VOW.DU - VOLKSWAGEN AG ST O.N.

Dusseldorf - Dusseldorf Delayed price. Currency in EUR
175.70
+1.05 (+0.60%)
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Open174.50
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Day's range173.80 - 175.90
52-week range135.30 - 181.95
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Avg. volume8
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  • Volkswagen headquarters raided again over diesel scandal
    Reuters

    Volkswagen headquarters raided again over diesel scandal

    German public prosecutors raided the Wolfsburg headquarters of Volkswagen on Tuesday in the latest investigation into the carmaker's diesel emissions scandal. Volkswagen, which admitted in 2015 to cheating U.S. emissions tests on diesel engines, said it was fully cooperating with the authorities, but viewed the investigation as unfounded. Volkswagen said the raids were linked to an investigation into diesel cars with engine type EA 288, a successor model to the EA 189 which was at the heart of the test cheating scandal.

  • Bloomberg

    VW Accused of Deceit in U.K.’s Largest Class Action Lawsuit

    (Bloomberg) -- Volkswagen AG is facing one of the largest-ever U.K. class action lawsuits, with almost 100,000 vehicle owners accusing it of misleading them by installing emissions-cheating software that made it appear their diesel vehicles met environmental standards.Lawyers for the drivers opened their case Monday, and must first prove that the allegations belong in court. They need judges to follow findings by regulators that led to vehicle recalls, and to rule that the software is a so-called defeat device that’s banned under European law. Then the case would proceed to another trial to decide whether the owners lost anything from buying the vehicles.The automaker has faced numerous lawsuits after the use of the software designed to lower emissions when being tested was exposed by a U.S. probe in 2015. That led to a recall throughout Europe that cost the company 29 billion euros ($32 billion). Regulators in the Netherlands and Italy have fined VW for use of the software, while a German probe last year fined the carmaker 1 billion euros.In its court filing, VW says that the law only prohibits devices that reduce the effectiveness of pollution control systems and not those, like the software, which enhance them. According to the driver’s lawyers, that argument is an abuse of the intention of the law.“The defendants’ case results in an understanding of the defeat device that is entirely divorced from the emissions test and the emissions limits,” Tom De La Mare, an attorney for the drivers, said in court. “It’s aimed at legitimizing the total subversion of the emission regime.”In his submissions, De La Mare pointed to an diagram from an internal VW document, showing how the software made the vehicle sacrifice its fuel consumption, driveability and engine noise when under testing, in order to dip beneath the legal limit on pollutants.A spokesman for Volkswagen said that the drivers didn’t suffer any losses and that the vehicles didn’t use prohibited defeat devices. The company also disputes the number of claimants involved in the class action, saying it’s closer to 85,000.Gareth Pope, a lawyer from Slater and Gordon representing the drivers, said in a statement that VW had perpetrated an “environmental scandal” and had spent “millions of pounds denying the claims our clients bring.”Many similar cases are proceeding in German courts, including a group action that involves thousands of Volkswagen drivers. They argue that they faced their vehicles being banned from the road and suffered losses as the resale value of their cars declined. Those cases hinge on whether the fact that a software update that made the cars legal to use invalidates the claim.VW in Germany has for years argued that the software used here was legal. That argument was tossed by Germany’s top civil court in February in a rare a rebuke of VW’s position.An earlier version of this story was corrected to reference to regulator fine in third paragraph.(Updates with detail on software in seventh paragraph)\--With assistance from Karin Matussek.To contact the reporter on this story: Eddie Spence in London at espence11@bloomberg.netTo contact the editors responsible for this story: Anthony Aarons at aaarons@bloomberg.net, Christopher Elser, Peter ChapmanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • British VW drivers launch 'dieselgate' case in High Court
    Reuters

    British VW drivers launch 'dieselgate' case in High Court

    Tens of thousands of British drivers on Monday accused Volkswagen of fitting devices to cheat clean air laws at the start of the country's biggest class action lawsuit brought to tackle "dieselgate". Volkswagen has said about 11 million cars worldwide - and 1.2 million in Britain - were fitted with software that cheated diesel emissions tests designed to limit noxious car fumes and carbon dioxide (CO2) pollution. A hearing at the High Court is set to last for two weeks.

