More than two years after Volkswagen AG was thrown into chaos by the diesel-emissions scandal, the German auto giant is still choking.
The latest reminder that the crisis is far from over came Friday when Volkswagen announced it will take a charge of 2.5 billion euros ($3 billion) because plans to buy back or retrofit tainted U.S. diesel cars proved more complex than expected. That brings total damages to about $30 billion and raises questions about whether Chief Executive Officer Matthias Mueller has the situation under control.
"This is yet another unexpected and unwelcome announcement from VW, not only from an earnings and cash-flow perspective but also with respect to the credibility of management," Arndt Ellinghorst, a London-based analyst with Evercore ISI, said in an email. "No surprise, investors are skeptical and cynical."
To put the latest charge into perspective, it comes a full 15 months after the company reached a settlement with U.S. authorities to buy back or fix around 500,000 tainted vehicles, including Golf, Jetta and Audi A3 models. So after more than a year of working through the issues, Volkswagen suddenly discovered that the plans were technically tougher than anticipated. The complications, which the company didn't describe in detail, amount to more than 5,000 euros per car.
(Score: 3, Insightful) by Anonymous Coward on Sunday October 01 2017, @11:02PM (2 children)
At 30 billion euros, you'd have to think it would have been cheaper just to build better cars in the first place rather than do a cheap test rigging to cheat on environmental tests. But hey, that's what you get for thinking short term profits instead of long term growth.
(Score: 4, Informative) by Spamalope on Sunday October 01 2017, @11:49PM
More like 'We'll never get caught and if we do it'll be a fine less than our profits on the deal' kind of thinking.
(Score: 0) by Anonymous Coward on Monday October 02 2017, @01:59PM
There is no fine that's too great for these monsters. PEOPLE HAVE UNDOUBTEDLY DIED from this pollution. Absolutely disgusting.