but he is certainly in my mind the most qualified person to do it, and i hope he does. >> have you talked to him today? >> no. >> does the speaker still plan to step down on the end of month? >> he was clear. i have to markup. >> one side of the hall call police. >> right side, please. >> thank you. >> go off somewhere and talk about this. >> i did not here that today. maybe that is what therethey are going to do, but i did not here that today. >> , endorsing? >> unchallenging the process. and i'm going to make that. >> you are going to run all

the way? >> no matter. going to run in this congress, yes. until we get to that date, whatever day. >> he will be a candidate? >> no, i said i was running in the conference. so there will be a date set for an election, and i am running. >> if you don't get the nomination in the conference will step aside? >> i am just running for the conference. >> what you back the conference eventual nominee? >> at the end of the month. >> well, we have got one now. >> have you spoken to mr. ryan about the prospect of running? >> i have not. >> whoever has been in conference. >> i just saidi just said i would focus on one thing, winning contests in this race. >> why the right choice?

>> like i said before, we have a power base system. all i want to do is do what i'd did in florida, push down that pyramid of power. that's it. and i will run it against anybody, personality your name. i am just one for thethat set of principles that says we will have a principled base with members of congress. >> let him go. let him go. [inaudible conversations] >> do you think it was appropriate to delay the election like that? >> necessary. >> do you think they would have a late -- delayed the election? >> no.

>> i think that it will be done. >> one of the speaker candidates? done something morally repugnant. >> i don't know. >> if one of the candidates had -- like i said, talking about candidates for personnel. number driven. that's it. the panel has agreed to it. >> going to walk up. >> presidential candidate ben carson spoke at the national press club today

about a new book you wrote with his wife called a more perfect union, what we the people can do to reclaim our constitution liberty. you can watch his remarks tonight on c-span at eight pm eastern. and tomorrow the 20th anniversary of the million man march,man march, the march on the national mall and washington dc starts at 10:00 a.m. eastern , live on teetwelve, and that 1:00 o'clock eastern the head of the nation of islam will speak to the gathering. and on sunday, california congressman adam schiff, the top democrat on the intelligence committee who will talk about the fight against isi s and hillary clinton's upcoming testimony all on newsmakers on c-span at 10:00 a.m. and 6:00 p.m. eastern.

>> the sunday night former sen. and presidential candidate gary hart on his new book the republic of conscience, comparing our current government to the republic he says our founders intended. >> the founders used the language of the ancient republic, greece and rome, and warned against corruption. their definition of corruption was not bribery or quid pro quo money under the table. it was putting special interests ahead of the common good. and by that definition washington today is a massively corrupt place. >> sunday night at 8:00 o'clock eastern and pacific on c-span q&a. >> volkswagens top us executive apologized for the automakers cheating on emission standards. testify before the house energy and commerce committee he said it could take more than a year to fix. [indiscernible]

>> could members of the media move out of the way? >> could members of the media please move out of our way so we can begin the hearing?

>> let me start off by saying my 1st car was a volkswagen beetle. i could take that thing apart and put it back together and it actually continue to work. all the myself because the bill in the volkswagen had a legacy to be people friendly. i love that car, not so much as to call it breath, but i love that car. but adjust the car to mira that word trust is the key factor in building customer loyalty. and that trust is what helped build volkswagen because we believe it is a

company that looked out for customers first. three1st. three weeks ago car owners around the world were shocked to learn that volkswagen admitted it installed software for a number of years and millions of his diesel models that effectively defeated emissions controls during routine driving. this days fall the environmental protection agency public announcement on september 18 that it's sufficient evidence to support allegations the beetle he was cheating on its emissions test. as epa reported, when the cars were subject to admission testing the diesel vehicle switched into operational mode designed specifically to pass the test and then switched back to a different mode during normal driving that emitted nitrogen oxide up to ten and 40 times the federal limits. the united states alone some 482,000 volkswagen and audi models were affected by the cheating software. worldwide this software was used in estimated 11 million vehicles involving several vw lines.

and related issues about emissions compliance generally. at this morning's hearing morning's hearing we will receive testimony from the head of volkswagen american operations, and from epa officials tasked with ensuring automobiles on american roads me federal environment of standards. in addition, the subcommittee tends to pursue answers to critical initial questions concerning the troubling revelations, what happened, who was involved, and most importantly why. let me acknowledge that he is appearing before us voluntarily today, and i say that i expect he and the volkswagen organization will continue to cooperate with our inquiry. this means providing documents and information to the committee as quickly as possible,

including those which have already been discussed publicly eight connection with the various board members -- board meetings in germany. there are a number of core questions we will begin to pursue today, both for volkswagen and the epa, most critically what happened, who was involved, live these actions are taken, and we have a number of questions concerning the impacts of these decisions. i hope today mr. horn can provide important context and expand upon the facts he represents in his testimony. we look to him to explain the current understanding of vw executives about what was done to these engines and if it was done to deliberately deceive government regulations and regulators. and what is being done to fix the problem and make all those who have been affected by their actions? wagon -- folks doing to fix the problem? they made a choice to move forward with engines that now suggest were not compliant. the illegal software was initially deployed in the 1st generation of these diesel engines which account