  • Germany's Car Jobs Boom Comes to a Screeching Halt
    Bloomberg

    Germany's Car Jobs Boom Comes to a Screeching Halt

    (Bloomberg Opinion) -- After a week in which Daimler AG and Volkswagen AG’s Audi announced thousands of job cuts, it’s easy to forget that the German car industry once seemed unassailable.The 2009 recession forced a massive downsizing of America’s auto giants. General Motors Co. and Chrysler filed for Chapter 11 bankruptcy protection; Ford Motor Co. escaped a similar fate only by cutting its workforce to the bone. By contrast, Volkswagen, BMW AG and Daimler’s Mercedes-Benz overcame the crisis with barely a scratch. Afterwards they took full advantage as wealthy Chinese splurged on luxury German vehicles. Germany’s carmakers and their suppliers went on a hiring spree at home and abroad.There were early signs of hubris: Volkswagen paid its chief executive officer 17.5 million euros ($19.3 million) in 2011. But Germany’s powerful trade unions made sure workers benefited too. In recent years production line staff at BMW and VW’s Porsche subsidiary took home almost 10,000 euros as an annual bonus. BMW spends an average of more than 100,000 euros per employee on salary, pension and social security costs, according to its annual report. Now that jobs boom has come to a screeching halt, and not before time. An industry facing unprecedented upheaval can’t afford such largess.The chief reason for the belt-tightening is, of course, the vast cost of moving beyond combustion engines. Volkswagen expects to spend an astonishing 60 billion euros on hybrid, electric and digital technology in the next five years. Doing this requires the hiring of even more people, but the products they’re developing aren’t always big money spinners yet.For a time, the industry will have to provide a full range of propulsion options. For their factories this means “peak complexity” — to borrow a phrase from Mercedes’s management. Eventually, however, many of these factory workers will become unnecessary because electric motors are much simpler to build than diesel and gasoline engines. Last week's job cuts won’t be the last.The German industry has been caught out too by an unexpected slowdown in demand. Continental AG, the supplier that’s cutting 20,000 jobs, expects production to stagnate over the next five years. Daimler said last month that sales haven’t matched its production capacity. Audi’s domestic plants are reportedly particularly under-utilized, not helped by the popularity of SUVs over sedans (the former tend to be built overseas).Volkswagen, BMW and Daimler will still generate about 24 billion euros of net profit this year, according to analysts polled by Bloomberg. But the era of 10% operating profit margins — long a benchmark for German luxury carmakers — is over. Mercedes thinks 4% is more realistic next year.The automakers therefore have to tackle their bloated fixed costs. In view of its spending commitments, Volkswagen was unwise to let its workforce swell to almost 700,000. That’s about 80% more than Japan’s Toyota Motor Corp., which builds a similar number of cars (though Volkswagen has a big truck unit too).Volkswagen’s labor expenses have crept higher as a percentage of sales since the last recession. Doubtless this reflects the influence of the German unions and hence it’ll be very difficult to rectify. Like their peers, German employees at the Volkswagen brand have job guarantees until 2029.Ultimately the German car jobs boom was a bet that demand would increase, combustion engines would have a long life and global trade would remain encumbered. Instead, the electric shift is happening faster than expected and Trump’s tariff crusades have turned the German industry’s global production presence into a liability.Cars are superfluous for many young people today, and if they do buy one it will soon have a simple electric motor, not a combustion engine made of hundreds of intricate components. The hiring practices of German carmakers look like a bubble that’s burst.To contact the author of this story: Chris Bryant at cbryant32@bloomberg.netTo contact the editor responsible for this story: James Boxell at jboxell@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Bryant is a Bloomberg Opinion columnist covering industrial companies. He previously worked for the Financial Times.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • Audi to Cut 9,500 German Jobs in Switch to Electrification
    Bloomberg

