First, it was (cue the Soup Nazi voice) no affordable diesels for you!
Now, it’s no dividends for you.
If you’ve invested in VW stock, it looks like you’re out of luck. The stomping Uncle has been giving VW over the diesel emissions “cheating” scandal is having the not-surprising consequence that the company’s losing money.
Which means you lose – if you’re a shareholder.
Yesterday, the industry publication Automotive News reported that VW Group (which includes Audi and Porsche) may suspend dividend payouts due to the crippling fines and other costs (including the likely prospect of VW having to buy back – and destroy – almost 600,000 “noncompliant” cars) levied by Uncle and his acolytes, including the Little Uncles operating at the state level.
“There is no sign that shareholders might even be able to hope for a single cent,” Automotive News quoted a VW board member as saying.
Ach, mein Gott.
How catastrophic is this?
The final tab could exceed $50 billion.
VW could be doomed.
Because it’s more than just the money – though the money we’re talking about is an Everest-like, almost inconceivable sum. How to quantify what we are talking about? Put it in perspective? $50 billion is more net profit than Toyota (a much bigger company) earns – globally – in an entire year.
Volkswagen’s annual net profit is around $10 billion … and falling.
Said another way, the hit VW is looking at is such that it could wipe out the company’s ability to turn a profit for years.
Which not only means shareholders may not get a cent for years to come (which is lethal enough) it also means VW may not have das gelt for product development for years to come. That is, to update its car lineup. In a market that demands New and Improved at least every third year (and lately, every other year) not being able to change up one’s cars is as bad as selling crappy cars.
See, for example, the sad case of Mitsubishi.
They had some winners, in terms of cars. The Lancer Evolution, for one. But they also had some losers – in the form of a Titanically catastrophic marketing scheme (Zero Down, Zero Interest for a Year) that gutted revenue and left the company without the necessary funds to update its mode lineup … which is pretty much the same right now (2016) as it was back in 2013.
Nothing new – when it comes to cars – equals not much selling.
Mitsu is on life support.
And now – soon – VW.
The projected federal fines are just the opening salvo, too.
Caught like the Bismarck in ’41, VW is facing a barrage of civil suits – and then there will be the as-yet-unquantified hit that will attend buyers simply abandoning the brand. Not because the cars are bad – they are excellent – but because of the reputation (thanks, Media) that they are “dirty” – which they aren’t.
And because of collapsing resale value (see prior points).
It is possible additional civil suits will be filed by current owners of VW cars generally – not just the “affected” TDI models. The claim will be – and it’s not without merit – that the value of every single car VW has sold has been wilted by this business. Would’t you be pissed off if you owned a Passat or Jetta or Beetle and are looking at a 20 percent (or more) loss of value?
It’s likely actionable.
Meanwhile, the 2016s sit on the dock.
Uncle has issued a fatwa forbidding VW from even trying to sell any new TDI-powered cars until he says ok. Which may not happen in time to make selling the already-built 2016s at anything but fire-sale prices feasible. The negative PR is bad enough. But if this drags on through summer and into Fall… who’s gonna pay full sticker for a leftover 2016? Especially when buyers will know perfectly well that inventories are vast and VW dealers desperate.
Keep in mind: It’s ultimately not VW that’s being punished.
It’s all of us.
Already, we’re denied access to affordable diesel-powered cars – as VW was the only car company selling them in the United States. Mazda had planned to sell them – but has backed away, reasonably – out of fear of what Uncle may do next and concern over the souring by Uncle (and Media) of people’s view of diesel-powered cars generally.
Now, people who invested in VW will take a hit – as will those who own VWs. As will – in all likelihood – the people who currently work for VW, whether the corporation or a dealership or a parts supplier.
Everyone loses – because Uncle.
And over what, exactly? A literally fractional increase in exhaust emissions measured in terms of Parts Per Million (PPM) that does not take into account the lower overall Grams Per Mile (GPM) emissions of an engine that is more efficient (diesel) that uses much less fuel and accordingly produces a lower total volume of emissions.
But Uncle doesn’t care about such things. He’s a berserker, a destroyer of things.
It’s what he does.
It’s all he does.