for approximately 340,000 apparn the control systems, these engines have software that remained in place. what tothe company -- the company understand about this software cheat? and what does it mean for fixing them? will some big is your than others? we have questions about compliance and recall programs. i hope we get answers from that agency. why did the epa standard tests and audits failed to detect? what are they doing to ensure any effect, requiring the automaker does not affect performance? therding this matter, 480,000 or so vehicles implicated in the scandal represent only .2% of the cars and trucks on the highway. so far, we have no evidence of the software used by volkswagen

is used in others. our witnesses from volkswagen and the epa can see the comments. the behavior which volkswagen admitted to represents a violation of trust. it can be seen across the united states and the world as people grapple with the application. need to develop a clear understanding of the case. and this hearing will be the first important step to the goal. i now recognize the ranking member of the subcommittee for five minutes. >> thank you, mr. chairman. and the spirit of bipartisanship in the investigation, i want to you my first car was also a volkswagen. w beetle that i hertha from my grandmother. i will tell you that i still miss that car. it did not have any lines of

computer code required to operate it. in this situation, fast-forward to today, we know some things. but we do not know enough. that is why i'm glad we had this investigation. we know that in may of 2014, west virginia university published a study commissioned by the international council on clean transportation that found that on road commissions were well above standards. they also did not match the emissions under testing conditions. we know that volkswagen try to justify the discrepancy with excavations of technical issues andvolkswagen initiated a voluny recall of nearly half a million vehicles. yet, when the california air resources board tested the fixed

vehicles, they found emissions were still above the legal standard. and we know that by july of this year, the epa told bw that they would not approve the model year vehicles for sale unless the emission details to be explained. volkswagen was forced to come clean. and they ultimately confessed that they had installed a defeat device and diesel cars designed to circumvent epa emission standards for certain pollutants. we know this defeat device sets when they were undergoing testing. and inserted control systems. and we know that during normal road use, the controls were reduced. and the car for producing up to 40 times more nitrogen oxide standards.owed by we know half a million cars in the u.s. might be affected by this.

mr. horn, i'm glad you came to testify here. while we know all of the things i just talked about, there's a lot more things we do not know. and we need answers for them. for example, volkswagen has not revealed how the device affects the engine. white was installed, and how it was able to evade the tests? you have not revealed when and how the engines equipped will be fixed. whether the fix will affect fuel economy or performance of the vehicle. you have not revealed what volkswagen told regulators over the last year as epa and the california board were trying to figure out why the emissions were out of compliance. you have not revealed whether the voluntary recalls that volkswagen set in place in 2014 were millemerely a ruse.

were they trying to figure out what was wrong and fix them? for did they know they had defeat devices were only trying to buy time with regulators? you have not revealed who is responsible for this game. we have all seen the press three points, and we can speculate about what happened and why, but until volkswagen comes forward with answers and provides assurances we can trust what they say, the american people, regulators and comers are left in the dark. i hope you come prepared to answer some of these questions. i also hope vw will be prepared to work with this committee as we move forward. hundreds of thousands of owners invested money and trust in vw. carsof them bought specifically because they were seeking environmentally friendly vehicles. now they are left with cars with much higher levels of pollution,

they don't have answers about when or how their car will be fixed or what kind of car they will be left with. earlier this week i visited a volkswagen dealership in denver. i saw the control and equipment on the vehicles firsthand. these cards account from us 25% of the sales at that particular dealership, and a significant percent of sales in colorado and across the country. now because they cannot sell them, these cards are sitting on the lot. say, it isrman, you a small percentage of cars on the road in the u.s., it is a tremendous economic impact to the steelers and also to be consumers who don't know what is going to happen to their car. that is the key answer i'm looking for today. what do we do moving forward. this subcommittee has been here

before. in the last 15 years, we have had ford, firestone, gm and more. we were able to get information from all these committees help us understand what happened. most importantly, we used information to chart a path forward and help consumers affected. i hope volkswagen can similarly tell us what is happening, and i hope they will get beyond this series of terrible decisions and do something to restore the public trust. thank you. now recognize the chairman of the committee from michigan for five minutes. >> good morning. it makes a car a volkswagen. that ad campaign swept the nation in the 90's. ltishs long enjoyed a cu following. through the years, something and cheating and