    Audi to Cut 9,500 German Jobs in Switch to Electrification

    (Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.Audi plans to eliminate roughly 15% of its German workforce to lift earnings by 6 billion euros ($6.6 billion) as Volkswagen AG’s largest profit maker pushes ahead with a restructuring plan to help adapt to the costly transition to electric cars.The turnaround is aimed at regaining ground lost to luxury-car leaders Mercedes-Benz and BMW AG and counter pressure from Tesla Inc. Volkswagen has been scrambling to revive Audi’s fortunes after turmoil sparked by the aftermath of the 2015 diesel-cheating scandal.By 2025, Audi plans to cut as many as 9,500 jobs in Germany and streamline operations at its two main factories in its home country. The positions will be reduced through attrition and voluntary measures including early retirement, Audi said in a statement Tuesday after reaching an agreement with employee representatives.The approximately 50,000 remaining employees in Germany will have job guarantees through 2029, and Audi will create 2,000 new jobs to strengthen its engineering muscle for electric cars and digital offerings.“We are now tackling structural issues in order to prepare Audi for the challenges ahead,” Chief Executive Officer Bram Schot said in the statement. “In times of upheaval, we are making Audi more agile and more efficient.”Management ShakeupTalks with labor unions on the job cuts had dragged on for months, and Volkswagen appointed former BMW executive Markus Duesmann, 50, as the brand’s new chief starting in April to advance the process. He will replace Schot, who succeeded Rupert Stadler after his arrest in connection with the diesel crisis.“VW group has embarked on a potentially significant reorganization of its activities,” Timm Schulze-Melander, Redburn industry specialist, said in a note. “Things may not move in a straight-line, but progress is expected by investors given the significant challenges in 2021 in Europe.”VW shares fell as much as 0.8% in Frankfurt trading, paring gains for the year to 27%.Complying with tighter European emissions rules requires significant investment, while trade wars and uncertainty related to Brexit fallout adds to the complexity of managing the disruptive technology shift.Audi has been wrestling with stricter emission-test procedures that took effect in Europe last year and led to significant production bottlenecks that bogged down deliveries.Electric ExpansionThe world’s third-largest luxury-car brand has been pushing for a fresh start with a review of its product range, which led to the decision to halt the TT coupe. The former design icon will be replaced with a battery-powered model.To revive momentum, Audi will launch five fully-electric and seven plug-in hybrid models within two years and broaden the lineup to more than 30 electrified cars by 2025. But the transition will be costly after higher spending on electric models like the E-Tron contributed to returns last year dropping to 6% from 7.8%.Audi produces the E-Tron at its factory in Brussels. It will add electric-car production at its two main German factories in Ingolstadt and Neckarsulm as well as part of the labor pact to ensure sufficient output.Audi targets slightly higher deliveries and revenue this year, and an operating profit margin between 7% and 8.5%. The cost-cuts are aimed it lifting margins back to a range of 9% to 11%. Audi didn’t specify whether it can reach the goal next year as planned.(Adds analyst comment in seventh paragraph)To contact the reporter on this story: Christoph Rauwald in Frankfurt at crauwald@bloomberg.netTo contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, Chris Reiter, Tara PatelFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Electric Cars Racing at 170 MPH Are Test Labs for SUVs
    Bloomberg

