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Volkswagen scandal: German economy threatened as CEO quits - live Volkswagen scandal: German economy threatened as CEO quits - live
(35 minutes later)
10.34am BST10:34
Unsurprisingly, Volkswagen’s image among consumers has been dented by the emissions scandal.
Polling firm YouGov has found that the public’s perception of the VW brand has slumped since last week:
Our Buzz score measures whether a respondent has heard anything positive or negative about a brand in the last two weeks.
A dramatic drop in Buzz score is present in both markets. In the US, there has been a drop of ten points from +10 to 0. In the UK, VW has seen a decline from +5 to -3 in the last few days. It is now the lowest ranked car brand in the UK in terms of Buzz (out of 34). This is a fall of 31 places in a week.
10.25am BST10:2510.25am BST10:25
BMW cars 'fail emission tests'
BMW’s share price was hit this morning because a German car magazine is reporting that some of its diesel cars were found to exceed emissions standards.BMW’s share price was hit this morning because a German car magazine is reporting that some of its diesel cars were found to exceed emissions standards.
BMW has denied using the ‘defeat devices’ used by VW to cut emissions during a test.BMW has denied using the ‘defeat devices’ used by VW to cut emissions during a test.
Reuters has the details:Reuters has the details:
Now BMW's stock is falling because of this: http://t.co/puZq29XMbd pic.twitter.com/r8PNY4USsHNow BMW's stock is falling because of this: http://t.co/puZq29XMbd pic.twitter.com/r8PNY4USsH
Updated at 10.54am BST
10.21am BST10:2110.21am BST10:21
More details about exactly who at VW was involved in the scandal could come tomorrow:More details about exactly who at VW was involved in the scandal could come tomorrow:
RTRS Reporting That VW Will Begin Announcing Names Of People Involved In Emissions Scandal From Friday OnwardsRTRS Reporting That VW Will Begin Announcing Names Of People Involved In Emissions Scandal From Friday Onwards
10.09am BST10:0910.09am BST10:09
BMW’s share price is swerving around today, dropping 4% at one stage to become the biggest faller on the DAX.BMW’s share price is swerving around today, dropping 4% at one stage to become the biggest faller on the DAX.
They had been 3% higher in early trading, in what the FT calls “a very skittish mood”.They had been 3% higher in early trading, in what the FT calls “a very skittish mood”.
Another volatile day for autos - BMW up, then down then up again on reports it's being dragged in to emissions story pic.twitter.com/LRFYCw6oltAnother volatile day for autos - BMW up, then down then up again on reports it's being dragged in to emissions story pic.twitter.com/LRFYCw6olt
BMW shares take a sudden tumble http://t.co/IWrMg2mLdjBMW shares take a sudden tumble http://t.co/IWrMg2mLdj
9.54am BST09:549.54am BST09:54
The Volkswagen diesel emissions scandal could be as serious as BP’s Gulf of Mexico oil disaster, warns professor Baback Yazdani, dean of Nottingham Business School.The Volkswagen diesel emissions scandal could be as serious as BP’s Gulf of Mexico oil disaster, warns professor Baback Yazdani, dean of Nottingham Business School.
Professor Yazdani, a former director of Product Development Operations at Jaguar Land Rover, believes the financial consequences could be immense:Professor Yazdani, a former director of Product Development Operations at Jaguar Land Rover, believes the financial consequences could be immense:
“This could be an unprecedented loss for VW, which became the world’s largest automaker this year.“This could be an unprecedented loss for VW, which became the world’s largest automaker this year.
This may be at the same scale as BP’s Gulf of Mexico disaster, or worse, proving that responsible management and leadership is of prime importance to all companies.This may be at the same scale as BP’s Gulf of Mexico disaster, or worse, proving that responsible management and leadership is of prime importance to all companies.
The financial consequences are too early to calculate as the warranty costs will be combined by loss of consumer trust and potential fines in North America, Europe and beyond. The resignation of CEO Martin Winterkorn is an attempt to draw a line and make rapid changes.”The financial consequences are too early to calculate as the warranty costs will be combined by loss of consumer trust and potential fines in North America, Europe and beyond. The resignation of CEO Martin Winterkorn is an attempt to draw a line and make rapid changes.”
In July, BP agreed to pay a record environmental fine of $18.7bn over the Deepwater Horizon disaster; VW has now hired the legal firm which BP used.In July, BP agreed to pay a record environmental fine of $18.7bn over the Deepwater Horizon disaster; VW has now hired the legal firm which BP used.