betrayal became part of the game plan. there is a lot we don't know about vw's actions or motivations, and attempting to skirt emissions standards. regardless of intent they have a trade the trust of regulators, dealers and suppliers, and most important the driving public. probably the most famous congressional hearing question is what did you know and when? asked by senator howard baker in the 70's and watergate. now we learned you knew 18 months ago. we add, what did you do to fix it, and come clean versus simply going along? ultimately the saying rings true, cheaters never prosper. we have never -- many questions about how we got here. why would one of the world's largest automakers go to lengths to avoid emissions requirements? who is responsible for these decisions and why did they, for

years, even as technology improved, continued that path? if they were willing to cut corners here, what else have they done?how will you fix it and when ? will it affect the performance? unraveling these questions will take time. i don't expect we will discover it the answers today. it vw is serious about rebuilding of contrast, the leaders need to demonstrate commitment to answer these and questions haunted by the actions. this requires transparency, cooperation, and clear communication with this committee, the epa, and also with customers, suppliers and the public. vw will inevitably pay a steep price from this dirty little secret. how it responds will go a long way towards rebuilding or further eroding the public's trust. they must consider the

implications for the thousands of americans it employees, -- it employs, including the facility in michigan. they are proud of the rich tradition enterprise with the success of the automobile. michigan is one of several states that has launched their own investigations. all automakers must advance by imagination, not by gaming the system and breaking the law. we will get additional insight today but the investigation is just beginning. this hearing is an important step as we receive documents, information, and new details are certain to emerge. i look forward to getting to the bottom of this as quickly as possible. i take this very personally. act toauthor of the protect the public, congress was very clear in the work to protect consumers from abuses from automakers, including steep fines and criminal prosecution. a has betrayed the nation,

nation of regulators, loyalists, and innocent customers. it is time to clean it up or get off the road. i yield the balance of my time. >> thank you, mr. chairman. mr. horn, thank you for being here. i think it is appropriate you come before the committee, you apologize for the actions, and that you and vw take full responsibility for what has transpired. it is disappointing. i'm aware our governor has been at the chattanooga facility. i know that the governor, state legislators, the other members of the delegation and i are quite concerned about this. you have a lot of hard-working, honest tennessee people who are at that facility. we are concerned about the actions of a few.

we are going to be very precise with you and vw. it is, as the chairman said, basically the who, what, when, where, how and why. why you did it, how you did it, when you did it, lending you -- new, did it go across the brand, was it in new regulations, was it pointed at climate regulations? this is a systemic failure. someonelso point out, could say it is a safety issue. but i say it is an issue of integrity. we appreciate you are here. we look forward to hearing from you. i want to yield the balance of

my time to the vice chair of the subcommittee. >> thank you. thank you mr. chairman for holding the meeting. the others of you have spoken --ut, there should be zero tolerance for this unethical behavior. that is why the hearing is important to us. people need to understand why it happened and how and how it can be resolved. they feel they have been deceived. they were actions taken by the attorney general to file action. i want to touch on the university. you used a fraction of the money we spend with the epa to make this discovery, and they found out, one of the cars they tested was 15 to 35 times more admissions than allowed. chairman, i want to touch on the fact that this opportunity,

and research dollars at work, this was a university able to accomplish this. i'm looking forward to getting clarity to what this is. thank you for holding this and the -- i look forward to the conversation. mr. chairman, thank you for holding this hearing. we are here today because volkswagen lied. they like to regulators, customers and they lied to the american people. we all have many important questions that deserve answers. what did volkswagen due to the cars, why, and who knew this was happening in germany and here? this whole scheme makes me question how much we should trust volkswagen, and to be honest, the committee's investigation makes me question how much we trust the oil industry in general. let me remind you of the difficult relationship with the

oil industry. in 2010 the committee investigated the recall of 9 million vehicles worldwide are unexplained cases of sudden unintended acceleration. dozens of people died in accidents linked to run away toyota vehicles. in the end it was determined to new about the problems -- toyota knew about the problems. in early 2014 we launched an investigation of general motors condition -- ignition switches that kill people. they found individuals within gm knew about the deadly defect or nearly a decade before the company initiated a recall. later in 2014 we learned of the exploding airbags in vehicles made by at least 11 auto manufacturers. the recalls began as early as 2008. they continue to investigate whether recalls are necessary and they have not determined the

root cause of the defect, which has killed a number of people worldwide and injured hundreds more. aw we have volkswagen, company that told regulators that their vehicles met emissions standards but actually installed devices to bypass controls. over the past five years, the three largest automakers have come before the committee to admit they had cheated the system and lied to american customers. this seems to be a pervasive of deception in the auto industry. it has to stop. they need to know the are safe on the road and they need to know when they decide to buy a car they are getting what they paid for. to auto industry has chosen perpetuate lies and mislead consumers. the american public is not crash test them is and cannot be treated as such. i understand you will not have all the answers today, but don't hide behind the internal investigations excuse. it is time for volkswagen to be forthcoming with customers about

