VW Scandal

[VISITOR]

what does everyone think about this? I can't imagine the money they are going to not only lose, but the money they are going to have to pay for fines and lawsuits. this is a huge deal/problem. maybe bankruptcy?

[chops1sc]

I think some company will bail/buy them out after they fix the problems. I don't think this will make them go away but it will take a long time to fix their image.

[Swift]

Sometimes I think, do companies think everything is legal as long as they don't get caught? Don't understand why they play with the rules. Study that proved VW was a culprit was made public year and half back. Guy who conducted the study, was wondering with all the fuzz now. lol

Coming to bankruptcy. I don't think there is a remotest chance of it happening. Here is why. In Financial world, companies like this are nicked name, TBTF meaning Too Big To Fail. If VW fails, there will be massive outrage all across the globe. I don't think you have any idea about VW group. VW group has 100 production facilities in 27 countries. VW group consist of passenger cars under the Audi, Bentley, Bugatti, Lamborghini, Porsche, SEAT, Škoda and Volkswagen marques; motorcycles under the Ducati brand; and commercial vehicles under the MAN, Scania, Neoplan and Volkswagen Commercial Vehicles marques. + They have 19.9% share is Japanese car maker Suzuki.

Their 2014 revenues are 202 Billion dollars. Profits for 2014 is 10.847 Billion dollars. Total equity of 90.189 Billion dollars.

As of now, their fines are estimated to be around 18 billion dollar. Their 2 year annual income is more than that.

Sure their goodwill and market value (share price dropped 20%) will take a serious hit, but they will survive.

I just hope this scandal doesn't spread to other car makers and engulf automobile industry.

Wont it be fun if VW pay the 18 billion USD fine in cash and denominations of cents only.

[mwoolfso]

I had a 2012 VW CC and a now a 2015 CC; love these vehicles. The 2015 had a few substantial improvements in suspension and general usability. However, I have always been able to find a few things in style and part makeup that clearly showed why a VW differentiates from an Audi. I see clear indications of cost cutting and mitigation that make me say these guys in Germany are very good at balancing costs vs. features.

And on that balance, they didn't sway me enough to avoid another purchase so they did OK.

To me it seems like this was a huge conspiracy in VW-land.

480K+ vehicles is some risk to take. And every month they push out more vehicles would make any bean-counter say the odds increase that someone else on the planet is going to figure this out.

All that money they saved reducing cost per vehicle is now coming back to haunt them. These fines will be significant and they do nothing to enhance shareholder value.

How naive these guys were to think otherwise. People take apart iPhones to see how they were built so that investors can invest in those who make those parts.

Lastly, cannot wait to see the documentary on this in 2-5 years. :-)

[Ricorocks]

If you haven't already read this:

Manderville "Fable of the Bees" 1714

Greed is good up to a point, upon passing that point, corruption, cheating, lawbreaking can & does occur, in the name of greed. What's needed so greed, does not pass that tipping point, is an opposing force. Ideally opposing or antagonistic force should be approximately equal in strength, so as to maintain a balance. Should either side become too strong, it's bad for citizens. Who or what keeps industry in check or honest? Unions, government regulations, legal system, word of mouth "reputation." Some would say "industry" can police itself, but this has failed, many times in the past, & necessitated, a need/calling for, checks or opposing force. Greed allowed a peanut CEO, to be sentenced to 28 yrs in prison, for knowingly selling poisoned "peanuts" 9 dead. How does this balance opposing forces shift change? Think of the balance as two fighters in the ring, both #200, suddenly one fighter (balance shifted) #200, is now opposed against a #100 fighter. What's shifted is "congress" passing laws, & weakening overseers of industry. Do (now) what you can in congress, to weaken, agencies, that are charged with protecting US.

VW will be fined & carry on as usual. They most likely will get a "deferred" conviction, nobody will go to jail, & VW will promise, to be honest for X amount of years.