Updated at 9.55am BSTUpdated at 9.55am BST
9.20am BST09:209.20am BST09:20
VW shares are continuing to climb this morning, and are now up almost 7% at €119.VW shares are continuing to climb this morning, and are now up almost 7% at €119.
Clairinvest fund manager Ion-Marc Valahu says investors in Frankfurt are welcoming the departure of Martin Winterkorn.Clairinvest fund manager Ion-Marc Valahu says investors in Frankfurt are welcoming the departure of Martin Winterkorn.
“They’ve kicked out the CEO. The company and its shares should be able to stabilise.”“They’ve kicked out the CEO. The company and its shares should be able to stabilise.”
(via Reuters)(via Reuters)
9.06am BST09:069.06am BST09:06
EU countries lobbied for flawed emission testsEU countries lobbied for flawed emission tests
Documents seen by the Guardian show that Europe’s three largest countries have been pushing regulators for less rigorous testing on carbon dioxide emissions.Documents seen by the Guardian show that Europe’s three largest countries have been pushing regulators for less rigorous testing on carbon dioxide emissions.
France, Germany and the UK all wanted loopholes that would have allowed cars to emit more CO2 than legally permitted -- pushing up greenhouse gas emissions and fuel bills.France, Germany and the UK all wanted loopholes that would have allowed cars to emit more CO2 than legally permitted -- pushing up greenhouse gas emissions and fuel bills.
Germany’s proposals including testing on sloping downhill tracks, and also allow manufacturers to declare a final CO2 value 4% lower than the one measured.Germany’s proposals including testing on sloping downhill tracks, and also allow manufacturers to declare a final CO2 value 4% lower than the one measured.
The Volkswagen scandal relates to nitric oxide (NO) and nitrogen dioxide (NO2), rather than carbon dioxide, but it puts all three country’s commitment to lower emissions into question. Here’s the full story.The Volkswagen scandal relates to nitric oxide (NO) and nitrogen dioxide (NO2), rather than carbon dioxide, but it puts all three country’s commitment to lower emissions into question. Here’s the full story.
Exclusive: UK, France and Germany lobbied for flawed car emissions tests, documents reveal http://t.co/gB378AYQ5BExclusive: UK, France and Germany lobbied for flawed car emissions tests, documents reveal http://t.co/gB378AYQ5B
Updated at 9.56am BSTUpdated at 9.56am BST
8.42am BST08:428.42am BST08:42
Shares in Japanese carmakers fell today, on fears that they could be hit by the emissions scandal.Shares in Japanese carmakers fell today, on fears that they could be hit by the emissions scandal.
Mazda led the selloff, down 6.8%, followed by Mitsubishi (-5%), Honda (down 3%), and Nissan (-2.5%).Mazda led the selloff, down 6.8%, followed by Mitsubishi (-5%), Honda (down 3%), and Nissan (-2.5%).
Manufactures of car parts were also hit. NGK Insulators, which makes diesel particulate filters, fell almost 7%.Manufactures of car parts were also hit. NGK Insulators, which makes diesel particulate filters, fell almost 7%.
That all helped send the Nikkei index down by 2.7%, as traders returned to their desks after a three-day holidayThat all helped send the Nikkei index down by 2.7%, as traders returned to their desks after a three-day holiday
Toyota was less affected, only falling by 1.85%. It could benefit from the scandal, if more consumers buy electric cars such as its Prius.Toyota was less affected, only falling by 1.85%. It could benefit from the scandal, if more consumers buy electric cars such as its Prius.
8.30am BST08:308.30am BST08:30
It has emerged overnight that Volkswagen told customers in California five months ago that their emissions software needed upgrading.It has emerged overnight that Volkswagen told customers in California five months ago that their emissions software needed upgrading.
Reuters has the story:Reuters has the story:
In April of 2015, Volkswagen of America sent letters to California owners of diesel-powered Audis and Volkswagens informing them of an “emissions service action” affecting the vehicles.In April of 2015, Volkswagen of America sent letters to California owners of diesel-powered Audis and Volkswagens informing them of an “emissions service action” affecting the vehicles.
Owners were told they would need to take their cars to a dealer for new software to ensure tailpipe emissions were “optimised and operating efficiently.”Owners were told they would need to take their cars to a dealer for new software to ensure tailpipe emissions were “optimised and operating efficiently.”
The company didn’t explain that it was taking the action in hopes of satisfying government regulators, who were growing increasingly sceptical about the reason for discrepancies between laboratory emissions test results and real world pollution from Volkswagen’s diesel cars.The company didn’t explain that it was taking the action in hopes of satisfying government regulators, who were growing increasingly sceptical about the reason for discrepancies between laboratory emissions test results and real world pollution from Volkswagen’s diesel cars.