    Electric Cars Racing at 170 MPH Are Test Labs for SUVs

    (Bloomberg) -- Not every advance in electric-vehicle technology takes place inside the sterile calm of a research laboratory.BMW AG, Volkswagen AG’s Audi and a Silicon Valley-based battery maker are helping push the boundaries by racing electric-powered cars through Saudi Arabia, New York, London and Seoul at speeds topping 170 mph.Breakthroughs made by competitors in Formula E, which started its sixth season over the weekend, are being incorporated into family SUVs and sedans –- and even India’s electric rickshaws -- as manufacturers seek to improve and extend their electric lineups while nations gradually phase out gas guzzlers. More powerful batteries and better motors, energy-management software and braking systems are all being transferred from the racetrack to the showroom.“What we are doing in Formula E is highly relevant back on the road,” said Dilbagh Gill, chief executive officer and team principal of India’s Mahindra Racing, the motorsport unit of Mahindra & Mahindra Ltd. “We are able to come in and help them immediately in improving the product.”Formula E, which began in 2014 with an “E-Prix” in Beijing, has 12 teams, almost all of which involve automakers producing or developing battery-powered vehicles for consumers – such as Nissan Motor Co. and Tata Motors Ltd.’s Jaguar brand.Volkswagen’s Porsche and Daimler AG’s Mercedes-Benz brand are new participants in the 14-race season that opened Friday in Saudi Arabia. The schedule runs through July, concluding with the two-day London E-Prix.Briton Alexander Sims, racing with BMW i Andretti Motorsport, won Saturday’s race on the outskirts of the Saudi capital, Riyadh. Envision Virgin Racing’s Sam Bird won Friday’s opening race.Last season’s champion was DS Techeetah, the Chinese-owned team of PSA Group’s DS Automobiles. Its DS E-Tense FE20 machine can accelerate from zero to 100 kph (62 mph) in 2.8 seconds.DS Automobiles is taking the powertrain –- parts including the motor and inverter -– from its Formula E entry and putting it inside a concept car called the DS X E-Tense. It also will use the same operating software across its planned range of electric passenger vehicles.PSA Group, also home to the Peugeot and Citroen brands, is targeting a fully electrified fleet by 2025.“The cars that win in Formula E are the most energy efficient, which is largely driven by software,” Paris-based DS Automobiles said. “Everything we do in Formula E with algorithms and software we try to replicate in series production.”Rules intended to limit costs for teams and keep the series competitive mean racers use a standardized lithium-ion battery manufactured by a unit of Newark, California-based Lucid Motors Inc.During the first four seasons of Formula E, drivers needed to change cars in the middle of a race -- leaping from one cockpit into another -- because the power packs couldn’t complete a whole event, which typically lasts about 45 minutes.Lucid’s batteries, introduced last season, eliminate the need for that switch.“The real reason we are doing this is to demonstrate that we have world-class technology, which will find its way into our forthcoming road car,” said Chief Executive Officer Peter Rawlinson, previously chief engineer of Tesla Inc.’s Model S.The company plans to start producing its Lucid Air sedan in Arizona next year, boasting of a range topping 400 miles and a speed exceeding 200 mph.Lucid’s Formula E batteries pack in more energy than alternatives that are commercially available for regular cars, said James Frith, a London-based analyst for BloombergNEF.“If Lucid can transfer this technology to commercial electric vehicles, it could give them a real advantage,” he said.Another key focus for Mahindra, DS Techeetah, Audi and the others is finding the best way to slow a car down.Since most vehicles lose energy as heat when a driver hits the brakes and causes friction, electric race cars use regenerative braking systems. In effect, a car’s motor goes into reverse to both slow the wheels and act as a generator to send power back into the battery.The technology helps to boost driving range, meaning passenger cars could use smaller batteries, said Allan McNish, team principal of Audi Sport ABT Schaeffler.“Regenerating energy is going to be a key factor for the development of road cars,” said McNish, an ex-Formula 1 driver and a three-time winner of the 24 Hours of Le Mans endurance race.For Nissan, the technology transfer goes both ways, Azusa Momose, a spokeswoman, said. Racing engineers working with the Nissan e.dams team are drawing on the company’s experience developing the electric Leaf hatchback.“They share the same DNA,” Momose said in an email. Formula E cars are at the leading edge of energy management and powertrain development, she said.Yet not all the gains are connected with technology or software.Mumbai-based Mahindra will share racers’ cockpit tips with India’s auto rickshaw drivers to help them extend their battery’s range between refills. India is home to about 1.5 million battery-powered, three-wheeled rickshaws. Mahindra is among the manufacturers of electric versions.“As soon as they improve range, their earning capacity improves,” Gill said.Putting high-speed EVs onto circuits using regular city streets is considered another major benefit to the racing series, lifting the profile of the battery-powered sector in key consumer markets. Formula E races last season drew more than 400,000 spectators and a cumulative TV audience of 411 million people, the series said in September.Last season’s racers zipped along Brooklyn’s Clinton Wharf and Hong Kong’s Victoria Harbour. This season, competitors will loop around the National Monument in Jakarta, and, in the U.K., teams will tackle a circuit that weaves inside the ExCeL London exhibition center and then back outside onto the city’s Royal Docks.“You are racing in the heart of cities, and that’s where electric vehicles will be driven,” McNish said. “You are effectively taking your product to the people.”\--With assistance from Ed Ludlow and Tsuyoshi Inajima.To contact the reporter on this story: David Stringer in Melbourne at dstringer3@bloomberg.netTo contact the editors responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net, Michael Tighe, Will DaviesFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • VW says arena must cover German carmaker's name during far-right event
    Reuters