[SameGuy]

A few points to ponder: the EPA has long had it in for small diesels. The "cheat" in this case is an on-the-fly EGR delete. EGR reduces NOx emissions, but at the cost of reduced engine performance and fuel efficiency, and increased engine wear. VW cheated, no question. But in a passenger vehicle marketplace dominated by Hellcats and CTS-Vs and 7500-lb SUVs, the EPA is less concerned with GHG emissions and fuel economy than they are with giving themselves a raison-d'être. The low-hanging fruit then happens to be small diesels which, while using significantly less resources than gasoline engines of equivalent output, emit quite a bit more oxides of nitrogen, one of the causes of smog and acid rain. In Europe, OTOH, the emissions tests are more concerned with total pollutants, fuel efficiency and absolute GHG emissions, with less emphasis on NOx emissions; the EU long ago mandated much stricter regulations on the quality of road diesel, something the US (and by extension, Canada) wouldn't dare enforce upon BIG OIL. The net result is that small diesels in North America pollute more and are less powerful than the same engines in Europe. But a two liter turbodiesel with a deleted EGR that gets real-world 49 mpg while delivering 235 lb-ft of torque is still FAR less dirty overall than any equivalent gasoline engine.

All that said, it's sad that GM, directly responsible for actual deaths through proven negligence over the better part of three decades, got off with a slap on the wrist ($900M fine with an extended term and external oversight? C'mon) and no public outrage, while VW is seen as The Most Evil Corporation On The Planet.

[richy]

What a joke that the CEO bailed with a HUGE compensation package! He should be in jail. They have done irreparable damage to their brand name.

[FUNX650]

RE: VW Scandal?

•In light of the recent newsflow: Notable.
-But it doesn't even come close to the scale
precipitated by the recent LIBOR scandal.
(Or has that, too, become "ancient history)



Bob

[Setec Astronomy]

480K+ vehicles is some risk to take. And every month they push out more vehicles would make any bean-counter say the odds increase that someone else on the planet is going to figure this out.

Yeah, that's the part I can't figure, how they took that liability risk...besides the fines, what if they now have to install a urea injection system on half a million cars (here), and perhaps more elsewhere. Or have to buy back the cars if that proves too expensive. What about the wait times for any mods? Like the ignition coil thing of a few years ago where people parked their cars for months waiting for parts.

A few points to ponder: the EPA has long had it in for small diesels.

I dunno, I think it's more this:

the EU long ago mandated much stricter regulations on the quality of road diesel, something the US (and by extension, Canada) wouldn't dare enforce upon BIG OIL.

The politics.

All that said, it's sad that GM, directly responsible for actual deaths through proven negligence over the better part of three decades, got off with a slap on the wrist ($900M fine with an extended term and external oversight? C'mon) and no public outrage, while VW is seen as The Most Evil Corporation On The Planet.

Perhaps I haven't been keeping up on the GM developments, but, that seems apples to oranges. GM didn't say "let's make some ignition switches that are real easy to turn, so when Becky puts 4 lbs of keys on them the car will stall when she hits a bump in traffic and Becky gets killed! yeah baby!"; they made something that turned out to not work so well and were slow to change it.

The VW thing is different due to the intent--GM didn't start out trying to kill people, but VW started out trying to bypass the emissions regs.

[Ricorocks]

VW masked the emissions, with software. EPA who's budget has stagnated, & is repeatedly, the desire of some for dissolution. EPA tries to balance the concerns of citizens to that of industry.

Currently with automakers is the "CAFE" standards, which mandate, greater fleet MPG, per mfg. Constantly opposed by industry & lobbyists, but somehow, miraculously, met by industry. We all win, better products, safer planet, & industry (at last check) is not hurting for profits.

I can tell you growing up in LA, we had smog alerts (stages 1, 2, 3), we had many stage 2 & some stage 3 alerts. At stage 2, your told to stay indoors & curtail physical exertion. It was not industry who made those alert all but go away, it was government regulations.

Working in a co-gen plant, with Allison jet engines, we had to inject Very Pure, water into the flame (combustion chamber) of the jet, so as to stay in compliance, with NOx.

At larger plants, we injected pure AMMONIA into the flame, so as to meet NOx.

EPA sets a national goal, as best they can depending on who's in power, sometimes there goals are restricted, by opposing forces, while other times there not. CAFE standards are good & industry/govt are used to them.

richy - It's not a joke, it's "S.O.P" you or I go to jail, while lawbreakers, in the boardroom serve no time, & get huge compensation, "R.H.I.P", we allow this, by being apathetic, & not knowledgeable at the polls. Business as usual, till something so egregious happens, that the masses become motivated. Prime example outraged masses, gave us FDA due in part to exposure by Upton Sinclairs book "The Jungle." Oh! Irreparable damage to the brand, I think not, citizens have short memories, plus a slew of PR guys will do damage control.