Quotes: MENA   Enter Symbol: NewsLetter: Search: advanced

US deal won't end 'dieselgate' pain for Volkswagen  Join our daily free Newsletter

MENAFN - AFP - 11/01/2017
No. of Ratings : 0
Add to Mixx!


(MENAFN - AFP) Woes related to the 'dieselgate' scandal will dog German car giant Volkswagen even after a deal with US authorities to close criminal and civil cases against it, industry experts said Wednesday.

The auto manufacturer said on Tuesday it had a "concrete draft" agreement with US authorities to pay 4.3 billion to settle a criminal investigation and pay civil and criminal penalties over its 'dieselgate' scandal.

The deal -- still subject to approval by VW's supervisory board -- would resolve the final major legal hurdle facing the group in the United States since it admitted in 2015 to outfitting 11 million diesel cars worldwide with software designed to cheat emissions testing.

A 4.3 billion (4.1 billion euro) payment on top of some 17.5 billion in fines and compensation already agreed with authorities, dealers, and consumers in the US would comfortably exceed the 18.2 billion euros VW has so far set aside to cover the costs of the emissions cheating.

"It's a significant financial impact, but this is a good solution," Ferdinand Dudenhoeffer of Germany's CAR automobile research institute told AFP.

The deal is an "important step," agreed Michael Punzet of DZ Bank, but "the financial impact seems higher than so far expected."

Unexpected costs will bite "at a time where the company needs to spend a lot of money into its Strategy 2025," a plan VW announced in late November to focus on electric cars and shed some 30,000 jobs, Punzet noted.

He expects VW to make further provisions of 500 million euros in the fourth quarter of 2016 and 10.5 billion over the whole of 2017.

That would place the total bill for Volkswagen from the scandal around 30 billion euros, while Nord/LB bank analyst Frank Schwope expects the final amount to lie etween 25 and 35 billion.

While Volkswagen can afford such large sums, every euro spent on cleaning up the diesel mess is one less for investment in future technologies like electric and self-driving vehicles.

- Uncertain road ahead -

"This isn't the end. Other costs should still turn up, in Europe but also in the US where complaints are waiting in the wings," Nord/LB's Schwope told AFP.

"Complaints from investors are the biggest problem for Volkswagen in the future," said CAR's Dudenhoeffer.

In Germany alone, shareholders have filed claims seeking damages from VW totalling some 8.2 billion euros.

They say the carmaker failed to inform them about the diesel cheating quickly enough, costing them as the shares plunged in September 2015.

Charges filed in the US on Monday against Oliver Schmidt, a VW executive formerly responsible for US compliance issues, will lend ammunition to the plaintiffs.

US investigators believe VW executives, including the German board around former chief executive Martin Winterkorn, knew of the cheating in July 2015 -- two months before finally admitting to it publicly -- but chose to say nothing.

German investigators are probing Winterkorn, former finance director Hans Dieter Poetsch -- now supervisory board chairman -- and VW brand chief Herbert Diess on suspicion of holding back information from investors.

One group unlikely to see any benefit from VW's admission of guilt in the US is consumers in Europe, where authorities have less power to compel the firm to offer buybacks or compensation.

Volkswagen is refitting affected engines to bring them in line with EU emissions standards, but has rejected calls to offer European customers the same payouts their US counterparts enjoyed.


 


AFP




  MENA News Headlines
 Mar 23 2017 - Jordan- King, Moroccan Monarch open African Art Exhibition in RabatJordan News Agency
(MENAFN - Jordan News Agency) Rabat, March 23 (Petra) -- Their Majesties King Abdullah II and King Mohammed VI on Thursday opened an African Art Exhibition in Rabat. The two monarchs toured the ...

 Mar 23 2017 - Jordan- King, Moroccan Monarch hold talksJordan News Agency
(MENAFN - Jordan News Agency) Rabat, March 23 (Petra) -- His Majesty King Abdullah II held talks here on Thursday with Moroccan Monarch Mohammed VI on bilateral ties and latest developments in the ...

 Mar 23 2017 - Jordan- King meets Moroccan PM, parliament speaker, President of House of CouncillorsJordan News Agency
(MENAFN - Jordan News Agency) Raba, March 23 (Petra) -- His Majesty King Abdullah II on Thursday received at his residence here Moroccan Prime Minister Abdelilah Benkirane, President of the Moroccan ...

 Mar 23 2017 - Jordan- King calls British PM, condemns terrorist attackJordan News Agency
(MENAFN - Jordan News Agency) Rabat, March 23 (Petra) -- His Majesty King Abdullah II on Thursday made a telephone call with British Prime Minister Theresa May, in which he condemned the heinous ...

 Mar 23 2017 - Jordan- Daily News BulletinJordan News Agency
(MENAFN - Jordan News Agency) Jordan News Agency (Petra) starts its daily news bulletin from Amman for Wednesday, March 22, 2017, corresponding to Jumada al-Akhirah 23, 1438 Hijri. 22/3/2017 - ...

 Mar 23 2017 - Jordan- Arab summit enjoys political and economic importance, says ministerJordan News Agency
(MENAFN - Jordan News Agency) The Dead Sea, March 23 (Petra) -- The upcoming Arab Summit has its political importance as well as its economic, social and developmental impact, which will reflect ...

 Mar 23 2017 - Jordan- Arab Economic and Social Council discusses economic filesJordan News Agency
(MENAFN - Jordan News Agency) Dead Sea, March 23 (Petra)--Assistant Arab League Secretary General for Social Affairs Badr El Din Alali said that meeting of the senior officials of the Economic and ...

 Mar 23 2017 - Foreign Ministry contacts UAE authorities on killing of Jordanian womanJordan News Agency
(MENAFN - Jordan News Agency) Amman, March 23 (Petra)--Official Spokesperson of the Ministry of Foreign and Expatriate Affairs Sabah Rafei said that the Jordanian Embassy in Abu Dhabi and the ...

 Mar 23 2017 - Saudi executes two drug dealersThe Peninsula
(MENAFN - The Peninsula) Riyadh: Saudi Arabia executed two convicted drug traffickers on Thursday, bringing the number of prisoners killed in the kingdom to 20 so far this year. The state-run ...

 Mar 23 2017 - Qatar's Al Behaih wins gold at Special Olympics Winter GamesThe Peninsula
(MENAFN - The Peninsula) Vienna: Qatar's Hamad Jaber Al Behaih won the gold medal in the speed skating 222m event at the Special Olympics World Winter Games in Vienna, Austria. He finished the ...

more...


 





Google

 
 

Middle East North Africa - Financial Network

MENAFN News Market Data Countries Tools Section  
 

Middle East North Africa - Financial Network
Arabic MENAFN

Main News
News By Industry
News By Country

Search News
Market Indices
Quotes & Charts

Global Indices
Arab Indices

Commodoties

Oil & Energy

Currencies Cross Rates
Currencies Updates
Currency Converter

USA Stocks
Arab Stocks
 

Algeria 
Bahrain 
Egypt 
Iraq
Jordan 
Kuwait 
Lebanon
Morocco 
Oman 
Palestine
Qatar 
Saudi Arabia 
Syria
Tunisia 
UAE 
Yemen

Weather
Economic Calendar
Financial Glossary


Financial Calculators

RSS Feeds [XML]

Corporate Monitor

Events

Real Estate
Submit Your Property

Arab Research
Buy a Research

Press Releases
Submit your PR

Join Newsletters


 
© 2014 menafn.com All Rights Reserved.  Terms of Service | Privacy Policy | Contact Us | Advertise | About MENAFN | Career Opportunities | Feedback | Help