VW gets hit with multi-billion fine

[Ponyboy]

Being a non-finance guy, I am curious - what happens to the stock price (POAHY) if VW sells them off to raise funds? My non-educated impression is that the stock would tank, but as I said I am non-educated.

It appears as though Muller, the Porsche CEO, will be the interim VAG CEO. If they do have to spin off Porsche, then I'm sure Piëch is already at work gathering investors in an attempt to make the company private again.

The fine amount I've been hearing about most is 18 billion which doesn't include the cost of recall etc. VAG has already set aside 7 billion (I guess in some type of sinking fund) to pay for the recalls. Consider though that the 18 billion is just coming from one nation and there are several investigating. Consider also that everyone is opening criminal investigations already as well.

 

[Peace Frog]

Ponyboy, this ridiculous. It's going to be as/more expensive as the BP spill in the gulf. No prayer in hell that this has done as much damage to the environment and the local, national, or global economy as the Deepwater rig disaster. (...and 11 humans died)

The costs don't fit the crime if this is going in any way to surpass $15 billion.....but then again I'm no environmental scientist. I read a couple days ago that to-date the Exxon '89 spill has costed ~$7 billion in cleanup costs.


Pre-exposure: I didn't like VW's offerings and wouldn't buy one in a thousand years. With that said I really hope we use logic and reasoning to make them "pay" for this perpetration, not just some enormous penalty fine in dollars and cents.

 

[steveny]

Ponyboy, this ridiculous. It's going to be as/more expensive as the BP spill in the gulf. No prayer in hell that this has done as much damage to the environment and the local, national, or global economy as the Deepwater rig disaster. (...and 11 humans died)

The costs don't fit the crime if this is going in any way to surpass $15 billion.....but then again I'm no environmental scientist. I read a couple days ago that to-date the Exxon '89 spill has costed ~$7 billion in cleanup costs.


Pre-exposure: I didn't like VW's offerings and wouldn't buy one in a thousand years. With that said I really hope we use logic and reasoning to make them "pay" for this perpetration, not just some enormous penalty fine in dollars and cents.

They will buy the cars back then resell them to China/South America. Whatever comes out the tail pipe will end up in the same atmosphere as it would have in the first place. No one will figure out why again cars can't get better than 30mile per gallon of fuel... although as you now know if you weren't driving in the 80s it's totally possible to get great mileage if there isn't a bunch of shit strapped to the motor, or that shit is overridden. I fondly remember datsuns, toyotas etc... Even small trucks going twice as far on a gallon of gas in the 80s than they do now.

 

[Peace Frog]

They will buy the cars back then resell them to China/South America. Whatever comes out the tail pipe will end up in the same atmosphere as it would have in the first place. No one will figure out why again cars can't get better than 30mile per gallon of fuel... although as you now know if you weren't driving in the 80s it's totally possible to get great mileage if there isn't a bunch of shit strapped to the motor, or that shit is overridden. I fondly remember datsuns, toyotas etc... Even small trucks going twice as far on a gallon of gas in the 80s than they do now.

Very interesting. I wonder if you do more for the planet having a "dirty" car that uses less fuel, or a clean car that uses more?

And that is something I didn't think of with regard to the reselling of vehicles. I was gonna guess they would fix them all then resell them as used certified. How naive of I

 

[Tom239]

The amount of any fine hasn't been determined yet. The title of this thread (VW gets hit with multi-billion fine) is premature.

The offense here is not just that the cars pollute, it is also the willful deceit. We rely on each manufacturer's assertions when they submit a car for certification. Cheating undermines the whole process in the same way that, for example, perjury undermines the criminal justice system.

VW knew (or should have known) what the potential fine was for every car they sold when they decided to cheat.

 

[Gansan]

Very interesting discussion. First, regarding whether the BP oil spill was worse (with the 11 people killed), we should also consider how many people die from air pollution in generally and think about whether the VW "cheater" pollution also causes deaths. The horrendous air pollution in China is attributed to 1.6 million premature deaths per year in China. Thinking back to smoggy SoCal in my childhood, I'm glad things here are cleaner nowadays. Still, I have no doubt there are still some number of deaths in this country due to pollution, and one wonders how many deaths a half million smoggy diesel cars may have contributed to, statistically. Could it have been more than 11?