what you did to these cars and why. we deserve an explanation. i would like to yield my remaining time to ms. czajkowski. >> we look here a lot from outside in today. we will hear apologies, i'm sure for the deliberate deception of the american people and federal and state public health agencies. will try to get to the bottom of this issue and fully cooperate with investigators. we will hear how the use of so-called deceit devices are incompatible with volkswagen's corporate culture. i want to tell you, i don't buy it. the american people, the epa and their counterparts around the world, have been defrauded by volkswagen. the company's word is not worth a dime. the only thing i want to hear today is exactly how will volkswagen make this right by

consumers. saying it will take time to design and implement a six is fix iscient -- af insufficient. if they want it, every volkswagen, clean diesel vehicle owner should be get -- getting their money back. all of it. the american people deserve answers. there are a lot of questions, but there are also thousands of owners of clean diesel volkswagen's out there. what they want to know is what are you going to do for them, and when. i say now. i expect those answers to be provided today, and i yield back to the ranking member of the full committee. >> thank you, mr. chairman. anyone else on this side, i would yield back. >> thank you.

gentleman yields back. >> i also ask unanimous consent by the opening statements he introduced to the record. you are aware the committee is holding an investigative hearing, and when doing so has the practice of taking testimony over both. -- under oath. you have any objections? thank you. we advise you under the rules of the house and committee you are entitled to be advised by counsel. do you advise to be advised by counsel under testimony today? in that case, would you please raise your right hand? do you swear the testimony you are about to get is the truth, the whole truth and nothing but the truth? >> thank you. yes.itness answered

you are now under oath and subject to the penalties set forth in title 18, section 1001 of the united states code. you may now get a five-minute summary of your statement. make sure your microphone is on and close to you. press the button. thank you very much. chairman, other members of the committee. thank you for inviting me to testify before the committee. my name is michael horan and i'm president and ceo of volkswagen group of america. i volunteered to come here before the committee at the outset of the inquiries in an effort to show our commitment to cooperation. we have not had the opportunity to review all aspects of this,

and the investigation is just beginning. therefore, my testimony and answers will be by necessity, has to be considered preliminary and best on my current recollection and information. on behalf of the company, my colleagues in germany, and me personally, i would like to offer sincere apologies, sincere apology for volkswagen's use of programs that serve to defeat the emissions testing regime. in the spring of 2014 monday university study was published, that's when the universit public that he was published, i was informed the epa regulations included various tendencies for noncompliance with emissions standards, and also that the agency could conduct engineering tests on their own, which could include analysis on defeat devices or other auxiliary equipment. let me be clear about this.

when i was told about the epa orcess, i was not been told did i have any reason to suspect or believe that the vehicles included such a device. that theo informed company engineers would work with the agencies to resolve the issue. later in 2014 i was involved -- informed there was a specific plan to ring the vehicle into compliance, and that they were engage with agencies about the process. volkswagenr 3, 2015 disclosed at a meeting with the california group and the u.s. environmental protection agency from model years 2009 until 2015 contained a device in hidden software that can recognize whether a vehicle with being upgraded in a test

laboratory are on the road. that made the goals amid high levels of nitrogen in the road rather than laboratory testing. in the recent ongoing discussions with regulators, we described to the epa that the arategy also included software feature that should be disclosed to and approved by them as an auxiliary emissions control device which is also called a ecd, in connection with a certification process, to show that we acted immediately, we have withdrawn the application of certification for all of those vehicles and we are now working with the agencies to continue the certification process. these events, and i fully agree on this, are deeply troubling. i did not think something like this was possible at volkswagen. we have broken the trust of our customers, leadership, employees as well as the public and regulators. let me be clear, we take full

responsibility for our actions and we are working with all the relevant authorities and cooperated -- in a cooperative way. i'm here to offer the commitment of volkswagen's work with the committee, to understand what happened, and how we will move forward. u.s. department of justice, attorney general, as well as other authorities are fulfilling their duties to investigate this matter. we are determined to make things right. this includes accepting the consequences of our actions, providing remedies and beginning to restore the trust of customers, dealerships, employees, regulators and the american public. ofwill refer the reputation a company that more than 2 million people worldwide rely upon for their livelihoods. our goal is to develop a remedy for customers. while much work is to be done, i would like to talk about how we get from where we are now to that goal. we are conducting investigations

on a worldwide scale on how this could have happened. responsible parties will be identified and held accountable. thoroughly investigations have already begun, the any information and development is preliminary. we ask you are understanding here it it is important for the public to know as the epa said, these vehicles do not present a safety hazard, and they remain safe and legal. third, technical teams are working tirelessly to develop remedies for each of the group of vehicles. the solutions will be tested and then shared with the responsible authorities for approval. there are three groups of vehicles involved each containing one of the three generations of the two diesel engines. they will require different remedy but this can only be our first step to the customers. fourth, we will examine processes, and have

