Volkswagen scandal

[greengiraffe]

Porsche family puts a brake on the Volkswagen overhaul

• BUSINESS SPECTATOR
  
• OCTOBER 23, 2015 9:03AM
  

Robert Gottliebsen
[Image: robert_gottliebsen.png]
Business Spectator Columnist
Melbourne

[b]The strong rally on European sharemarkets last night was the best news the family behind the beleaguered Volkswagen empire has had in months.[/b]
What has made the crisis so dangerous for the VW enterprise is that the listed company not only faces enormous costs and damages, but is really a family firm. And, like many family-controlled companies, it is highly leveraged and carefully structured so the descendants of Ferdinand Porsche, who created the “people’s car” for Adolf Hitler, have effective control of the company.
Despite last night’s lift in the share price, raising whatever capital is required to enable the company to survive is made more difficult because earlier this year the two descendants in key VW control positions, Wolfgang Porsche and Ferdinand Piëch, split over whether the then CEO Martin Winterkorn could be trusted.
Piëch — who wanted Winterkorn removed — should have waited a few months because the emissions crisis has resulted in Winterkorn falling on his sword.
Just what the crisis will cost Volkswagen is impossible to determine but, if the final cost — global fines (including US fines), damages and the costs of repairing the company — came in at around €30 billion, they will have escaped lightly, because it could become a lot greater.
As of June 30, 2015, Volkswagen had shareholder funds of €88.4bn plus €7.5bn in hybrids, a grand total of almost €96bn. That €96bn provides the equity for €374bn in total assets, including almost €150bn in borrowings of which just under half are short term. There is also a €28bn pension liability.
The problem is that of the €374bn in total assets, €60bn is intangible, so, on a tangible asset basis, shareholders equity is reduced to €36bn. On the share market, even after last night’s rise, those shareholder funds are valued at only €55bn or €62bn if you include the hybrid. That’s not a lot of equity to support €150bn in debt given what is ahead.
Although it has time, Volkswagen clearly needs to raise equity but 51 per cent of the stock is owned by a public company half owned by the descendants of Ferdinand Porsche, led by Wolfgang Porsche and Ferdinand Piëch.
Fortunately, that holding company, Porsche Automobil, has no debt but its market capitalisation is only around €13bn, which values the Porsche Automobil shareholding in VW at a substantial discount to the market value. It’s almost certain that substantial additional equity raisings would see the family lose control — something it would be very reluctant to agree to.
The ownership structure is made worse because it has superimposed on it a complex board and management formation which is not well suited to the decisive choices that will be required to tread a path through this crisis.
Unless there is clear leadership and a capital raising, the Porsche family faces a long journey down a dangerous road.

[greengiraffe]