I really doubt that VW will get off with shipping the dirty cars off to China. That's really letting them off easy and the pollution still happens. It seems more likely that they will have to patch the software to run in clean mode all the time and accept the lower gas mileage and performance. After all, that is the actual performance of the drivetrain as it was designed.

 

[steveny]

Very interesting discussion. First, regarding whether the BP oil spill was worse (with the 11 people killed), we should also consider how many people die from air pollution in generally and think about whether the VW "cheater" pollution also causes deaths. The horrendous air pollution in China is attributed to 1.6 million premature deaths per year in China. Thinking back to smoggy SoCal in my childhood, I'm glad things here are cleaner nowadays. Still, I have no doubt there are still some number of deaths in this country due to pollution, and one wonders how many deaths a half million smoggy diesel cars may have contributed to, statistically. Could it have been more than 11?

I really doubt that VW will get off with shipping the dirty cars off to China. That's really letting them off easy and the pollution still happens. It seems more likely that they will have to patch the software to run in clean mode all the time and accept the lower gas mileage and performance. After all, that is the actual performance of the drivetrain as it was designed.

Yeah it's better to leave the cars here and instead of making '10 pollution units' burning one gallon of fuel to go 50 miles they can tune them to only make '7 pollution units' from one gallon of fuel and go just 25 miles. It's brilliant!

 

[Ponyboy]

Ponyboy, this ridiculous. It's going to be as/more expensive as the BP spill in the gulf. No prayer in hell that this has done as much damage to the environment and the local, national, or global economy as the Deepwater rig disaster. (...and 11 humans died)

The costs don't fit the crime if this is going in any way to surpass $15 billion.....but then again I'm no environmental scientist. I read a couple days ago that to-date the Exxon '89 spill has costed ~$7 billion in cleanup costs.

Pre-exposure: I didn't like VW's offerings and wouldn't buy one in a thousand years. With that said I really hope we use logic and reasoning to make them "pay" for this perpetration, not just some enormous penalty fine in dollars and cents.

Well, VAG admits to 11 million cars being affected across many nations with 500,000 in the US. The EPA can fine a max of 37k per car and that'd be 18.5 billion (give or take a few hundred million). So 18.5 billion from one nation alone. That's close to two years of Net Income for VAG.

Please note that this includes VW and Audi and Audi has a different frame of reference for most consumers. I do like some of VW's products with one being the Golf GTI and Golf R. I also like the Audi A5. But I have to wonder what else/if anything else VAG is not telling us.

 

[DRIFTER]

People that purchased these cars did so because they got good fuel milage. Not because they are good for the environment. I'm willing to bet that the percentage of owners that care about EPA requirement are a very very small percentage of NEW car owners. (The ones VW cares about)

VW gave people what they wanted. A snappy lil turbo diesel economy car that get fantastic fuel milage and is actualy fun to drive. Do I care they tricked the EPA to do it. Nope! Tree huggers may disagree but who cares they are not buying diesels anyway.

Saying "its worse then the BP oil spill and killed more people". lol well isn't that a stretch. How many of you smoke cigarettes, eat unhealthy, and live stressfull lives.

For perspective:

GM ignition switch defect: Today, 51 deaths have been linked to the bad ignition switches. The total number of injury claims stand at 4,180. What's worse is GM knew there was a problem with the ignition switches, but attempted to hide it from the public.

Ford Motor Co.'s neglect of a defect in the Pinto's fuel tank that caused the car to explode on impact. When told of the problem, Ford executive Lee Ioccoca acted fast to cover it up. Approx. 500 deaths resulted from the Pinto's faulty fuel system.

Toyota and there unintended acceleration by the vehicle the list goes on

VW tricked the EPA to give its customers exactly what they wanted. Then got caught most likley by there competitors who I'm sure were feeling the pinch.