    VW says arena must cover German carmaker's name during far-right event

    Volkswagen has told a sports arena in western Germany to cover up the carmaker's name when the far-right Alternative for Germany (AfD) party holds an event there. The AfD is holding a national congress at the Volkswagen Halle arena in the city of Brunswick on Nov. 30-Dec.1. A spokesman for VW's works council said the lettering at the stadium spelling out Volkswagen must be covered as the carmaker wants to distance itself from a party that promotes an "ethnic, nationalist" agenda that goes against the company's values.

  • VW sees mild growth for China auto market over next three to four years
    Reuters

    VW sees mild growth for China auto market over next three to four years

    GUANGZHOU, China/SHANGHAI (Reuters) - Volkswagen AG , the top foreign automaker in China, said on Thursday it expects the world's biggest passenger car market to stabilize next year with low growth levels likely for three to four years. Hit by a slowing economy, the U.S.-China trade war and chaotic implementation of new emission rules, China's vehicle sales are expected to slide some 8% this year after a 2.8% fall last year to 28.1 million - the first decline since the 1990s. "Next year we predict a stable total market environment, maybe moderate small growth," VW Group China CEO Stephan Woellenstein told Reuters at the Guangzhou autoshow.

  • FCC Spectrum Proposal Spotlights Automaker Technological Divide
    Bloomberg

    FCC Spectrum Proposal Spotlights Automaker Technological Divide

    (Bloomberg) -- U.S. Federal Communications Commission Chairman Ajit Pai proposed reallocating to mobile devices airwaves long assigned to vehicle safety while preserving some of the spectrum for carmakers planning to deploy new technology.“We want to move on from something we’ve tried for a long time that wasn’t working, and open the door to new and exciting opportunities,” Pai said in a speech at a Washington event. “After 20 years of seeing these prime airwaves go largely unused, the time has come for the FCC to take a fresh look.”Auto industry reaction highlighted a division between companies such as Toyota Motor Corp. that have already invested in the old technology and a growing number of others, including Ford Motor Co., that back the newer system that they say performs better.Pai set a Dec. 12 vote on his proposal, which would commence a months-long comment period on giving Wi-Fi gadgets access to 60% of the airwaves reserved for auto safety in 1999. Automakers would retain use of the remainder.The change wouldn’t be final until another vote by the FCC, which under Pai has worked to free airwaves bands for new uses. Because Pai leads a Republican majority, his proposals usually pass.In 1999, the frequencies were reserved by the FCC to link cars, roadside beacons and traffic lights into a seamless wireless communication web to help avoid collisions and alert drivers to road hazards, among other uses.In a concession to carmakers, Pai’s plan would devote most of their remaining portion of the spectrum to the new cellular-based safety technology that several have recently embraced. A thin remaining slice would be used for either the new system or for an older accident-avoidance technology foreseen two decades ago but is little used today.Ford announced earlier this year that it would outfit all its new U.S. models starting in 2022 with newer cellular vehicle-to-everything technology. Toyota, meanwhile, halted in April plans to deploy the older systems in 2021 citing dwindling support from regulators and other carmakers.However, Toyota said in a statement on Wednesday that it remains committed to the older technology and that the entire spectrum band currently allocated for auto safety should remain available to them.General Motors Co. deferred comment to the Alliance of Automobile Manufacturers, which, along with several groups, including the American Automobile Association, urged caution.‘Harmful Interference’The groups issued a joint statement asking the FCC to refrain from sharing the frequencies with non-safety devices “until test results clearly indicate that sharing with unlicensed devices can occur without harmful interference.”The U.S. Transportation Department said it hadn’t changed its position that the entire airwaves swath needs to be retained for auto safety. The government has spent hundreds of millions on the older, competing technology called dedicated short-range communications.