measures to make certain something like this cannot happen again. fisk, we commit to regular and open communications with customers, dealers, employees and the public as we move forward. we set up a designated service line, and website. we have a count for this communication. -- channel for this communication. this outline of a path forward towards the goal of making things right. nevertheless, volkswagen knows we will be judged not by our words but clearly by our actions over the coming weeks and months. these events are fundamentally contrary to volkswagen's core value tos of proving customers and responsibility to the communities and environment. they do not reflect the company has i know, and to which dedicated 25 years of my life. our plan in tennessee is the best factory in reducing

emissions. i apologize again on behalf of everyone. we will comply with authorities. we will find remedies for customers and we will work to ensure this will never happen again. thank you again for allowing me to testifying, and i look forward to your questions. thank you. >> i now recognize myself for five minutes of questioning. on september 3, 2015, pw hadtted -- pw admitted it model 2009evices in and 2015 vehicles. to the best of your models -- knowledge, did pw stall software for the express purpose of defeating emissions controls? understanding,r it was installed to this purpose yes >> here it a new testimony, of noted you were made aware

potential emissions compliance is the spring of 2014. you also noted discussions at the time about penalties for noncompliance in the epa's ability to test for devices. at that time, were you aware or informed that these vehicles contained defeat devices must work mr. horn: --? mr. horn: no. >> when did you first learned that they contained the device? mr. horn: around the september 3 meeting, couple of days before. >> why were you having discussions about devices in the if there was no knowledge or concern that these vehicles contained a device? mr. horn: the university of west virginia made the study. there was a jetta and thought, -- a passat, and another off-road vehicle.

results were communicated. in this context i was told by our experts in the auburn hills office, and four months into the market, that of course not complying with emissions standards is relating to fines and hefty fines, specifically in the u.s. those experts, including the german technology department, checked on the study and the results. you also mentioned it was a small team. results have been published with emissions that went overboard. that they were checked. -- they also looked at responsible departments and there were a number of departments in germany, and how to possibly fix this. there was the notion in this indication that also the epa or agencies could check on their --, which to mine degree

four auxiliary devices, including defeat devices. at that point, i had no understanding what it was, and no indication whatsoever that a defeat device could have been in our car. >> let me go back. the new chief executive has been quoted in media reports saying that only a few people were involved with deception. i don't take much comfort in that, especially knowing volkswagen has been known for superb engineers and mechanics. should they have picked up on this question mark is it true they dump on this because the cars could not meet the more stringent emissions standards for diesel engines? yes, tear last question it appears to be. the newspaper articles, i don't want to quote. the investigations are preliminary. one week the group did the

and then the, entire investigation on this matter is turned over to an whichal agency law firm is now going through the system outside advice. >> what we find amazing is that virginiarsity of west discovered this, and your army of engineers and talented mechanics did not know something was amiss. i'm sure we will have more questions. i want to ask, in terms of the status for remedying these devices, who is responsible for developing and testing a solution? mr. horn: the responsibility for developing and testing the engine and software's lies within the engine and drivetrain divisions in germany, for the two cylinder, four-cylinder engines. >> will this require a software patch or changes to the actual

vehicles architecture and hardware? mr. horn: yes, thank you for the question. we have to look at it differently for the three groups of cars. roughly 500,000 cars are affected, but out of those, around 430,000 are the generation one vehicles. those are the early vehicles started in 20 -- 2009. for those cards, we believe software only solution will not be possible. nk if itbe quite was possible they would have done in the first place. for those cars we are working on software and hardware solutions. ,here are different strategies a converter and a tank. this is something which, hardware engineering is complex and takes time to develop. the generation to vehicles, --

passat, 90,000he cars here in the u.s., this would probably just be a software solution. it is tested and could involve one or the other, a sensor. disclaimed -- explained to you is being discussed. for the generation three vehicles -- >> i'm sure other collies will be asking more questions. but now i need to yield five minutes. >> thank you, mr. chairman. mr. horn, your company acknowledged that it installed defeat devices on a number of models dating back to 2009, correct? mr. horn: i have a problem understanding? >> mr. chairman, can you please

have the quiet in the room so mr. horn can understand. >> if everyone will please be quiet. thank you. >> i will ask that can -- again. mr. horn, your company has acknowledged it installed on a number of models in 2009. mr. horn: yes. >> do you know how they actually work at this point? mr. horn: personally, no. i'm not an engineer. >> does someone at ew no? mr. horn:wiinhenvesgations. >> can you give us the information when you find out? mr. horn: we will. you mentioned the west virginia university study conducted in may of 2014, that found the real -- there were not admissions that were exceeding

epa standards by as much as 35 times. following publication, vw represented to the california resources board and the -- the time and i can hear >> i will ask again. after that study by west virginia university, isn't it true that vw told the epa and california board that the increased emissions were due to technical issues and unexpected in use conditions? mr. horn: yes. representations at the time were in fact, incorrect and false? mr. horn: yes. >> to your knowledge, did anybody at the volkswagen group of america know that those discrepancies were due to the