 

[steveny]

People that purchased these cars did so because they got good fuel milage. Not because they are good for the environment. I'm willing to bet that the percentage of owners that care about EPA requirement are a very very small percentage of NEW car owners. (The ones VW cares about)

VW gave people what they wanted. A snappy lil turbo diesel economy car that get fantastic fuel milage and is actualy fun to drive. Do I care they tricked the EPA to do it. Nope! Tree huggers may disagree but who cares they are not buying diesels anyway.

Saying "its worse then the BP oil spill and killed more people". lol well isn't that a stretch. How many of you smoke cigarettes, eat unhealthy, and live stressfull lives.

For perspective:

GM ignition switch defect: Today, 51 deaths have been linked to the bad ignition switches. The total number of injury claims stand at 4,180. What's worse is GM knew there was a problem with the ignition switches, but attempted to hide it from the public.

Ford Motor Co.'s neglect of a defect in the Pinto's fuel tank that caused the car to explode on impact. When told of the problem, Ford executive Lee Ioccoca acted fast to cover it up. Approx. 500 deaths resulted from the Pinto's faulty fuel system.

Toyota and there unintended acceleration by the vehicle the list goes on

VW tricked the EPA to give its customers exactly what they wanted. Then got caught most likley by there competitors who I'm sure were feeling the pinch.

Exactly! Customers got exactly what they wanted, fuel efficient fun car to drive. However now they can say they wanted a clean car if there's money on the table for them to grab. What vw proved by doing this is that cars CAN get way better mileage then they currently do.

 

[cmthomson]

VW tricked the EPA to give its customers exactly what they wanted. Then got caught most likley by there competitors who I'm sure were feeling the pinch.

Actually they got caught by a professor in West Virginia, who at first thought his test equipment was messed up. 40x expected emissions would tend to do that.

 

[steveny]

Actually they got caught by a professor in West Virginia, who at first thought his test equipment was messed up. 40x expected emissions would tend to do that.

Don't believe the hype. The actual factual information was 10-20% higher than should be. The 30-40 Times comment was the quick to the trigger first media report.

So like I've been saying if someone did a comparison between how many miles you can go in a "dirty" car on one gallon of fuel compared to a "clean" car, figure in the extra fuel needed, the pollution it takes to create that fuel etc I think people would see the dirty car ain't that dirty. However the dirty car doesn't collect extra fuel tax dollars because it uses less fuel.

I can guess that a fuel oil burning heat source puts out more pollution then 10 jettas. If you've never been to the northeast you'd be surprised to see how many people burn fuel oil to heat their homes for 6-8 months out of the year.

 

[cmthomson]

Don't believe the hype. The actual factual information was 10-20% higher than should be. The 30-40 Times comment was the quick to the trigger first media report.

Hardly the first. I listened to/watched several interviews with the prof, on sources as disparate as CBC radio (Canada) and CNBC (Wall Street). 40x is not a typo. Of course it refers to one pollutant (NOx) in one situation, and perhaps the total of all emissions over a year is as low as you claim, but it isn't hype when it's true.

As for heating oil, I couldn't agree more. It's always been a mystery to me why the northeastern states don't have natural gas piping like all the rest of the US and Canada. [Don't tell me it's geography or density: take a look at central BC]

 

[Tom239]

Don't believe the hype. The actual factual information was 10-20% higher than should be. The 30-40 Times comment was the quick to the trigger first media report.

What's your source for "10%-20% higher than it should be" ?

The EPA's letter to VW says NOx was at 10x to 40x the allowable levels. I gave the link in post #8 to this thread.

 

[Ponyboy]

ICBW, but I understood it as up to 40x and as low as 3x. 3x as much pollutants is still really bad.

I haven't done any statistical analysis but I always thought the attraction of VW's TDI engines was their MPG and advanced emission tech. It's certainly how the cars were marketed.

The high-mpg-cars-are-more-environmentally-sound-than-low-emission-cars is non sequitur. VW intentionally deceived regulators and the public across many nations and will likely be heavily punished for fraud not for selling a "fun car" that was mislabeled.

 

[steveny]

Well I went against my own advice and bought more shares closer to the bottom. I sold most all of it at 30.50 for a pretty good profit.