Volkswagen cheated a 2nd time on pollution tests: US

• AP
  
• NOVEMBER 03, 2015 11:49AM
  

[Image: 843923-9eb94724-819c-11e5-b7f9-ef4fc8c05fd4.jpg]
A Volkswagen Touareg diesel is tested by the EPA. Source: AP
[b]The US government says Volkswagen cheated a second time on emissions tests, programming about 10,000 cars with larger diesel engines to emit fewer pollutants during testing than in real-world driving.[/b]
The German automaker installed software designed to defeat the tests on VW, Porsche and Audi vehicles from the 2014 to 2016 model years with six-cylinder diesel engines, according to the Environmental Protection Agency and California Air Resources Board. While on the road the cars give off up to nine times more nitrogen oxide pollution than allowed by EPA standards, the agency said.
“VW has once again failed its obligation to comply with the law that protects clean air for all Americans,” said Cynthia Giles, the EPA’s associate administrator of enforcement and compliance assurance.
The violations cover models including the 2014 Touareg, 2015 Porsche Cayenne and the 2016 Audi A6 Quattro, A7 Quattro, A8 and Q5. As with the smaller engines, the EPA says the cars are safe to drive.
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Volkswagen disputed the EPA’s findings, saying it didn’t install software on any of the newly identified vehicles’ engines that would “inappropriately modify” the results of anti-pollution tests.
“It is a permissible software,” said a Volkswagen spokesman, adding: “What’s at issue here is clear: Does the US want competition in the American market or not?”
The company pledged to cooperate with the agency and sent a high-level official to the US.
Separately Porsche, a VW unit and directly caught up in the controversy for the first time, said: “We are surprised to learn this information. Until this notice, all of our information was that the Porsche Cayenne Diesel is fully compliant.”
The cheating was discovered by EPA and CARB tests performed after VW acknowledged in September that it rigged emissions tests for four-cylinder diesel engines on 11 million cars worldwide, including almost 500,000 in the US.
The automaker “knew or should have known that the software ... bypasses, defeats or renders inoperative elements of the vehicle design related to compliance with Clean Air Act Emission standards,” the agency said in a violation notice sent to VW.
EPA officials said they tested VW and other vehicles for the presence of cheating software, and VW is the only one found with a violation. Officials wouldn’t say which other vehicles they tested.
Volkswagen faces fines of up to $US37,500 per vehicle, which means up to $US375 million could be added to penalties already projected in the billions of dollars. The company has set aside about 6.7 billion euros ($US7.38 billion) to pay for eventually recalling and fixing the affected cars. Analysts expect the impact will likely be several times larger than the amount VW has set aside.
The EPA said that the software on the six-cylinder diesels has a timer that turns on pollution controls when testing begins, including fuel injection timing, exhaust gas recirculation rate and fuel injection pressure. All cause the cars to emit less nitrogen oxide pollution by operating at high exhaust temperatures, the agency says in documents posted overnight. One second after the first phase of the test ends, the cars return to normal operation.
So far, the agency hasn’t ordered any recalls of VW vehicles, which it has the authority to do.
It remained unclear whether Volkswagen planned to halt sales of the affected models as it did with the 482,000 diesel-powered vehicles that were revealed in September to contain defeat devices.
VW has said it is working on a fix for the four-cylinder models, which the EPA says can pollute up to 40 times more than emissions limits.
“We need to be sure that the fixes are appropriate and acceptable,” EPA Administrator Janet McCabe said.
Last month, the EPA said it was investigating different software on 2016 VW models that have yet to be certified by the EPA to go on sale in the US. But officials overnight wouldn’t comment about that investigation, saying that testing is still under way.
AP, Dow Jones

[Art or Science]

VW emissions scandal widens with new CO2 revelations
Germany's Volkswagen said on Tuesday an internal probe had found that 800,000 more vehicles showed "inconsistencies" on carbon emissions, including the first petrol engines, as the auto giant sank deeper into a massive pollution cheating scandal.

• POSTED: 04 Nov 2015 07:51
  

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FRANKFURT: Germany's Volkswagen said on Tuesday (Nov 3) an internal probe had found that 800,000 more vehicles showed "inconsistencies" on carbon emissions, including the first petrol engines, as the auto giant sank deeper into a massive pollution cheating scandal.
The company said initial estimates suggested the latest revelation could cost it €2 billion (US$2.2 billion), but "a reliable assessment of the scale of these irregularities is not yet possible".
Separately, Porsche SE, the investment company which owns 32.4 per cent of VW's capital, said Tuesday's revelations could have a "negative impact" on its own results, although it maintained its projections for 2015.
Among the engines affected are 1.4, 1.6 and 2.0 litre motors of VW, Skoda, Audi and Seat vehicles, said a VWspokesman, adding that these cars had been found to be releasing more of greenhouse gas CO2 than previous tests had shown.
At least one petrol engine is concerned, the company said - up to now only its diesel engines had been concerned.
Volkswagen admitted in September that it had fitted 11 million of its diesel vehicles with devices designed to cheat official pollution tests, revelations that have sparked global outrage and investigations across the globe.
The so-called defeat devices turn on pollution controls when cars are undergoing tests and off when they are back on the road, allowing them to spew out harmful levels of nitrogen oxide.
The latest issue opens up another front in the scandal engulfing the company as it relates to a different type of engine and emissions.
It also comes a day after US authorities accused the carmarker of fitting the nitrogen oxide defeat devices also on its larger 3.0 litre diesel vehicles - charges VW adamantly denied.

