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Volkswagen Emissions Scandal
Volkswagen, the largest auto maker in the world is in deep trouble due to an emissions scandal. The company CEO resigned and the company has put aside $7.3 billion to deal with the issue. cnn money reports on the emissions crisis.
volkswagen chief executive martin winterkorn resigned wednesday as a growing scandal over falsified emissions tests rocked the world’s biggest carmaker.
the scandal broke friday when u.s. regulators said the german company had deliberately programmed some 500,000 vehicles to emit lower levels of harmful emissions in official tests than on the roads.
it exploded into a global crisis tuesday when volkswagen (vlkay) said its internal investigations had found significant emissions discrepancies in 11 million diesel vehicles worldwide.
the company’s stock price has crashed, causing big losses for investors such as the gulf state of qatar, and trust has been shaken in a brand that is at the heart of german manufacturing and exports.
volkswagen, which also owns the audi and porsche brands, overtook toyota (tm) earlier this year to become the world’s biggest automaker by vehicle sales.
This matter will end up with criminal fines and substantial criminal penalties. The ADR for Volkswagen, VLKAY, was trading in the $36 to $38 range until the news broke. It fell to $30 a share and then to $26.50. And the bottom is not yet in sight.
Damage to the Brand Name
German engineering is rightfully famous and trusted. Many German products sell at a premium because the trust that buyers place in various German brands. Volkswagen itself is a household name, first built in the Nazi era in Germany as the “people’s car.” Now we see that Volkswagen was advertising “top-notch clean diesel cars” and generating a big lie. The damage to the Volkswagen brand name is probably a hundred times worse than the news about higher than reported emissions. fortune says that the emissions scandal fallout will last for a long, long time.
2. Volkswagen, the largest auto maker
in the world is in deep trouble due to
an emissions scandal.
3. The company CEO resigned and the
company has put aside $7.3 billion to
deal with the issue.
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6. volkswagen chief executive martin
winterkorn resigned wednesday as a
growing scandal over falsified emissions
tests rocked the world’s biggest
carmaker.
7. the scandal broke friday when u.s.
regulators said the german company had
deliberately programmed some 500,000
vehicles to emit lower levels of harmful
emissions in official tests than on the
roads.
8. it exploded into a global crisis tuesday
when volkswagen (vlkay) said its
internal investigations had found
significant emissions discrepancies in 11
million diesel vehicles worldwide.
9. the company’s stock price has crashed,
causing big losses for investors such as
the gulf state of qatar, and trust has been
shaken in a brand that is at the heart of
german manufacturing and exports.
10. volkswagen, which also owns the audi
and porsche brands, overtook toyota (tm)
earlier this year to become the world’s
biggest automaker by vehicle sales.
11. This matter will end up with
criminal fines and substantial
criminal penalties.
12. The ADR for Volkswagen, VLKAY,
was trading in the $36 to $38 range
until the news broke.
13. It fell to $30 a share and then to
$26.50. And the bottom is not yet in
sight.
16. Many German products sell at a
premium because the trust that
buyers place in various German
brands.
17. Volkswagen itself is a household
name, first built in the Nazi era in
Germany as the “people’s car.”
18. Now we see that Volkswagen was
advertising “top-notch clean diesel
cars” and generating a big lie.
19. The damage to the Volkswagen
brand name is probably a hundred
times worse than the news about
higher than reported emissions.
20. Fortune says that the emissions
scandal fallout will last for a long,
long time.
21. no one knows what will happen to the
$221 billion in sales car company-the
world’s largest-going forward, and
whether the deception stretches all the
way to the ceo, martin winterkorn.
22. but one wonders what would have
happened had the company opted for
exaggerating its results rather than
falsifying them.
23. The plot goes far beyond one or two
people hiding out in a cubicle and must
have involved hundreds of people
building such a system and making sure
it was implemented inside of 428,000
cars.
24. One wonders what the company might
have been able to accomplish instead if it
put all that brainpower toward meeting
emissions requirements rather than
circumventing them.
25. Lots of people will wonder about
these things as they switch brands
and never come back to Volkswagen.
27. The New York Times discusses
how Volkswagen stock falls as they
attempt to contain the fallout.
28. volkswagen said it would stop selling the
remainder of its 2015 model volkswagen
and audi diesels and not offer its 2016
diesel cars, which were just arriving in
showrooms in the united states.
29. these measures did not stop volkswagen
shares from plummeting more than 20
percent when trading opened in europe
on monday.
30. analysts say that mr. winterkorn will
have to answer tough questions –
including when he and other top
executives at volkswagen, which is
known for being a tightly controlled,
autocratic organization, first learned of
the deception.