Volkswagen sets aside $7.3 billion over emissions scandal

[Omaha Steve]

Source: AP

By GEIR MOULSON and PAN PYLAS

BERLIN (AP) — The crisis enveloping Volkswagen AG, the world's top-selling carmaker, escalated Tuesday as the company issued a profit warning following a stunning admission that some 11 million of its diesel vehicles worldwide were fitted with software at the center of a U.S. emissions scandal.

The German company said it was setting aside around 6.5 billion euros ($7.3 billion) to cover the fallout from the scandal that has tarnished VW's reputation, raised questions over the future of CEO Martin Winterkorn and battered its share price.

The reputational damage to Volkswagen is implicit in the market's response. Volkswagen's share price slid a further 16.2 percent Tuesday to a near four-year low of 112 euros. The fall comes on top of Monday's 17 percent decline.

The shockwaves from the scandal enveloping Volkswagen were being felt far and wide across the sector as traders wondered who else may get embroiled. Germany's Daimler AG, the maker of Mercedes-Benz cars, was down 6.5 percent, while BMW AG fell 5.4 percent. France's Renault SA was 7 percent lower.

FULL story at link.



FILE - In this May 23, 2011 file photo Martin Winterkorn, CEO of Volkswagen, participates in a news conference at New York's Museum of Modern Art. Winterkorn promised full cooperation with the government following the company's admission it rigged nearly a half million cars to defeat U.S. smog tests. (AP Photo/Richard Drew)

Read more: http://bigstory.ap.org/article/0f8537fe91f7417ca2ca81b3f0c5e775/vw-cooperating-german-investigation-vehicles

[randys1]

1. Why is MB even mentioned if they are not owned by VW?

What does VW have to do with the other manufacturers?

It would make sense if MB used VW engines, I suppose.

[eggplant]

2. Skittish investors are skittish.

Before the VW announcement, nobody was skittish about VW. And clearly, since all car manufacturers are secretly run by the same Illuminati cabal, everyone is now suspect.

[Lucky Luciano]

5. If MB is down 7% while VW is down 35% in two days,

...then I guess the market is roughly implying a 20% chance that MB is guilty of something similar or will have to undergo a lot of scrutiny to see if they are also dirty in perhaps other ways.

[NCjack]

8. MB supplies VW with diesel engine technology.

[randys1]

10. Makes sense, that Blue Tec is something alright...

[BlueJazz]

3. They might want to triple that figure. (from what I've read)

[One_Life_To_Give]

4. Such willfull fraud against governments and their citizens demands extreme punitive action

The employees involved in this should go to be in a cold sweat, fearing a set of shiny bracelets with their name on them. Their investors should also lay down in a pool of sweat worrying their entire investment may be confiscated or liquidated by the people that were defrauded.

Failure to take strong action against all of the perpetrators will only cause them and others to duplicate this same route to short term success at countless other firms. People must be shown there will be consequences for willful misconduct against the laws of the nations in which they do business.

[PSPS]

6. In China, such criminality is resolved with a bullet in the head.

I sometimes think that is the best way to put an end to this constant stream of corporate criminality.

[Dont call me Shirley]

7. Is 7.3 billion going to cover all the damage to the earth and climate too?

[Statistical]

9. Not even close. VW is just being optimisitic.

I doubt $7.3B will cover the cost of the recall (assuming it can be fixed) and the fines. The EPA can (probably won't but can) fine VA up to $18B and that is just for 500K vehicles. VW has 20x as many vehicles outside the US. Throw in the inevitable class action lawsuits, brand damage, halted sales (currently EPA is holding certificate of compliance for all 2016 vehicles so they are stacking up in US ports), and dealer backlash one would have to be high on NOx fumes to think $7.3B will cover it.

Not to mention VW says they want to undo the damage. Ok figure out how to suck a couple hundred metric tons of NOx out of the atmosphere and add that to the bill. Oh wait they didn't mean damage to the earth, the CEO just means he is sorry about the damage to his personal stock options.