defeat devices when they made those representations to the regulators? mr. horn: to my knowledge, no. >> no one in the u.s.? mr. horn: no. >> ok. in december 2014, bw proposed a recall of 500,000 vehicles to resolve the technical issues. is that correct? mr. horn: yes. >> and a number of those vehicles were recalled. mr. horn: most of them. >> after they were recalled, convoy near regulators still said -- california regulators said the fixed did not work. mr. horn: correct. >> to your knowledge, did anyone at the volkswagen group of whenca know about these the company announced the recall in december 2014? mr. horn: to my best knowledge, no. >> when did you personally learn of the defeat device and under what circumstances? mr. horn: around the meeting on

september 3 with the epa. >> when the chairman asked you about these cars, i am concerned about what we are going to do about the 500,000 cars we have on the road in the u.s. the first thing is, as you just testified, about 430,000 of those cars cannot be fixed by a software-only solution. is that correct? mr. horn: yes. >> that's because of the way that the engine is designed in these vehicles, correct? mr. horn: i would say not the the aftertreatment systems. >> right. i have got to say, i have to acknowledge my wonderful dealer who is here today. he let me comment talk to his wonderful mechanics on monday. they gave me this chart. apart, but ite it

was too heavy and i would have to pay $2000. i decided to take the chart itself. this is a chart of the exhaust system on those cars. you can't do see, a minor fix to fix the problem. vw going to do for these 430,000 cars so that users can use them and they pass the emissions test? mr. horn: from this distance i -- ot see the chart, but >> it is the exhaust system. what can be done to fix it? mr. horn: there are two scenarios. >> these are for the cars that the software will not work. mr. horn: we are talking about the generation one car, the

430,000 cars. the picture you have shown, and the treatment, the software does not work because otherwise they would have done it. >> right, so what are you going to do? mr. horn: two scenarios. either in the rear tank to put something in there, or a catalyst. >> but those cars do not have the tank right now. mr. horn: no. >> this would be a major fix. mr. horn: yes. >> what is the timeframe for this? mr. horn: we are still working on the timeframe, and it is too early to say when the fix will take place. >> when are the dealers going to be allowed to sell the cars? -- then: the dealers issue with the dealers is that 16 certified and stopped

sales on our own. >> when will that be fixed? mr. horn: there are two scenarios. the first we are now trying to get a conditional approval with the epa until we have the final software fix at the beginning of next year. what are thentime, dealers and customers supposed to do? the ones who have these cars. mr. horn: in the meantime, no customer can buy a car because it is not available. with the dealers, we have started a program to work with them to also help them financially and communicate -- >> of the 430,000 cars that are already on the road, what are those customers supposed to do? their cars cannot pass the emissions test. andhorn: the epa has said, repeated this in the statement, these cars are legal and safe to drive. there is no indication they did not pass any admissions test. we need to recognize the

chairman of the full committee from michigan. >> thank you. i want to go back to the specifics of the defeat device. i live in michigan. where i live, we don't need to test our cars for admissions on an annual basis as many states require. this defeat device actually set up? so that it was >> when an individual goes down the road versus taking it to the service station and getting a sticker that is often required in the state. i just want to know -- if you can walk me through how to change the emission system. whatk happens? >> i'm not an engineer. let me try to explain. let me try to explain at this point of time is that the

software was designed that the vehicle in the environment or where it was in the street. one example of this as experts have explained to me the software could detect whether the steering wheel made an angle. there would be other parameters, speed and change of speed. >> maybe the driver's seat? >> i don't know. >> so wouldn't it be to develop the software that would just remove that? >> yeah, the software will be ready w -- >> the car isn't going to make the emission stuff? >> regarding model 16, we are discussing right now with the agencies t. will be switched off and taken

and those would pass the emissions test. >> so how many vehicles will not pass the emissions tests, of the ones that you've identified? >> my question -- >> you'll be able to do that with later versions, right? a device, they'll be a number of cars that, in fact, will not meet the standards? >> yes. >> how many cars on the roads? >> 400,000. 95,000 generation two vehicles and 70,000 generations. all are out of league

compliance, all are legal and safe to drive. we are not setting the cars that can owners can legally drive and safely drive the cars. >> your dealers across the country have finance plan, have quite inventory of cars that they are unable to sell and they paid fore those and they're not going to be be able to sell them fornd a number of months, perhas even a longer of six months atia -- at a minimum. what are offering knowing they paid for their cars and frankly lost a boat load, i would imagine. >> yes. >> a pretty big loss. >> one of the things thatmr troubles me very much because we

worked very card and brought period of timability -- profitability. but i tell you we had a call with the dealer and some of the folks sitting behind me. on monday we issued our first financial relief so we put all used cars, new cars on free flooring. we took all the bonus thresholds. we paid maximum bonus for each car sold and satisfaction targets objectist and we paid bonus on those cars, this is more than one thousand dollars, more than $1,500 per car. tomming towards october we provided every dealer with discretionary fund, discretionary fund which was explained through them through districtdi managers and which ws

wired to the dealers on october 1st, a significant of money, no accountability to serve the customer cases or invest or to put the money where they think it would sit. when i come out of the congressional hearing on friday, we look at the next programs and how can we help to dealers with cash flow of cars, one thing is very clear and seng -- sincere. i said this in january 1st and i this.ue to that is one part. the scenarios on the table. >> allab right. thank you. you're recognized member of full committee, five minutes.