'Stop at nothing'

"I have pledged from the start that we will stop at nothing in clarifying the circumstances," said chief executive Matthias Mueller in a statement. "We will stop at nothing. It is a painful process but we have no choice," he said.
"The Volkswagen executive board regrets the facts established," he said of the internal probe that uncovered CO2 irregularities, adding that the company will ensure that the correct emissions level are indicated following consultations with the authorities.
In the United States, authorities late Monday accused VW of fitting illegal "defeat devices" not only on its smaller engines, but also into various six-cylinder 3.0 litre diesel VW Touareg, Porsche Cayenne and Audis.
The inclusion of Porsche vehicles among those alleged to contain defeat devices could trip up Mueller, who was drafted in from the luxury sports car unit to replace Martin Winterkorn, who resigned at the height of the scandal.
"We have clear evidence of these additional violations," said Cynthia Giles, an official with the US EPA's Enforcement and Compliance Assurance office. "VW has once again failed its obligation to comply with the law that protects clean air for all Americans," she said.
Mueller did not address the latest US allegations in his statement on Tuesday, as shares in Volkswagen fell 1.5 percent on the Frankfurt stock exchange. VW, the world's number two carmaker by sales, had swiftly denied the new US charges.
"Volkswagen AG wishes to emphasise that no software has been installed in the 3-litre V6 diesel power units to alter emissions characteristics in a forbidden manner," it said in a statement. "Volkswagen will cooperate fully with the EPA (to) clarify this matter in its entirety."

Financial hit

Porsche similarly denied the allegations, insisting that "all of our information was that the Porsche Cayenne Diesel is fully compliant".
Audi, another of VW's high-end brands, insisted that the software installed in its engines were "in line with the law". It argued that the so-called Auxiliary Emission Control Devices (AECD) fitted into its engines were not designed to cheat pollution tests, but maximise the engine's performance under different driving conditions.
Carmakers were allowed to fit AECDs in cars in the United States as long as they kept the authorities informed once a year, a spokesman explained. The scandal is turning into a veritable car crash for a company long seen an emblem of Germany's industrial might.
Volkswagen's finances have already been hurt. Last week, the company booked its first quarterly loss in more than 15 years as it set aside €6.7 billion (US$7.4 billion) to cover the initial costs of the scandal.
VW's sales in the United States have also been hit, as they have stalled in October while other major US automakers enjoyed double-digit gains in what was their best month since 2001.
The holding company Porsche SE is controlled by the Piech and Porsche families who inherited the Volkswagen empire built by Ferdinand Porsche. In its statement, it maintained its projection of post-tax profits for 2015 of between €0.8 billion and €1.8 billion.
- AFP/de

[greengiraffe]

VW says CO2 cheats affect more petrol engines than previously disclosed
4 Hours AgoReuters

