Re: VW emissions scandal

Check out the attached link to The Guardian. I think we are OK, but if I owned one of the recalled cars and had to bring it in to have it "fixed" which would no doubt reduce performance, I would be very angry.

[www.theguardian.com]

With an $18B, B like in "Biilion" fine, I'm pretty sure the VW stock would also take a hit on performance

VW/Audi has admitted to using software which detects when emissions testing is occurring and thus turning on all the emissions controls. In normal mode, all that stuff is off for 4-cyl diesels from 2009-date. The result is up to 40 times the amount of emissions they claimed. They may be liable for penalties of up to $37k per vehicle ($18 and there may be criminal prosecutions.

Apparently, the EPA is now testing the manufacturer submitted figures and Hyundai and Kia have already been caught with inflated MPG figures and paid penalties.

Big impact on reputation and potentially on the bottom line.

Their net income is around $12 billion/year, so they would survive, but this would be one heck of a blow to shareholders and would put them in the bulls-eye going forward with the feds.
I wonder what other diesel engines made by VW may get another look by the feds?

BERLIN (AP) — Around 15 billion euros ($16.9 billion) was wiped off the market value of Volkswagen AG on Monday following revelations that the German carmaker rigged U.S. emissions tests for about 500,000 diesel cars.

By early afternoon trading in Frankfurt, Volkswagen's share price was down a stunning 19.4 percent at near three-year low of 130.20 euros. Its dramatic fall weighed heavily on Germany's main stock index, the DAX, which underperformed its peers in Europe with a 0.6 percent decline.

The EPA said VW used a device programmed to detect when the cars are undergoing official emissions testing. The software device then turns off the emissions controls during normal driving situations, allowing the cars to emit more than the legal limit of pollutants.

Volkswagen marketed the diesel-powered cars, which account for about 25 percent of sales, as being better for the environment. The cars, built in the last seven years, include the Audi A3, VW Jetta, Beetle, Golf and Passat models.

"The company will have to recall nearly 500,000 affected cars, which will cost it millions of dollars, and that's even before the damage to its brand and potential fines," said Michael Hewson, chief market analyst at CMC Markets.

The agency has ordered VW to fix the cars at its own expense but said car owners do not need to take any immediate action. The EPA insisted that the violations do not pose any safety hazard and said the cars remain legal to drive and sell while Volkswagen comes up with a plan to recall and repair them. However, it said the cars posed a threat to public health.

The EPA also indicated the scale of the fines that could be imposed on VW. It said the carmaker could be hit up to $37,500 per vehicle for the violations — a total of more than $18 billion. The California Air Resources Board is also investigating.

Volkswagen has had a difficult year, its share price having fallen from over 250 euros amid signs of faltering sales in the U.S. and China.

VW edged out Toyota to become the world's top-selling automaker the first half of 2015. But a hit to its reputation from the emissions revelations could hamper its efforts at a sales rebound in the U.S.

If other regulatory authorities decide VW has a case to answer, then the carmaker faces the potential for even bigger fines.

"The news so far revolves around the U.S. impact, but if European investigators become interested the potential penalties could multiply very quickly," said Chris Beauchamp, senior market analyst at IG.

A spokesman for Germany's environment ministry said that, for now, authorities there were waiting to see how the U.S. investigation develops.

"The auto manufacturers have to work closely with U.S. authorities to comprehensively clarify the matter," Michael Schroeren told reporters in Berlin. "We expect reliable information from the car manufacturers so that (German authorities) can check whether comparable manipulation has happened in Germany or Europe."

Government spokesman Steffen Seibert declined to comment directly on the case, but said Germany's standing as a leader in environmental protection hadn't been harmed.

"Our climate policy stands for itself and I think it's internationally recognized that Germany is one of the drivers on the way to (the international climate summit in) Paris," he said.

"A mile of highway will take you one mile. A mile of runway will take you anywhere."

What will be the acceleration and the MPGs? I think they will be unfavorably different than was advertised (why else would they have turned off the pollution controls) when originally sold and then private lawsuits and class actions will cause mounting civil settlement costs and legal expenses.

Has there been any state level announcements if it is legal to continue to drive a car that so grossly (~10-40 times) exceeds legal pollution levels? Will they all start flunking pollution checks? Has CA started their actions?

