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  • VW's stock takes $16.9 billion hit - Volkswagen's CEO issues statement on software manipulation of diesels which violates EPA and CARB standards

    The EPA and CARB (Environmental Protection Agency and California Air Resource Board respectively) released findings showing that Volkswagen used software to get around emissions standards. Volkswagen is not trying to deny anything and basically admits they got caught.


    Volkswagen CEO Martin Winterkorn released the following statement:

    Quote Originally Posted by Martin Winterkorn
    The U.S. Environmental Protection Agency and the California Air Resources Board (EPA and CARB) revealed their findings that while testing diesel cars of the Volkswagen Group they have detected manipulations that violate American environmental standards.

    The Board of Management at Volkswagen AG takes these findings very seriously. I personally am deeply sorry that we have broken the trust of our customers and the public. We will cooperate fully with the responsible agencies, with transparency and urgency, to clearly, openly, and completely establish all of the facts of this case. Volkswagen has ordered an external investigation of this matter.

    We do not and will not tolerate violations of any kind of our internal rules or of the law.

    The trust of our customers and the public is and continues to be our most important asset. We at Volkswagen will do everything that must be done in order to re-establish the trust that so many people have placed in us, and we will do everything necessary in order to reverse the damage this has caused. This matter has first priority for me, personally, and for our entire Board of Management.
    It is typical executive speak where he apologizes for breaking the trust of the consumer and that resolving this issue is a priority. What he really means is he is sorry they got caught and knows a fine is coming.

    If this was a priority for Volkswagen it would have never happened in the first place. They would have addressed the emissions issues and made the cars compliant instead of trying to find a software loophole.

    We are guessing that it was simply a business decision in the sense of using software to manipulate things being a cheaper solution to meet the emissions standards than any actual hardware changes. This decision will end up costing them much more in the long run.

    This issue will cost Volkwagen a bit of money and impact their American diesel business. Their stock price has already tumbled to the tune of losing $16.9 billion in value or 18.1% when the news broke. Ouch.


    Source

    This article was originally published in forum thread: VW's stock takes $16.9 billion hit - Volkswagen's CEO issues statement on software manipulation of diesels which violates EPA and CARB standards started by Sticky View original post
    Comments 47 Comments
    1. subaru335i's Avatar
      subaru335i -
      This kind of $#@! happens all the time in big corporations but I hope they get fined big time for this. I personally think our emissions laws are $#@!ed up in the US and especially in California but if you want to sell cars in the US those are the rules and if everyone else has to play by them then so does VW!
      I don't really care how much NOx these hundreds of thousands of cars have been putting out over the years, I just really don't like the unfair advantage VW diesels have had over their competition. Every other car manufacturer has had to fit a big heavy and expensive urea injection system in their diesels to meet NOx levels and VW being able to omit them was a huge selling point for them (cost savings and convenience for the consumer not having to fill up their urea tank).
      I really want to see how VW plans to fix this and how much they will negotiate their fine down from 18 billion. I bet they pay something like 1 billion usd and issue a software patch that kills performance, driveability, and fuel economy of their TDI's. Just piss poor all around and they clearly designed the cars like this from the start to willfully cheat the system. It wasn't a mistake that was covered up. Cheating plain and simple.
    1. Sticky's Avatar
      Sticky -
      Click here to enlarge Originally Posted by subaru335i Click here to enlarge
      I really want to see how VW plans to fix this and how much they will negotiate their fine down from 18 billion.
      It's not a fine. That's just money wiped out by the stock dropping.

      The fine won't be 18 billion that's for sure.

      I doubt VW was the only one cheating. This type of thing is what scares manufacturers off from selling diesels in the US though.
    1. subaru335i's Avatar
      subaru335i -
      Click here to enlarge Originally Posted by Sticky Click here to enlarge
      It's not a fine. That's just money wiped out by the stock dropping.

      The fine won't be 18 billion that's for sure.