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[Image: 103152112-GettyImages-491832946.530x298....1447086511]Getty Images
[url=http://data.cnbc.com/quotes/VOW3-DE]Volkswagen manipulated the carbon dioxide (CO2) emission levels of more petrol-powered vehicles than previously disclosed, a spokesman for the carmaker said on Monday.
VW said on Nov. 3 it had understated the level of CO2 emissions in about 800,000 cars sold mainly in Europe, and consequently their fuel usage.
It said then the cheating affected predominantly 1.2 and 1.4 liter diesel engines and one petrol engine, the 1.4 liter motor with a cylinder cut-off.
[Image: 103027460-GettyImages-489939306.80x60.jpg?v=1443206443]
Volkswagen scandal: Everything you need toknow
In a statement published on Friday after European business hours, the carmaker said it had also identified "implausible CO2 levels" in current petrol models such as the 1.0 liter Seat Ibiza, the 1.2 liter VW Jetta and the 2.0 liter VW Passat.
Some 24 models with petrol engines out of a total 130 VW group vehicles were listed in the attachment on Friday.
A VW spokesman confirmed on Monday more petrol engines were implicated by the CO2 malfeasance than previously disclosed.
[Image: 103092236-Volkswagen.80x60.jpg?v=1445345958]
VW excess emissions could cause 60 US deaths:Study
The revelations about fuel economy and CO2 emissions have deepened the crisis at VW, which is expecting costs of at least 2 billion euros ($2.1 billion) linked to these issues.
The scandal initially centered on software used on up to 11 million diesel vehicles worldwide that VW admitted in September had vastly understated their actual emissions of pollutant nitrogen oxide. VW has set aside 6.7 billion euros to help cover costs related to the vehicle recalls. ($1 = 0.9336 euros).

[greengiraffe]

VW emission issues extend to 75,000 more vehicles


New disclosure by carmaker on luxury cars and SUVs dating back to 2009 widens scandal

WASHINGTON • Volkswagen (VW) has told US regulators that emissions issues in larger luxury cars and sport utility vehicles (SUVs) extend to an additional 75,000 vehicles dating back to 2009, the United States Environmental Protection Agency (EPA) said.
The disclosure widened the VW scandal, which had previously focused mainly on smaller-engined, mass-market cars, and raised the possibility that engineers at both the Audi and VW brands could have been involved in separate emissions schemes.
The EPA and California Air Resources Board on Nov 2 accused VW of evading emissions in at least 10,000 Audi, Porsche and VW SUVs and cars with 3-litre V-6 diesel engines. VW first denied the findings.

During a meeting on Thursday, VW and Audi officials told the EPA that the issues extend to all 3-litre diesel engines from model years 2009 to next year.
The new disclosure covers a total of 85,000 vehicles, the EPA said.
California Air Resources Board spokesman Dave Clegern said Audi admitted that the vehicles had auxiliary emissions control equipment that was not disclosed to the US government. "That should have been reported," he said, adding that the agencies are now investigating whether that constituted intentional cheating on VW's part.
Audi spokesman Brad Stertz said that the auxiliary emissions control software is legal in Europe, but that Audi did not "properly notify regulators" of the device.
"We are willing to take another crack at reprogramming to a degree that the regulators deem acceptable," Mr Stertz said.
The cost of reflashing the software is relatively minor, he added.
VW is struggling to cope with the biggest crisis of its history over its admission in September that it had fitted more than 11 million vehicles worldwide with devices designed to cheat pollution tests.
The software devices turn on pollution controls when the car is undergoing testing, and off when it is back on the road, allowing it to spew out harmful levels of nitrogen oxide.
The revelations have sparked investigations in several countries and the company is facing potentially tens of billions of dollars in fines and compensation to vehicle owners.
In addition, VW was shown earlier this month to have also understated carbon emissions for 800,000 vehicles.
The company estimated that this issue alone could cost it €2 billion (S$3 billion).
The scandal, which first broke in August, has sent the shares of the world's second-largest automaker plummeting nearly 40 per cent.
Ratings agencies have also slashed its credit rating, with Moody's saying on Nov 4 that the company's reputation and earnings were at risk from the growing scandal.
Chief executive Matthias Mueller said VW will cut investments by €1 billion next year, as the group scaled back spending to cope with the emissions scandal.
"Everything that is not necessary will be dropped or postponed," he said.
REUTERS, AGENCE FRANCE-PRESSE

[touzi]

Volkswagen have been awarded the 2016 Ig Nobel Chemistry prize "for solving the problem of excessive automobile pollution emissions by automatically, electromechanically producing fewer emissions whenever the cars are being tested."

[brattzz]

waos! hahaha! mitsubishi also nominated right??