“We’re hoping to preserve that 75 megahertz because it is now time, the technology is now there, that we can start deploying this potentially life-saving technology,” James Owens, acting administrator of the National Highway Traffic Safety Administration, said in a Senate hearing.The 5G Automotive Association, a group that backs the new cellular safety system, applauded Pai’s proposal.Public Safety“Extensive crash avoidance testing continues to demonstrate that C-V2X technology will deliver safety benefits to the American public,” said the group. It represents most major automakers including Ford Motor Co., Volkswagen AG and Honda Motor Co., in addition to wireless companies such as Verizon Communications Inc. and gear makers Samsung Electronics Co. and Qualcomm Inc.“This visionary FCC proposal will enable us to bring the tremendous, unmatched safety benefits from C-V2X to US drivers, passengers, and pedestrians,” Dean Brenner, Qualcomm’s senior vice president of spectrum strategy and technology, said in a statement.The Intelligent Transportation Society of America, an advocacy group with members including GM and several states that have deployed safety equipment that works off the older technology said the “FCC is prepared to trade safer roads for more connectivity.”“In a country that reels from nearly 36,000 roadway deaths every year, it is unfathomable that the United States would literally give away our top safety tool -- and with it, our best chance to save tens of thousands of lives,” ITS America president Shailen Bhatt said in the group’s emailed statement.Cable providers that offer Wi-Fi for customers’ wireless use welcomed Pai’s move. Charter Communications Inc. said it was “thrilled” and Comcast Corp. said the “spectrum is too valuable a national resource to lie fallow any longer.”The airwaves could be used for fast communications including machine-to-machine links, and smart city applications such as smart cameras, traffic monitoring and security sensors, NCTA-The Internet & Television Association, a trade group for companies including Comcast and Charter the FCC in a Sept. 25 filing.\--With assistance from Keith Naughton.To contact the reporters on this story: Todd Shields in Washington at tshields3@bloomberg.net;Ryan Beene in Washington at rbeene@bloomberg.netTo contact the editors responsible for this story: Jon Morgan at jmorgan97@bloomberg.net, John Harney, Todd ShieldsFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • VW’s CEO Says Germany Would Be Better Home for Tesla Car-Making Than California
    Bloomberg

    VW’s CEO Says Germany Would Be Better Home for Tesla Car-Making Than California

    (Bloomberg) -- Volkswagen AG’s chief executive officer, who’s grown increasingly chummy with Tesla Inc.’s Elon Musk, said the electric-vehicle maker may find Germany a more accommodating place for manufacturing than its home state of California.“What Tesla probably is looking for is the environment, the infrastructure, to build high-quality cars, which is probably much more the case here in Germany than on the West Coast of the United States,” VW CEO Herbert Diess told analysts and investors on a call Monday. Musk announced last week that Tesla will build a vehicle and battery factory on the outskirts of Berlin, plus an engineering and design center within the city limits. While the plant will be the second to assemble Teslas outside the U.S. -- one near Shanghai is on the verge of making cars for sale -- the company’s massive facility in Fremont, California, isn’t going anywhere. Preparations are underway for Model Y crossover production to start next summer.Tesla hasn’t yet said where it will build a new electric pickup that Musk, 48, plans to unveil in Los Angeles later this week.\--With assistance from Christoph Rauwald.To contact the reporter on this story: Craig Trudell in New York at ctrudell1@bloomberg.netTo contact the editors responsible for this story: Craig Trudell at ctrudell1@bloomberg.net, Chester DawsonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • VW rejects anti-competitive allegation by parts maker Prevent
    Reuters