      I doubt VW was the only one cheating. This type of thing is what scares manufacturers off from selling diesels in the US though.
      I wasn't talking about the drop in stock price, they are also facing $18 billion in fines for this situation.

      http://www.reuters.com/article/2015/...0RI1VK20150918
    1. subaru335i's Avatar
      subaru335i -
      The EPA wants $37,500 in fines per vehicle that is in violation (about 480,000 cars).
    1. Fr3nch's Avatar
      Fr3nch -
      That's insane. I just saw this the other day. How exactly does one recover from something like this?
    1. Sticky's Avatar
      Sticky -
      Click here to enlarge Originally Posted by subaru335i Click here to enlarge
      I wasn't talking about the drop in stock price, they are also facing $18 billion in fines for this situation.

      http://www.reuters.com/article/2015/...0RI1VK20150918
      So the total for this would be $36 billion until the stock recovers? That type of fine will drop the price more.

      Damn, all due to some software trickery?

      It looks like they want to charge per car. That's an insane penalty though. I would think VW will negotiate this thing down quite a bit.

      If it was any other country VW would probably scoff at the idea of paying. They seem to be afraid of the US government.
    1. Sticky's Avatar
      Sticky -
      Click here to enlarge Originally Posted by Fr3nch Click here to enlarge
      That's insane. I just saw this the other day. How exactly does one recover from something like this?
      Negotiate it down as low as possible, make some concessions, somebody resigns, stock price slowly recovers, and business as usual.
    1. Fr3nch's Avatar
      Fr3nch -
      They're stock just took a huge hit though. How do you convince people you can turn it back around, and they should buy your stock? This isn't quite like BP's oil spill, that was an "accident." This is blatant disregard and cheating the system.
    1. subaru335i's Avatar
      subaru335i -
      Click here to enlarge Originally Posted by Sticky Click here to enlarge
      Negotiate it down as low as possible, make some concessions, somebody resigns, stock price slowly recovers, and business as usual.
      This is exactly what will happen. With the addition of first ruining the performance and mileage of all the TDI cars out there now by forcing a "software update" which really sucks for current owners.
      There is also talk of the FCC getting involved with "false advertisement" fines because of all VW's aggressive marketing saying how "clean" their diesel cars are. They have since removed all diesel marketing on their social media accounts to try and avoid this lol.
      If I was an owner of a TDI and they force a software update to handicap my car to meet the NOx levels I would be $#@!ing pissed.
    1. DavidV's Avatar
      DavidV -
      VW lost 11B yesterday and 16B today in market value alone.
      And the there is reputation damage.
      There is even talk this will be such a big hit VW will not recover from this.
      Even Daimler and BMW lost 10B each today on the stock market due to this.
    1. Fr3nch's Avatar
      Fr3nch -
      Click here to enlarge Originally Posted by DavidV Click here to enlarge
      VW lost €11B yesterday and €16B today in market value alone.
      And the there is reputation damage.
      There is even talk this will be such a big hit VW will not recover from this.
      Even Daimler and BMW lost €10B each today on the stock market due to this.
      Where are you seeing BMW and Daimler losing money in stock? I can't find anything saying that
    1. Fr3nch's Avatar
      Fr3nch -
      Click here to enlarge Originally Posted by subaru335i Click here to enlarge
      This is exactly what will happen. With the addition of first ruining the performance and mileage of all the TDI cars out there now by forcing a "software update" which really sucks for current owners.
      There is also talk of the FCC getting involved with "false advertisement" fines because of all VW's aggressive marketing saying how "clean" their diesel cars are. They have since removed all diesel marketing on their social media accounts to try and avoid this lol.
      If I was an owner of a TDI and they force a software update to handicap my car to meet the NOx levels I would be $#@!ing pissed.

      I'd be pissed too, especially when in all likelyhood it's going to kill your MPG and power. That being said, I'd imagine VW is going to have to find some way to make it up to these customers. At least, I would hope so, proper customer service/business ethics says they should.
    1. Sticky's Avatar
      Sticky -
      Click here to enlarge Originally Posted by Fr3nch Click here to enlarge
      They're stock just took a huge hit though. How do you convince people you can turn it back around, and they should buy your stock? This isn't quite like BP's oil spill, that was an "accident." This is blatant disregard and cheating the system.
      If the company is profitable, which it is, people will buy it. The stock drop is a sharp overreaction. There's money to be made by buying it low. It just depends how much lower it will go once the fines hit.
    1. Sticky's Avatar
      Sticky -
      Click here to enlarge Originally Posted by DavidV Click here to enlarge
      VW lost €11B yesterday and €16B today in market value alone.
      And the there is reputation damage.
      There is even talk this will be such a big hit VW will not recover from this.
      Even Daimler and BMW lost €10B each today on the stock market due to this.
      Seriously? People think VW can't recover from software manipulation to skirt US diesel emissions? I think the whole thing is being blown out of proportion.