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Interesting thing happening; in my neck of the woods, TDI’s have begun to sell at over blue book. A few weeks ago, I received a call from the dealer offering to buy back my TDI. I negotiated the price up to book, then declined to sell. If a Dealer is offering me book value to buy back my Vee-Dob, they have to be selling used ones at a significant markup over book.
I bought a 2014 TDI Sportwagen w/manual after reading EP’s review of the TDI Beetle. I have absolutely zero regrets, it’s an amazing car. After owning a diesel vehicle, it would take a lot to get me back into a petrol-powered one. If uncle comes for this ride, I’ll pivot to an older PowerStroke F-350 and roll coal all over their precious roads.
I doubt the dealer wants mine as they just quoted me $4k to replace the dead DSG w/a used one. $6k for a rebuilt.
If VW had some really worthwhile attorneys, they could use the US Constitution as a starting point. And start asking how, where these gov’t agencies derive their power. Gov’ts just can’t pass “rules” as opposed to laws which they can’t make anyway. They could pick apart the gov’ts case and cause a real stir. However, Lawyers and Liars sound so similar and the reason is that the lawyers hide the law from everyone. I’d be questioning every “study” that shows diesel emissions to be harmful. There is no valid way to prove this. Since virtually any produced item can be show to cause cancer, how can you distinguish when 1 item causes cancer when the subjects are exposed to every item that causes cancer?
But the greens are behind persecuting the VW group. Esp. since they have that 150-300 mpg car in production. Such mileage from a car will destroy the green agenda overnight. And we can’t have that now, can we? It’s abhorrent that people can drive cars at will that have no consequence on the environment. How else would the green scum be able to justify their totalitarian agenda? And the ultimate purpose of green shit is to eliminate ALL forms of life on earth.
The VW legal team is useless and is letting the company down. No doubt they will get THEIR money even if everyone else goes bust.
Hi t05,
Inside baseball (which is likely to get me in even more trouble):
Through intermediaries, VW was approached about launching a PR counter-campaign to explain to the public the microcosmic emissions at issue, the arbitrariness of the tests and the overall benefit of their clean diesel engines. Instead, the corporate cowards who run the operation decided to roll over on their backs like a cur dog and hope no one would kick them.
eric, not to change he subject but I’m sure you’re aware that Holley offered a stand-alone TBI not many years into TBI’dom. We’ve all seen various systems come and go for the main part. I kept thinking there would be a simply system that would learn and be reliable.
It would seem that it has now happened. http://www.hotrod.com/how-to/engine/1603-1968-plymouth-valiant-fitech-reinvents-efi-how-they-do-it-better-and-cheaper/
Getting people to understand stuff like that given their emotional conditioning is an uphill battle. They close down and won’t listen. They would automatically believe it was lies from an evil corporation.
Definitely a shakedown. The funny thing is I’m more likely than ever to consider a VW for my next purchase. They deserve a badge of honor for sticking it to “Uncle”. I’d love to consider a TDI.
Ray from Car Talk visits Cuba
http://www.nytimes.com/2016/04/03/travel/ray-magliozzi-car-talk-cuba.html?_r=0
Pretty funny. After all this VW nonsense started, my Jag got a 02 sensor recalibration service bulletin with mandatory California smog reporting certificate. They’re all doing the exact same thing as VW. You bet your ass it’s agenda driven.
US politicians and bureaucrats can only see two inches ahead and have only one goal these days. Money for uncle to spend on uncle’s busted programs and friends. Right out of Atlas Shrugged. How do you say adios USA, hello China in German?
I wish I bought a diesel before this crap happened. Fkn Obama.
VW may just have to pull a Fiat & leave the U.S. market for awhile.
Let the feds & the states twist in the wind, after all, they aren’t the ones who suffered actual losses.
VW may just have to pull a Fiat & leave the U.S. market for awhile.
That’s almost certainly what Uncle wants ALL foreign carmakers to eventually do (if he doesn’t destroy them first as he’s about to do to VW) – only permanently, not just “for a while.”
What better way to guarantee the success of the Big Three (especially Gunvermint Motors) than if they don’t have any foreign competition?