However, the fix did not address those concerns, regulators say.However, the fix did not address those concerns, regulators say.
This raises even more questions about how long Volkswagen has been aware of the issue, and how high up the management chain the concerns went. Here’s the full story.This raises even more questions about how long Volkswagen has been aware of the issue, and how high up the management chain the concerns went. Here’s the full story.
Updated at 8.31am BSTUpdated at 8.31am BST
8.20am BST08:208.20am BST08:20
The Volkswagen crisis has shown that corporate governance at the carmaker failed badly, and other company bosses must be worried.The Volkswagen crisis has shown that corporate governance at the carmaker failed badly, and other company bosses must be worried.
Nick Anderson of Henderson Global Investors tells Bloomberg TV:Nick Anderson of Henderson Global Investors tells Bloomberg TV:
Every CEO in Europe must be thinking about the culture in their business, and their whistle-blowing policy.Every CEO in Europe must be thinking about the culture in their business, and their whistle-blowing policy.
Henderson predicts that Volkswagen could lose 3 to 4% of market share, based on previous car scandals, and also lose pricing power - meaning new VW’s will be cheaper.Henderson predicts that Volkswagen could lose 3 to 4% of market share, based on previous car scandals, and also lose pricing power - meaning new VW’s will be cheaper.
8.15am BST08:158.15am BST08:15
VW shares rise 3.5% in early tradingVW shares rise 3.5% in early trading
Shares in Volkswagen have risen around 3.5% at the start of trading in Frankfurt, as investors continue to welcome Winterkorn’s departure.Shares in Volkswagen have risen around 3.5% at the start of trading in Frankfurt, as investors continue to welcome Winterkorn’s departure.
They’re still down around 25% since the scandal broke, though.They’re still down around 25% since the scandal broke, though.
Volkswagen shares trade 3.5% higher after open despite or b/c several broker downgrades. pic.twitter.com/esiovQ1wGjVolkswagen shares trade 3.5% higher after open despite or b/c several broker downgrades. pic.twitter.com/esiovQ1wGj
8.08am BST08:088.08am BST08:08
Volkswagen CEO leaves with huge pensionVolkswagen CEO leaves with huge pension
Martin Winterkorn is walking away from Volkswagen with a massive pension pot worth over €28m.Martin Winterkorn is walking away from Volkswagen with a massive pension pot worth over €28m.
And as he stepped down, rather than being fired, he could also collect two years pay despite the emissions scandal.And as he stepped down, rather than being fired, he could also collect two years pay despite the emissions scandal.
Bloomberg explains:Bloomberg explains:
After Winterkorn disclosed Wednesday that he had asked the board to terminate his role, company spokesman Claus-Peter Tiemann declined to comment on how much money the departing CEO stands to get. Volkswagen’s most recent annual report outlines how Winterkorn, its leader since 2007, could theoretically collect two significant payouts.After Winterkorn disclosed Wednesday that he had asked the board to terminate his role, company spokesman Claus-Peter Tiemann declined to comment on how much money the departing CEO stands to get. Volkswagen’s most recent annual report outlines how Winterkorn, its leader since 2007, could theoretically collect two significant payouts.
Winterkorn’s pension had a value of €28.6m at the end of last year, according to the report, which doesn’t describe any conditions that would lead the company to withhold it. And under certain circumstances, he also can collect severance equal to two years of “remuneration.”Winterkorn’s pension had a value of €28.6m at the end of last year, according to the report, which doesn’t describe any conditions that would lead the company to withhold it. And under certain circumstances, he also can collect severance equal to two years of “remuneration.”
He was Germany’s second-highest paid CEO last year, receiving a total of €16.6m in compensation from the company and majority shareholder Porsche SE.He was Germany’s second-highest paid CEO last year, receiving a total of €16.6m in compensation from the company and majority shareholder Porsche SE.
Martin Winterkorn likely to leave #Volkswagen with €28.6 million ($32 million) pension http://t.co/1MKPa3qhrO pic.twitter.com/e2nh8ihwhPMartin Winterkorn likely to leave #Volkswagen with €28.6 million ($32 million) pension http://t.co/1MKPa3qhrO pic.twitter.com/e2nh8ihwhP
8.00am BST08:008.00am BST08:00
The Volkswagen scandal could even hurt growth across Europe, if other carmakers are drawn in.The Volkswagen scandal could even hurt growth across Europe, if other carmakers are drawn in.
Rabobank strategist Jane Foley believes it could even hurt the value of the euro - if investors are scared away from Europe.Rabobank strategist Jane Foley believes it could even hurt the value of the euro - if investors are scared away from Europe.
