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Volkswagen's new CEO, Matthias Mueller. Mueller is said to be set to report the results of an internal investigation to VW's board. Image source: Volkswagen 

We know that Volkswagen (NASDAQOTH:VLKAY) rigged millions of diesel-powered vehicles with software that cheated on emissions tests.

But the company has yet to explain who made the decision and who knew about it.

For all intents and purposes, VW has admitted the truth of the allegations made 12 days ago by the U.S. Environmental Protection Agency (EPA). They have also admitted that the software wasn't just used on cars sold in the U.S., it was used all over the world -- in a total of 11 million vehicles.

But we still don't know the details. That may be because VW's new CEO has been busy uncovering them.

An internal investigation that could lead to a slew of firings
Bloomberg reported that new CEO Matthias Mueller was set to brief VW's leadership committee on the findings of an internal investigation into the cheating scandal. That meeting, reportedly set to take place on Wednesday evening, was to be closed to outsiders. But "people familiar with the matter" told Bloomberg that a number of VW employees are likely to lose their jobs soon.

A huge wave of firings would be no surprise -- in fact, I think more questions will be raised if VW doesn't clean house. A member of VW's Supervisory Board, Olaf Lies, told the BBC that some VW employees "acted criminally." Lies said that VW's Supervisory Board, roughly equivalent to a U.S. company's board of directors, only found out about the scandal shortly before the EPA announced the charges against the company. 

That was months after VW executives had spilled the beans to U.S. regulators.

The scandal has already cost former CEO Martin Winterkorn his job. Three of the company's top executives -- the research and development chiefs for the Audi, Volkswagen, and Porsche brands -- have been relieved of duty and put on paid leave, according to multiple reports. All are expected to resign soon.

But it may take months for all of the facts to be known. While Mueller is said to have some results from VW's internal investigation, the company has also promised a rigorous investigation by an outside source. That investigation will be headed by Jones Day, a U.S. law firm that represented BP in litigation related to the Deepwater Horizon disaster. 

Reuters reported that an official from Jones Day would attend part of tonight's Supervisory Board meeting.

Meanwhile, VW's top brass is beginning to brace for a huge financial hit to the business.

VW is already moving to cut costs as it prepares for the consequences
Some of the company's belt-tightening moves are already becoming visible. Volkswagen's financial-services unit has imposed a hiring freeze that is expected to last for the rest of the year. A spokesman characterized it as "a precautionary measure," according to a Reuters report.

Images

Image source: Volkswagen

VW has also cut one shift at its enormous Salzgitter engine plant, which makes a mix of gasoline and diesel engines. Several reports have suggested that the company is considering cuts to its sports and racing sponsorships, and it's likely that other moves to reduce costs are under way or under consideration.

It's clear why the company is suddenly reining in its spending. While it's possible that VW will suffer through a protracted sales slump as the scandal plays out, it's nearly certain to be on the hook for billions of dollars in fines -- and it's definitely on the hook for whatever it will cost to recall the 11 million affected vehicles and bring them into compliance with emissions laws.

When will we know more? Maybe soon, maybe not
To answer the question in the headline, the company's leaders may not yet know how this happened. It's possible that we'll know more on Thursday, if the Supervisory Board decides to release a statement after its meeting. There are many unanswered questions, including an urgent one for VW investors and owners of the affected cars: How does the company plan to fix them?

We should know the answer to that soon. Once we do, we'll have a somewhat better idea of what this mess is going to cost Volkswagen, at least in the near term. But what's clear is that there's still an awful lot we don't know about how all of this happened.

John Rosevear has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.