This will be a UAW/Pat Buchanan/Ralph Nader wet dream come true.
lib, you must have forgotten the big 3 includes Fiat. Last week my wife was going to rent a car the same day she lost her billfold…..so I got to do it. W/O a DL, she couldn’t drive it off the lot but I did while she went to TxDOT and got a new license. It was a Chrysler 200. I made the remark it wasn’t what she reserved but it fell on deaf ears.
I go to leave the lot, get down to the crowded and busy access road and saw I had time to beat a big flow that would stop at the light I was close to and I’d have to wait through a cycle at the least. Still, I had time in anything but my Pete so I went……or at least I meant to “went”. That sumbitch had exactly the same problem as all our Dodge pickups, what the boys in Hud would call a lack of communication. I’m there and the traffic is coming but all I have to do is just ease into it and accelerate, not even hard. So I let off the brake and was headed downhill when I hit the throttle and nothing happened. Oh come on you POS Dodge MF, go. Well, it finally did, and by the time it did I was pushing harder on the pedal(this is a normal reaction when about to be run over, never mind you’ve been here before). I’m not quite to the point of reliving my life when it decided it would obey but my foot was way down by that time so like a dummy fool looking sumbitch I left the rent car parking lot with squalling tires……finally.
I make a Texas Turnaround and am going back the opposite direction and trying to blend into the oncoming access road traffic going t’other way when it jerks and halts and does all sorts of joogly stuff.I finally get it to go the 45 mph sorta steadily even though it was, according to the digital readout, sweeping up from 2nd or 3rd to 9nth and all those gears in between. After getting to TxDOT and getting my phone from my wife I go to Wally to get some cash and buy beer. Getting back in at the parking lot I was 30 feet or so from the end where I’d need to turn around so I began to put my foot on the pedal “very gently, almost non-existently” and decided it was going to idle downhill fast enough I didn’t need any throttle. I’m sitting there with my foot off the go pedal when it goes BAM, hits acceleration hard and just as quickly, backs completely out. Well, that’s interesting. It did this all the way back over to Tx.DOT where I just missed my wife. Now I get out on the road and up to the 55 mph zone in town and things have settled a bit but when I got to the 75mph speed zone I put my foot in it, as Tina said “nice……and easy”. Well, it seems nice and easy ain’t in it’s vocabulary. So here i take off dropping down a plethora of gears and then back up that same plethora just trying to get up to speed on I-20.
Well, it was a bit loud and buzzy with plenty tire noise and some funny steering characteristics. I turned onto the back road for home and it wasn’t smooth or quiet and that steering still had some weird thing going on. I slowed down more on curves than I used to with my 4WD diesel pickup. I did romp on it and get to 120 at one time but it wasn’t exactly confidence inspiring with that steering.
Once at the house I told the wife she wasn’t going to like it. Oh, it’ll be fine she says. Ok, you’ll be driving and i’ve said my say.
Today I go to pick her up and arrive before she did. She pulled up beside me, jumped out fast for her and said Fuck this thing. I laughed. She started in on the throttle and then worked her way to the grindy sort of ride, the loud noise inside and the tires she didn’t like before I could utter a word. And then the clincher “you couldn’t give me this car”. That was the only thing I hadn’t said about it. I’d take it as a gift but would trade it for something else toot sweet.
I think we’d soon be down to a two car choice. She started watching the Secret Life of Walter Mitty and I had to laugh out loud when he wanted to know if there were a car to be rented in Iceland and the car rental guy replied “Yes, we have a blue one and a red one”….and indeed they did, identical cars except for color.
Well, they won’t be able to sell many new ones when they get the choice pared down like that.
Y’all will love this one. I had a 200 rental for a couple of days while waiting the word from VW on my dead DSG. The thing rode like it was on railroad tracks, or such. It seems some nimnull had read that the spare should be inflated to 50psi and decided that would be good for all the tires.
The one I rented had 41, 42, 43LF, and 40LR and still rode like it was riding on steel and sounded it too. The wife said “well, there ain’t no easing into it”. She said it was loud and crude, the same thing I said about it……but it would run like a scalded dog. The constant gear hunt was maddening in town though. It felt like an old car cutting out.
Ditto.
I rented a 200 last year & thought it was “turbo lag.”
Nope, the base 4 cylinder engine is just that slooowww….
