Volkswagen: emission scandal investigations to take several months
Air of uncertainty continues to prevail over customers, shareholders and staff as Volkswagen announced on Thursday that completing investigation over its emissions scandal could take longer than expected.
Following Wednesday’s seven-hour board meeting, a supervisor from the company said that investigations could take up to several months to complete. Volkswagen also faces an external inquiry by U.S. law firm Jones Day. Reuters reported that it had cancelled a shareholders' meeting that was supposed to take place on Nov. 9.
Volkswagen also confirmed a Reuters’ report that its current management board chairman of financial services business, Frank Witter, will take charge of the responsibilities of finance chief Hans Dieter Pötsch, who is all set to become the group supervisory board chairman.
Meanwhile, a German prosecutor has reported that Martin Winterkorn, Volkswagen’s former CEO, was under not under any formal investigation and that they were just investigating claims which came from unidentified people.
In September, U.S. Environmental Protection Agency or EPA found Volkswagen of using illegal software that turns on cars’ full emissions control system when it detected an emissions testing whereas the controls remain turned off when the cars were being normally driven. This allows emission of large quantities of pollution rapidly. EPA estimated that the cars belch 40 times greater pollution than mentioned in Clean Air Act. In addition, the pollutants are capable of causing serious health problems, including asthma attacks, other respiratory diseases and premature death.
Europe’s largest carmaker admitted of installing the software in 11 million of its vehicles, drawing worldwide investigation.
As more information unfolds regarding the VW scandal, its shares have been plummeting, close to touching a 4-year low. At the stock's lowest point, the company is facing more than US$30 billion (AU$42.87 billion) wipe-off in its market value since the scandal began and is under tremendous pressure as more number of customers lose faith in them.
It has also affected car industry globally, taking away people’s confidence from using diesel cars. Since the crisis began, the company has been involved in coming up with new ways to boost cash flow and cut costs to meet the high cost.
"The company has a fairly robust balance sheet -- but also has a very conservative approach to financing and its credit rating," Bernstein analyst Max Warburton said in a research note this week. "We believe that if the cash costs exceed 10 billion euros, a capital raise is highly likely," he added.
Volkswagen has been also advised to sell its trucks business or brands such as Bugatti, Ducati and Lamborghini.
Meanwhile, development chief at BMW, Klaus Froehlich, has spoken in a conference about the company cheating scandal, noting that it wasn’t something his company would ever do. Ford's German boss, Bernhard Mattes, has also expressed similar views.
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