>> thank you, mr. chairman. mr. horn, your statements don't give me much confidence that we are going to see a fix on vehicles that alere impacted. you say that it can be software-only solution, you don't have a necessary timetable as when the fix is going to begin. have you been given enough information about how to defeat device affects and how to make judgments on whether the fix will actually work. i mean, how do we know that what proposing to do is actually going to work? >> whatever i tell you today is coming from engineer, along with actions in europe we have to have actions in the u.s. >> i understand. is it fair to say that you really don't know whether you can fix these vehicles to

achieve the emissions standards? >> we know that we can fix the vehicles to achieve emissions standards. >> what happens with regard to other things like fuel economy, engine performance? people bought these vehicles thinking they were going to have emission standards, good fuel economy, good engine performance, can you guaranty it doesn't affect economy or both? at this point of time my understanding is that nitrogen oxide emission standards, that's my current understanding. this is something -- maybe on top speed. they might be one or two miles per hour. this is something that we would share with the agency.

>> the concern i have is when you buy one of these cars you're relying not only on emission standards, the fuel economy is good and the performance is good, i think you get to the issue of damages here. in other words, if i'm an owner and i don't -- the fix doesn't achieve good performance and good fuel mileage that i'm going to be compensated and that's not the case. unfair to the consumers who bought the cars and relied on them because they expected them to perform a certain way. you're telling me the fix will guaranty good performance and good fuel economy. >> to my current understanding will be achieved. there might be slight impact on the performance and that is

naturally not only the discussions with the asian -- agencies but, of course, we were look to go compensating our customers. >> let me get to another issue. what about the impact on clean air? we know that i there's all kinds of health impacts, asthma, other illnesses that can serious affect people and send them to the hospital and get sick because of these other problems. canon result in serious effects. i would assume you would agree with that? >> i read the epa statement that in general they have indicated that there might be a respiratory problems and i'm quoting which can lead to hospital visits. >> what are you going to do to rectify that?

my understanding is that the emissionst is 45% allowable lim. what's you're going to do with the excess pollution and the impact it may have had? >> firstma of all, many differet studies, i would like to go back to the epa yesterday and what they said. i think it will be part of the discussion. i would like to point out if you look at 100% of car, nitrogen -- it's not belittling this. clearly the discussion would come up and needs to be addressed. >> thank you, thank you, mr. chairman.

>> thank you, mr. chairman. mr. horn, you said profitability is your top priority when you were speaking. >> yes. >> yes, i would hope that safety quality, integrity are top priorities and profitability comes along there as part of that picture. let me ask you about this. are you going to buy back the inventory that the dealers have? >> no, our plan is not to bye back to inventory, our plan is to fix the cars. >> okay, let me move on with you. have you identified the individual or group of individuals who are responsible for the fatigue device? >> investigations are ongoing. >> spring of 2014, a year and a half? >> we know about this since september 3rd that the violation is there and since this time and since september 18th notice of violation the board has acted --

>> you've known that there was some b activity since spring of 2014? >> no, i did not know. >> you did not know it in the spring o 2013. you learned around september 3rd. >> around september 3rd events. >> let's go to yourd six-point remedy plan. you've talked some about point three, developing remedy. and i would assume if it landed on your plate september 3rd that you all have put efforts and the energy into this plan, correct? into the remedy. >> yes, correct. >> very good. all right, let's go to point number one. you state that volkswagon will adopt measures to make certain that something like this cannot happen again.

so why don't you give us a little bit of specificity on that and what steps are currently underway to handle the compliance issues, what did you start as of september 3rd, 2015 and what is your timeline, how long is it going to take you to be in compliance? >> i can only report to you on what is managed on headquarters worldwidede at this point in ti. they managed all the investigations in terms of who did what, when, how and why and what do we need to the in order to rectify for the future in process adjustment and process adjustment. >> as of n ow you don't have a plan? >> as of now we are still in investigations,>> yeah. >> when can we expect you to

have a plan to handle compliance to make the owners of your vehicles whole, if you will, to take the dealers that have trusted in you, to make them whole. also the individuals that are employed by your facilities, when are they going to have certainty as it relates to the job. you all say you're still investigating. so on your timeline when do you expect that you'll be able to say this is the way forward? >> you mentioned schism points, you started with compliance. i don't have a timeline. >> okay. >> we are working with dealers and developing plans by the week as we go, as we go. and youan can ask those folks behind me and the customer depends. we will start generation tool.