And how does that affect Porsche's development budget?

Quote
mikefocke, '01S Sanford, NC
What will be the acceleration and the MPGs? I think they will be unfavorably different than was advertised (why else would they have turned off the pollution controls) when originally sold and then private lawsuits and class actions will cause mounting civil settlement costs and legal expenses.

Has there been any state level announcements if it is legal to continue to drive a car that so grossly (~10-40 times) exceeds legal pollution levels? Will they all start flunking pollution checks? Has CA started their actions?

And how does that affect Porsche's development budget?

Good questions.
This is going to be a very complicated and costly issue for VW to fix. The shareholders are bearing the bulk of the damage right now, but the customers could end up with a "damaged" product after the emission systems are fixed, if the mileage numbers so south.
The JD is opening a criminal investigation of this fiasco. In the meantime, VW still has to make and sell cars; this kind of bad press will likely affect their sales until the extent of the problem, process to fix it and fate of the customers that own the affected cars becomes clearer.

Say Porsche chief to head VW, massive EU investigation, multiple other countries investigating, 11M cars affected by admission of VW spokesperson, labor leaders p..sed as it will cost jobs as brand reputation takes big hit, $6.7 billion set aside (which is IMHO no where near what will be needed to cover the losses over the next 10 years).

German car makers stocks fall amid fears of brand contagion as reputation of German engineering superiority damaged severely.

Second item:
[www.itv.com]

Winterkorn's gone now:
[money.cnn.com]

Here's a link to a BBC article with the second video being the announcement to the press. Wolfgang Porsche is at left, a good sign, possibly. CNBC has speculated Matthias Müller as a possible Winterkorn replacement. Makes some sense in that Porsche has been doing well. Possibly good for us Porschephiles in that Müller could favor keeping r&d and production funds flowing to our Marke of choice.
[www.bbc.com]



Edited 2 time(s). Last edit at 09/23/2015 12:20PM by Laz. (view changes)

[www3.epa.gov]

Food for thought: Are VW software engineers the only ones clever enough to design their software to fool the emissions testing?

It would be interesting to see what manufacturers will be busy with "software updates" in the near future.

Ah yes. The labyrinth of all things electronically controlled by software.

Right now the problem seems to be confined to diesel. It may go beyond that in the future. In particular I remember reading somewhere that turbos don't really get better gas mileage but it just appears that way according to the testing standards which are done with low throttle.

Takata airbags, GM ignition switches. I know they weren't "planned", but when the companies became aware, how much sweeping under the carpet and looking the other way happened before something was done?

It's all about the bottom line.

I just wouldn't be surprised if other rigged software was found and it was just VW's that was found first.

And that particular model is one Porsche's biggest sellers.

If I recall correctly, Ford did the math and decided the cost of the fix would exceed the amount of personal injury awards, so they decided not to fix it.

Can't help but wonder if VW did a similar analysis - sales targets vs $ exposure if they got found out...

They got found out, and it's going to be pricey.

as they do offer a 6-cylinder diesel in the SUV and who knows what software is controlling it.

....a Jetta Sportwagon with the Turbo diesel and PDK. Great car looks like I'm due fro possible reduced mileage.

and he loves it. Says on the highway it gets better MPG than my Prius v (mine 41.9 average over 25k miles, mine probably 45 at around 65MPH) but with lots pricier fuel than my current $1.999 stuff.

The concerns I read about are potential impact of the fix on resale value, MPG, torque and longevity. All really unknowns. I'll confess to having read the complaint, engineering studies, etc and am fascinated. The pollution controls for the 4-cyl TDI have evolved over three generations since 2008 and involve a heck of a lot of hardware and software. Lots of $, weight and complexity.

The good news is you ought to get an extended warranty deal out of this.

Prepare to be contacted by one of the already 35 lawyers trying to be the class action leader on this.

Congrats on the new Porsche. And good luck.

ours is a '12 and we love it. Extended warranty would be nice. We only have 20K miles on it so trade in will be a while. Oh yeah I just traded my '08 Bullitt that has one of those projectile airbags. Ford has no idea when they will get replacements.