Never again.
Bill, nothing slow about that car except the link between your foot and the wireless throttle. It drove just like that fleet of Dodge pickups we have. You never know when the engine will speed up from the time you put your foot in it…..if ever.
One day I was riding with the mechanic to his house where he’d get out and I’d go on. We rounded a corner, he got back into it and it just idled to a stop. WTF? he’s saying. I couldn’t believe he didn’t know. I told him to cycle the system 5 times, which he then did, and at which point it went on. That’s not too big a deal in that circumstance but I had a whole load of guys and was pulling a big trailer. Waiting to cross a really busy oil patch hiway and got my chance. It roared for a few seconds and then idled, leaving us in the road with 75 mph traffic bearing down on us. Reverse wouldn’t back us because of the loaded trailer so we were sitting there trying to be small and as far away from the doors as possible. All traffic from both directions screeched up to us and I finally got it to accelerate.
That was just the first time for me. You couldn’t give me a Dodge pickup just because of that. Seems like the Cummins are way worse than the gasoline for some reason.
Didn’t it run fine if you just floored it? This one did, just had the lag that would leave you in a bind in traffic and then the weird hunting for a gear and no getting it to go a steady speed w/o using the cruise…..which I didn’t want to do in town traffic as I was changing speed zones and about to need to gain 25mph to enter a bypass.
On the road it was fine on cruise if you didn’t mind all the road noise, the tires singing like crazy and feeling like hey had no rubber on the road, just steel belts. The accelerator made going around curves not so fun too.
As much as a damn car weighs these days lack of insulation is he ultimate sin. There’s no excuse for throttle response that bad.
Hi Bill,
“Slow” is relative. Yes, compared with a V6 sedan, the four cylinder 200 is “slow.” But it’s still quick enough to outrun almost any car out there, because most cars – including V6 sedans – are driven as if they had a gerbil wheel under the hood and a Faberge Egg under the accelerator pedal.
I’ve never had any problems out-running traffic in “slow” cars… but it’s traffic that’s slow.
Not so much the cars!
VW shareholders are now just like the former f***ed over common shareholders of GM and Chrysler.
Left out in the dark. The “rule of law” was not followed with GM and Chrysler, it will be the same with the VW bankruptcy too.
With this environment, who would even invest their hard earned money in any major (or minor) auto maker today? I wouldn’t touch any with a ten foot pole.
I think we may be missing an angle here. Government (not just the US) wants the auto industry a basket case and a welfare recipient. Toyota is in the cross hair too. Ford better watch its back. Then they can’t say no to any of the wacko ideas. Why don’t you think they all lined up to “volunteer” with the auto brakes?
I won’t be surprised when Volvo, Mitsubishi and some of the other littler companies give up on the US market. With the huge requirements to entry, and our quickly declining economy, it may be no longer worth the hassle.
When I was a kid my dad worked for Bethlehem Steel, Johnstown Works. This company had been around for over 100 years. They had red brick buildings that were over a mile long (imagine being a bricklayer building a wall a mile long and 4+ stories high), and blast furnaces bigger than McMansions. The EPA decided there was too much sulphur in the Stony Creek river, so they made Bethlehem install a water purification system. It didn’t matter to the EPA that the water was just used to quench steel, which doesn’t impart any sulphur into the river water (that was all due to runoff from abandoned mines), the plant was an easy target so that’s what they went after. Cost the company millions of dollars and didn’t do a thing to make the river any cleaner. But there was a real big fish tank at the G.O. (general office, where the bosses hung out when they went to “the plant”) with the biggest rainbow trout I’ve ever seen living in the filtered water -something that couldn’t happen upstream of the plant.
Of course, when Bethlehem and US Steel went to the State Department with evidence that they Japanese steel makers were getting subsidies from their government and therefore selling steel below market price, Uncle failed to act on the treaty violation. The Japanese were the biggest buyer of US treasury bonds at the time, but I’m sure that’s just a coincidence…
Missed the punchline… The water purification system was sited as one of the reasons the company went bankrupt. Not right away of course, but when there’s such a big increase in expense it can be a shock to the company that can’t be absorbed easily, especially when your competitors get free life support from their Uncles.