She told Bloomberg TV:She told Bloomberg TV:
We don’t know that other carmakers aren’t going to be drawn into this scandal, we need to see how this develops.We don’t know that other carmakers aren’t going to be drawn into this scandal, we need to see how this develops.
One in six people in Germany are employed in the auto-related sector, by some measures, she adds, making them vulnerable if German exports suffer.One in six people in Germany are employed in the auto-related sector, by some measures, she adds, making them vulnerable if German exports suffer.
Foley warns:Foley warns:
It has the potential to spread. If it does, it certainly could affect European growth, and then the euro too.It has the potential to spread. If it does, it certainly could affect European growth, and then the euro too.
Updated at 9.57am BSTUpdated at 9.57am BST
7.51am BST07:517.51am BST07:51
ING: VW is biggest risk to German economyING: VW is biggest risk to German economy
The Volkswagen scandal could become the biggest threat to German economic growth, if consumers lose faith in its cars.The Volkswagen scandal could become the biggest threat to German economic growth, if consumers lose faith in its cars.
ING chief economist Carsten Brzeski argues that the whole country could suffer:ING chief economist Carsten Brzeski argues that the whole country could suffer:
“All of a sudden, Volkswagen has become a bigger downside risk for the German economy than the Greek debt crisis.”“All of a sudden, Volkswagen has become a bigger downside risk for the German economy than the Greek debt crisis.”
“If Volkswagen’s sales were to plunge in North America in the coming months, this would not only have an impact on the company, but on the German economy as a whole.”“If Volkswagen’s sales were to plunge in North America in the coming months, this would not only have an impact on the company, but on the German economy as a whole.”
The German economy has defied Greece, Eurozone stagnation and China, but can it also stomach a possible fall in VW sales?The German economy has defied Greece, Eurozone stagnation and China, but can it also stomach a possible fall in VW sales?
7.33am BST07:337.33am BST07:33
Introduction: German car industry faces crisisIntroduction: German car industry faces crisis
Good morning.Good morning.
Germany is reeling from the unfolding scandal at Volkswagen scandal today, after the company’s chief executive was forced to resign last night.Germany is reeling from the unfolding scandal at Volkswagen scandal today, after the company’s chief executive was forced to resign last night.
The revelations that VW deliberately used a “defeat device” to rig diesel emissions test is turning into Germany’s biggest corporate crisis in decades.The revelations that VW deliberately used a “defeat device” to rig diesel emissions test is turning into Germany’s biggest corporate crisis in decades.
Berlin’s Tagesspiegel newspaper has summed up the sense of rising panic in Germany, saying:Berlin’s Tagesspiegel newspaper has summed up the sense of rising panic in Germany, saying:
“Germany’s entire auto industry is at stake here. And when it’s at stake, almost everything’s at stake.”“Germany’s entire auto industry is at stake here. And when it’s at stake, almost everything’s at stake.”
Volkswagen is now searching for a new CEO, following Martin Winterkorn’s resignation.Volkswagen is now searching for a new CEO, following Martin Winterkorn’s resignation.
Guardian front page, Thursday 24 September 2015: Scandal claims VW chief as lawyers circle pic.twitter.com/jYMQqIPc5XGuardian front page, Thursday 24 September 2015: Scandal claims VW chief as lawyers circle pic.twitter.com/jYMQqIPc5X
The company faces massive fines from regulators, as lawyers prepare class action lawsuits from VW consumers whose diesel cars proved rather less environmentally friendly than promised.The company faces massive fines from regulators, as lawyers prepare class action lawsuits from VW consumers whose diesel cars proved rather less environmentally friendly than promised.
Related: Volkswagen chief quits over emissions scandal as car industry faces crisisRelated: Volkswagen chief quits over emissions scandal as car industry faces crisis
As we covered in yesterday’s liveblog, Angela Merkel’s government is facing tough questions about what it knew, and when. The German Green party says ministers were aware of problems this summer, but didn’t act.As we covered in yesterday’s liveblog, Angela Merkel’s government is facing tough questions about what it knew, and when. The German Green party says ministers were aware of problems this summer, but didn’t act.
Politico have dubbed it “Merkel’s car nightmare”, potentially more harmful to her chancellorship than Greece or the refugee crisis.Politico have dubbed it “Merkel’s car nightmare”, potentially more harmful to her chancellorship than Greece or the refugee crisis.
We’ll also be tracking other events across the world economy and the financial markets...We’ll also be tracking other events across the world economy and the financial markets...
Updated at 8.06am BSTUpdated at 8.06am BST