      It's not like anyone died. GM's ignition switch thing killed a lot of people and they are more profitable than ever.
    1. Torgus's Avatar
      Torgus -
      BMW said they weren't concerned and they were not cheating. I don't understand why they would take a hit.

      The real question is when do you buy VW stock? Now or wait for it to drop more like when the fine is actually levied.
    1. Sticky's Avatar
      Sticky -
      Click here to enlarge Originally Posted by Torgus Click here to enlarge
      The real question is when do you buy VW stock?
      When it hits its lowest point. I'll leave it up to the stock brokers to figure that out.
    1. subaru335i's Avatar
      subaru335i -
      Click here to enlarge Originally Posted by Sticky Click here to enlarge
      Seriously? People think VW can't recover from software manipulation to skirt US diesel emissions? I think the whole thing is being blown out of proportion.

      It's not like anyone died. GM's ignition switch thing killed a lot of people and they are more profitable than ever.
      My main problem with that argument is GM's ignition switch failure is not really 100% their fault and no one is saying it was intentionally engineered that way. People put heavy key chains on there which made them wear out and GM employees covered it up. Reminds me of the "unintended acceleration" fiasco a while ago. It was just the floor mats and people are stupid.
      I don't think GM executives got punished enough at all and I think VW deserves a kick in the nuts.
      While this hasn't killed anyone it was completely intentional from the start. The rules don't apply to them because they want to be the worlds largest auto maker. It is fair to fine them for $#@!ing with emissions related stuff. If I get caught messing with emissions on one of my cars I would get a pretty stiff fine I am sure.
      Too big to fail is $#@! and white collar criminals should start to be held accountable.
    1. subaru335i's Avatar
      subaru335i -
      Click here to enlarge Originally Posted by Sticky Click here to enlarge
      If the company is profitable, which it is, people will buy it. The stock drop is a sharp overreaction. There's money to be made by buying it low. It just depends how much lower it will go once the fines hit.
      There is a lot of money to be made. There is no way VW is going away. People will forget about this quickly and they will be back. Americans don't care about diesel anyway.
    1. Sticky's Avatar
      Sticky -
      Click here to enlarge Originally Posted by subaru335i Click here to enlarge
      My main problem with that argument is GM's ignition switch failure is not really 100% their fault and no one is saying it was intentionally engineered that way. People put heavy key chains on there which made them wear out and GM employees covered it up. Reminds me of the "unintended acceleration" fiasco a while ago. It was just the floor mats and people are stupid.
      I don't think GM executives got punished enough at all and I think VW deserves a kick in the nuts.
      While this hasn't killed anyone it was completely intentional from the start. The rules don't apply to them because they want to be the worlds largest auto maker. It is fair to fine them for $#@!ing with emissions related stuff. If I get caught messing with emissions on one of my cars I would get a pretty stiff fine I am sure.
      Too big to fail is $#@! and white collar criminals should start to be held accountable.
      Shouldn't some blame be placed on the testing procedures for not catching this? We don't have all the details but I wonder what exactly was done to the software and what it resulted in.

      I think people dying is far worse than VW's software engineers beating the system. Plus VW still offers an awesome array of clean diesels and I guarantee the emissions impact is nothing compared to the dirty air that comes over from Mexico and China.
    1. subaru335i's Avatar
      subaru335i -
      Click here to enlarge Originally Posted by Sticky Click here to enlarge
      Shouldn't some blame be placed on the testing procedures for not catching this? We don't have all the details but I wonder what exactly was done to the software and what it resulted in.

      I think people dying is far worse than VW's software engineers beating the system. Plus VW still offers an awesome array of clean diesels and I guarantee the emissions impact is nothing compared to the dirty air that comes over from Mexico and China.
      Definitely. It's sad that they didn't catch it until some people in West Virginia decided to measure the actual real world emissions.
      That doesn't make what they did alright. VW people shouldn't go to jail (I think some of the GM people involved in the scandal probably should) but I'm fine with fining the $#@! out of them. They got caught. I speed on the street and I get caught then I have to pay. If I live in CA and cheat on smog test and get caught I will have to pay.
      Why are corporations exempt from morality? If they were then we would live in China and our air would be $#@!ing $#@! too!!!