There’s a “March on DC” being planned on FB…
I’m sure I’m going to get banned by them when I point out the only REAL solution is Vi0L3n7 In$urr3C710n.
But shit like that? It shows that Atlas didn’t shrug soon enough, and Gunvermin works as planned… Screw the People, we got ours.
So, Rope + politician + lamp post, some assembly required. Lay the foundation for a new stab, at least…
Steel only has trace amounts of sulfur in it to begin with and it’s not going to leach out in quenching. It would have probably been cheaper to just build a huge water tank and circulating pump with a big heat exchanger in the river than to filter the water. This would have made the steel plant’s quenching water entirely separated from the river. They would never touch unless the heat exchanger sprung a leak. With good design and proper materials and inspection that probability could be reduced to almost zero.
The river isn’t big enough to be a stand alone heat sink. But either way it put a very heavy burden on the plant’s profitability.
The only reason to intake river water and discharge it would be to release heat. The heat would have a bigger effect* on the environment than any elements that might be transferred between hot steel and water.
*this could be good or bad and most likely good especially in winter. Most living things prefer to be warmer rather than colder. Even cold dwelling creatures.
About 15 years ago West Texas Utilities(no longer exists)had natgas fired generators on many lakes in Texas. They used the lake water to cool them. The warm water that flowed out made great winter crappie and bass fishing. It made the fish grow faster too.
Once ONCOR bought them, they were all torn down and replaced with Mr. Peabody’s coal mine at the Okla-Union power plant in Ok. So much for clean natgas power.
Yeah, I used to go by one of those on my way to work the 1st 4 years I lived down there. Carrollton, now a ‘suburb’ of DFW Airport.
We’re talking absolute power…
I doubt such an option was even permitted, because some queer geek with Asperger’s thought THIS was THE way to go… (probably paying off someone he owed a favor… Make the filtration company’s stock go up, look “tough on crime”, err, pollution. GREEN… Watermelon, in reality.)
Letting them live was bad enough; you’re letting them BREED and OVERWHELM you. Hard to have sympathy, ya know? We HAD a solution years back, now the population is diluted in word, mind, and deed, and incompetent to boot…
UAW lost the Union Vote of the Tennessee VW Plant in 2014 and this is just one of the pro-union/pro-collectivism Progressive/Liberal/Democrat retaliation steps to that embarrassing defeat.
The Passat TDI was being built in the Tennessee plant, and they had announced in July-2014 that they were to start production of the new VW mid-sized SUV “CrossBlue” starting in 2016 and was expected to add another 2,000 non-UAW workers to the facility which already has 13,000 employees.
Germany is the world leader in car sharing, by a large margin. There’s over 150 different vendors. But the time and cost in getting rid of the shared car. That is still the Scheiße im Eis.
http://www.sueddeutsche.de/auto/deutschland-weltmeister-im-teilen-1.2924144
“It’s what he does.”
More than that, it’s who he is.
This kid gets it
https://www.youtube.com/watch?v=6KPRp3aLZ2Q
Listen, and understand! That Governator is out there! It can’t be bargained with. It can’t be reasoned with It doesn’t feel pity, or remorse, or fear. And it absolutely will not stop, ever, until your freedom is dead.
The Governator will never stop, ever
https://www.youtube.com/watch?v=PAswVl_KZVU
Former State of California Governator visits some a local precinct of Governators. Pointless Berserker Destructors, all.
https://www.youtube.com/watch?v=DPt5mRAKTkM
Big Uncle and 44th Founding Father Triumphantly Posing In Front of a Che Guevera Doodle in Cuba
https://ca.usembassy.gov/wp-content/uploads/sites/27/2016/03/AP_28381579176-1140×530.jpg
If only we each knew some combination of words that triggered some algorithm of action that bring order to such seemingly unsolvable chaos
http://www.mathplayground.com/rubikscube.html
There are seven and a half billion people who are each have their own ways of destroying order and returning things to a state of chaos. Of how much value is studying the ways in which they induce said chaos?
Is it not of more value to become one of the few who can tame and even reverse said chaos. Who can solve any puzzle, whether virtual, or a malfunctioning piece of machinery in need of a few algorithms to be brought back into smoothly running order?