IMHO are it brings a new Porsche leader not yet named and the impact on the heads of VW and Audi and Porsche engineering

There has been an intensive internal investigation, and Porsche must not be involved in the deception. I have driven a Porsche diesel. I was given a Cayenne loaner the last time I took my Boxster in. Very nice SUV, but I do not want to be driving a SUV that I care much about through a Minneapolis winter. This whole thing could get very nasty in the future. There is talk of investor suits and SEC prosecution.



Edited 1 time(s). Last edit at 09/25/2015 01:51PM by SteveJ (2010 987 base, manual trans). (view changes)

[www.bloomberg.com]

I just purchased a nice sized block.. The company's sales have not shrunk by 1/3.. yes a risk, but I think this is a good buy.

The emissions system isn't crushing or burning people.

Peace
Bruce in Philly

Yes...Buy Low Sell High...but is it really low Lots more news to come..Stocks are bought and sold on emotions.


Econo Mike

MIKELLIG

The class action law offices, the federal and state AG's are sharpening their pitchforks and axes, in preparation to going after VW. If banks can be fined millions of dollars for imagined "red-lining", what can a company the size of VW expect when it has admitted wrong doing and of this magnitude?

And VW has 40k of those cars sitting on lots there that can't move until when?

Also UK rumors that BMW has a 3 series involved, and stories of 4 years ago VW management being informed.

Now a ban in Italy.

And Germany has told VW they have until Oct 7th to prove compliance or type approval will be withdrawn.

Bosch now said to have given the get-around software to VW with specific warning to use only in internal tests and not on any shipping vehicle.

VW management was warned in 2011 about the use of the flawed software. Even a copy is circulating.

UK sources are quoting German papers on this stuff.

What a mess. I'm a lucky owner. Besides, my wife wanted a Subaru but I convinced her we should get a Jetta Sportwagon TDI. I'm beginning to get "that look".

VW has really blown up their reputation and it will take a long time and $ to get back to where they were before the stuff hit the fan on this issue.

I'd like to know who made the ultimate decision to proceed with this fraud and how many senior corporate officers signed off on it.

… VW was acting on their behalf, offering more power and performance.
The defraud was against the regulatory agencies, so I don't think that it's going to hurt their sales too much.
The sanctions on the other hand, will be hefty.
Audi also announced yesterday that 1.2MM of their vehicles fall into the same situation
Happy Porscheing,
Pedro

Pedro Bonilla
1998 Boxster 986 - 311,000+ miles: [www.PedrosGarage.com]
PCA National Club Racing Scrutineer - PCA National HPDE Instructor - PCA Technical Committee (Boxster/Cayman)

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Racecar spelled backwards is Racecar

"Racing is life. Anything before or after is just waiting" ... Steve McQueen as Michael Delaney in "LeMans"

"If you wait, all that happens is that you get older"... Mario Andretti

"Being second is to be the first of the ones who lose" ... Ayrton Senna

If the owners are not inconvenient by the repairs, are not out of pocket a lot of $, performance and drivabilty is unaffected--along with resale value--then their customers may stay loyal.
But..those are a lot of things to get squared away in a finite amount of time, epecially with an EPA that probably has a real axe to grind now.

time to take advantage and cash in on the VW diesel scandal and buy a diesel vehicle.

[www.forbes.com]

fear-instilling guy. He could've created a climate of "results über alles."

......getting the performance by spewing crap in the air. They presented the car as a clean, alternative fuel, and good performing car. When/if they adjust the CPU to clean it up, I'm sure it won't be as quick or efficient. SO THEY WERE NOT LOOKING OUT ON MY BEHALF by cheating on certification.

I like my Sport Wagon. It was misrepresented.

... you're in your right if you feel wronged.
Happy Sue'ing
Pedro

Pedro Bonilla
1998 Boxster 986 - 311,000+ miles: [www.PedrosGarage.com]
PCA National Club Racing Scrutineer - PCA National HPDE Instructor - PCA Technical Committee (Boxster/Cayman)

---

Racecar spelled backwards is Racecar

"Racing is life. Anything before or after is just waiting" ... Steve McQueen as Michael Delaney in "LeMans"

"If you wait, all that happens is that you get older"... Mario Andretti

"Being second is to be the first of the ones who lose" ... Ayrton Senna

Well I'm not a big litigation kind of guy especially class action types. Just hoping VW steps up and does the right thing. Right now I'm not even sure what that is. Just don't tell me that VW was acting on my behalf.