LyrArc Article Gist
Volkswagen sales for the VW brand decline by 5.3% in October 2015 over the prior year following the emissions scandal.

LyrArc Article Gist
The VW emissions scandal lingers on five years after the rigging of of millions of diesel vehicles to cheat emissions tests. Now former CEO Martin Winterkorn is ordered to face trial on charges of defrauding customers. It is interesting to note how it all started was a grandiose ambition set by Winterkorn according to this report in the WSJ, to make VW the largest auto company in the world ahead of Toyota and General Motors and push sales of diesel vehicles in the U.S. with "clean diesel vehicles." At this time of pandemic it is appropriate to note that the world has changed since 1946 when the wages of top managers were 2 times that of a Caterpillar company worker, and reached level of 400 times a worker for some executives of companies before the pandemic.  Even in supposedly egalitarian countries where worker representatives are on boards such as Germany, the wages had pushed way upwards to about 170 times the salary of the average worker at VW in 2015 when the emissions crisis erupted. This VW episode shows that the grandiose ambitions of executives were another part of the problem before the pandemic. Today the VW disaster has led to a completely opposite result. Diesel is not taking over the U.S. it is now the now the no go in Germany, as diesel vehicles are being phased out. Instead Germany's auto industry is now making large investments in the electric car industry. Significantly chancellor Merkel and the CDU no longer see the automobile industry in Germany as having some kind of special status and the shift to electric is being made with the planned loss of jobs and a restructuring to replace lost jobs with other jobs over 10 years. And the SPD has called for a legal ratio of the average ratio of a company's top managers  in relation to a workers wage at the same company. The pandemic has put things in perspective on a number of fronts, from wage relationships, health, healthcare and wellbeing, healthy lifestyles, mental health, making clear that health and a commonsense idea of fairness, good infrastructure, and sensible wage relations all go together in this world that the creator made. ...

LyrArc Article Gist
The U.S. Justice Department files a lawsuit against VW seeking $18 billion in sanctions on behalf of the Environmental Protection Agency. VW shares declined by 4 percent. Experts expect an out of court settlement of $12-$13 billion. The inconclusive discussions between the EPA and VW led to the filing of the lawsuit. The lawsuit is seen as sending a message to the auto industry that the kind of behaviour that led to the VW emissions cherating scandal will not be tolerated.

LyrArc Article Gist
Rupert Stadler, CEO of Audi brand of VW, is arrested on Dec. 19, 2018, in connection with the diesel emissions scandal. He is the only member of VW Executive Board to be arrested. Prosecutors raided Mr. Stadler's home and looked for evidence in the investigation. Mr. Stadler says he will cooperate by giving testimony.

LyrArc Article Gist
The European Commission responds to the VW emissions scandal with on the road testing using portable devices approved by the European parliament in Feb. 2016.

LyrArc Article Gist
VW sales of automobiles in the U.S. declined by 15% in November 2015 providing the first indication that buyers in the U.S. are responding to the emissions cheating scandal. More disclosures and statements by VW about "a chain of mistakes" going back to 2005 could lead to further erosion in the U.S. market.

LyrArc Article Gist
VW bonds take a big hit following the emissions scandal. The annual cost of insuring 10 million euros of VW debt against default for five years is 214,000 euros. VW's cash flow after dividends is estimated at 5 billion euros by Fitch in 2016-2017. What is happening to VW goes beyond the emissions scandal. The overly easy environment for corporate borrowing with the loose monetary policy in Europe and the U.S. has made it easy for corporate borrowers to raise money at really low rates. This environment is about to change with VW being the beginning of a shift. In January 2015 VW raised 1 billion euros, with a 15 year bond and interest rate of 1.625%. This bond has dropped in price to 85.6% of face value.

LyrArc Article Gist
The German government's committee on the future of transport has proposals that call for fuel price hikes and electric vehicle quotas as Germany faces heavy European fines for not reducing transport emissions since 1990. This means the stretches of unlimited speed on the Autobahn roadways in Germany may now have speed limits. The proposals include limits of 80 mph on roadways and fuel tax rises from 2023, abolition of tax breaks for diesel cars, quotas for electric and hybrid cars that could get half of the emission cuts needed.

A series of diesel emissions cheating scandals have damaged confidence in diesel, and the lack of progress in climate change through less coal use has damaged confidence in Germany's climate change efforts. A new climate change law is planned.

LyrArc Article Gist
Six years after the VW diesel emissions scandal was uncovered in September 2015 by the California clean air agency, CARB, perceptions have changed in Germany. This report says the charges leveled against the defendants including former CEO include organized commercial fraud and tax evasion. The grounds for this are that thousands of former VW customers were able to claim tax credits in Germany for the vehicle misstated low emissions levels. In Germany organized fraud is subject to up to 10 years in jail. German experts cited here say it is very unlikely that higher management were no aware of the effort to distort emissions results. 

Much has changed in Germany since then. The auto industry has shifted away from diesel to electric cars. German federal government no longer sees Germany's auto industry in the same way that it did in the early years under Merkel.