due to technical complexity it'll be a little bit later. i apologized not for having company right now. >> you are certain it's going to be a multiyear plan? >> excuse me? >> you're certain will remedy will end up being a multiyear approach? >> yes, if you look at -- if you look 430,000 cars and the repairs it might take 5-10 hours in order to fix this, technical fixes and if you look at the recall history in the market, then the actions take, you know, one to two years minimum. parts and discussing with

agencies. >> let's see, my time has expired. i do have one other point about two point. mr. chairman, i will submit that. >> thank you very much. now, five minutes. >> thank you, mr. chairman, for calling the hearing. mr. horn, 500,000 vehicles, are you confident in that number? could it be more or could it be less? >> we are very confident in this number. >> pardon me? >> we are confident in this number. >> have you calculated the loss in value to customers, car owners? >> no, not yet. investigations are ongoing and friday we will look at the first scenarios. >> youwi called your investigatn prelimmary but it came to light

-- >> no, that is not correct. as i explained the study was published and no reason to believe that there was in those -- >> you found out according to reports in 2014 that there was an issue, isn't that correct? >> an emissions issue, that's correct. >> what did you do at that point in time? >> at that point in time the plan was from the engineer and then july 2014, middle of the year presented a plan to me which was -- and this is very important also, which was agreed and discussed with the product safety committee worldwide and these are guys that made recalls and technical procurement, legal service and those things, they came back with a plan first of all, acknowledging that the results were correct and second, a clear timing of when the cars

would get a software fix. >> do you feel like you've been personally deceived asking subsequently that theha defeat devices? >> yes. >> explain that. >> i look i would recollected 25 years with this company and beyond my personal objective of dealer profitability, integrity, quality, you know, not cheating was always given for this company. when i learned this i'm as touched and moved and employees -- >> and others are feeling the affects of vw defrauding are the vw dealers and their hard working employees all across country including to customers. a lot of angry calls, emails, they feel betrayed because they bought cars that polluted less without sacrificing good gas

mileage and performance that comes with diesel engine. how many vw dealers? >> 350 audi dealers. >> front line for unhappy customers thatte feel betrayed y the volkswagon brand and a media quoted one dealer saying this is the biggest fraud i have ever seen. what do you haveth to say in response to that? >> immediately out with the dealer on a call, i made a dealer which will send out and the dealer even showed it to their children and their families and the employees because they said that'sch the right thing. >> so detail for how vw is employing dealers about defeat devices and solutions to fix cars that feature.

>> i have discussed about the timing or along side the dealers would be naturally informed. >> they're not getting any information right now? >> of course, they're getting information. secondly, you know the first thing we took the bonus out, free flooring, discretionary fund. increased incentives for vol -- volkswagon customers. >> what does that mean? >> we get them start and don't let them dry out in the field. >> is that a direct payment to customers or dealers? >> it's directly to the dealers, discretionary funds directly to the dealers and incentives are more them. this is a cash incentive that they can manage to bring loyal

customers in. >> is that the intention for the dealers then to contact customers who have purchased cars since 2009? >> yes, it's one of the possibilities, sure, yeah. >> well,on is there -- vw is not giving any direction to employees on contacting customers at this point in time? >> no, of course, wein have been -- we are set up frequently asking questions. we are guiding the dealers with real-time, same information close to all call centers as well because i visited call center, those people are also frontline. they need the same information, and as soon as we have it the other people -- >> all right, what does vw told dealers about how existing models will be affecting cars, the dealers have already sold and cars that are now sitting on the lots? >> we spoke with dealers

directly in with letters and videos. >> thankvi you. thank you for organizing this hearing. i'm not a registered professional engineer anymore, butee at one time i was. i still am an engineer of training. my daughter drives a volkswagon beatle and my daughter-in-law a jetta. i have had the highest respects for volkswagon, i must tell you sir, it is extremely disappointing to look at the -- i don't know the right word to

use -- immorality of willingly cheat on emission standards. volkswagon is one of the premier auto name brand in the world. to have a company of your stature make decision at highest levels of a company to put a software program in your that are meant intentionally to deceive or to cheat on u.s. emissions standards, to me is -- i wouldn't have believed it if it wasn't fact -- factually proven.

>> two answers teco this. first of all the investigations ongoing but this was not a corporate decision from my point of view, to my best knowledge the corporation, no board meeting has authorized this, engineers that put this in for whatever reason and i would like to find out. >> so assume that you're testifying under oath; is that correct? >> i understand it, sir. >> okay. so what you're saying the senior, the president of volkswagon international did not when itut this happened? >> what i said was to my understanding this was not a corporate decision, this was somethinrag individuals did. >> okay. now, that's