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  • After several days of high drama, Martin Winterkorn has resigned from his position as chief executive of Volkswagen.

  • The German car maker embroiled in a growing scandal over the rigging of US emissions tests.

  • The sixty-eight year old said he was clearing the way for a fresh start of the company,

  • following revelations that it cheated on the laboratory test in America

  • by using so-called defeat devices, software that detects when the car is undergoing an official test.

  • The revelations came about after researchers in Europe and the US

  • alerted authorities to suspicious nitrogen oxide emission results for some VW cars.

  • On Friday, the US Environmental Protection Agency announced its findings and ordered VW to recall half a million vehicles.

  • The following Monday, VW's US CEO issued an apology at an ill-timed launch party for the new Passat.

  • So let's be clear about this.

  • Our company was dishonest with the EPA, and the California Air Resources Board, and with all of you.

  • And in my German words, we have totally screwed up.

  • We must fix those cars, the cars will prevent this from ever happening again,

  • and we have to make things right.

  • VW has so far set aside 6.5 billion Euros to deal with some of the fallout from the scandal,

  • which it now says affects around 11 million vehicles worldwide.

  • But though the CEO is gone, there's still much to concern investors,

  • who have sent the shares down 30 percent so far this week.

  • There's a bunch of things for Volkswagen investors to worry about.

  • The first is really the fines, so the US regulator fines as well as potentially fines

  • for the ten and a million other diesel vehicles that are around the rest of the world.

  • There is also the issue of lawsuits, recalls.

  • And then taking a step further back and looking long-term,

  • there is the question of how this impacts Volkswagen's business going forward.

  • Umm, their margins, are they gonna be able to go there?

  • Are people still gonna buy them?

  • Is it...Or are they gonna to discount their cars to sell them?

  • Attention will also tend to other car makers.

  • No other manufacturer besides VW has been formally implicated in the scandal.

  • But climate groups have for some time been pointing to the gap

  • between laboratory results and on-the-road emissions.

  • It's been clear that a lot of companies in the auto sector were doing their best to bend the rules of the official laboratory test,

  • which meant that particularly diesel cars in Europe have been emitting a lot more pollutants

  • than the official test said they were.

  • But the Volkswagen deception using a software device that would so blatantly change the output of the car

  • between the laboratory and the highway.

  • I think nobody has been caught doing anything like that.

  • The revelations have rapidly turned to the biggest crisis in VW's 78-year history.

  • And the situation still threatens to escalate further with the company saying

  • more heads will roll over the scandal.

  • Some have even called it the car industry's LIBOR moment.

  • Well, it is an extremely serious scandal because it obviously involves deception and perhaps even fraud at the top of a very large company.

  • And you can look at scandals such as the LIBOR scandal in the banking industry

  • where you had misbehavior that went on for years (that) was never discovered.

  • But when it was discovered, it really shocked everybody that

  • this something so serious should have been going on.

  • And I think that the Volkswagen case is certainly on that level.

  • Shall any of us gonna remember about the 2015 Frankfurt car show

  • is the way the chief of BMW collapsed onstage.

After several days of high drama, Martin Winterkorn has resigned from his position as chief executive of Volkswagen.

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    Noppe posted on 2015/09/25
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