    VW rejects anti-competitive allegation by parts maker Prevent

    The lawsuit said that Volkswagen had extracted written agreements from suppliers not to sell to Prevent, which amounted to anti-competitive behaviour. Prevent said it a statement it was seeking damages in excess of $750 million, alleging Volkswagen used its market power to squeeze smaller suppliers who had to comply with "unfair terms and prices" or face bankruptcy. In 2016 https://reut.rs/2OnW5fN, Volkswagen and two of its suppliers, one which was part of Prevent, resolved a contract dispute that had hit output at more than half of the automaker's German plants.

  • Volkswagen cuts profit, sales forecasts as autos downturn bites
    Reuters

    Volkswagen cuts profit, sales forecasts as autos downturn bites

    German carmaker Volkswagen cut its forecasts for operating profit and sales growth on Monday due to a downturn in demand for passenger cars, while keeping profit margin targets. "It is fair to say that the very best of the party is over," Chief Financial Officer Frank Witter told analysts in a call to discuss the company's outlook. Volkswagen joins a string of automakers and suppliers including Ford and Continental in warning of tough times for an industry facing higher investments into cleaner and self-driving technologies at a time when a trade war between Washington and Beijing is curbing global growth.

  • Volkswagen CEO says new ID.3 car 40% cheaper to build than electric Golf
    Reuters

    Volkswagen CEO says new ID.3 car 40% cheaper to build than electric Golf

    Volkswagen's new ID.3 electric vehicle will be 40% cheaper to build than the electric version of its Golf model, Chief Executive Herbert Diess told investors on Monday. The battery in the new ID.3 can be used to add structural rigidity to the body and the modular layout of the battery allows for advantages in packaging and economies of scale. "If you focus on an electric platform, all in all it accounts for a 40% reduction against the predecessor electric Golf," Diess said.

  • Autonomous Taxis Become a Rough Ride for Europe
    Bloomberg

    Autonomous Taxis Become a Rough Ride for Europe

    (Bloomberg Opinion) -- As recently as March, Daimler AG, the German carmaker, promised to put 10,000 autonomous taxis on the streets by 2021. But this week, Daimler chairman Ola Kaellenius announced that the company was taking a “reality check” on the project and focusing on self-driving long-haul trucks instead. It’s fine that self-driving cabs aren’t coming as fast as some expected — and it’s even better that Silicon Valley-style big talk appears to be going out of fashion.Kaellenius’s “reality check” has some solid business reasons: Daimler is cutting costs and can’t commit to a large, capital-intensive project without a clear idea of what kind of first-mover advantage it might confer. But mostly, it comes because of a long-obvious technical problem. Making sure self-driving cars aren’t a menace in city traffic is a job that’ll take more than a couple of years. Investigators are still trying to get to the bottom of the March 2018 accident in which a driverless Uber killed a pedestrian in Tempe, Arizona, and it appears Uber Inc.’s cars had been involved in dozens of previous nonfatal incidents in the course of the same testing program. No one wants to be in the same situation as Uber — so General Motors Co. subsidiary Cruise won’t be launching self-driving taxis in San Francisco this year, as previously promised, and maybe not next year, either. There's been lots of news stories about Waymo Llc, an Alphabet Inc. subsidiary, launching a self-driving taxi service in Arizona, and in April, it even put an app for it on the Google Play store. But in September, Morgan Stanley lowered Waymo’s valuation because of delays in the commercial use of its technology, and last month, Waymo chief executive John Krafcik said driverless delivery trucks could come before a taxi service.For European carmakers, which have to deal with older cities not laid out on a grid, launching autonomous taxi services appears even more daunting than for Americans. They know it’s a long way from Tempe to Amsterdam or Rome. That’s one reason Volkswagen AG, a latecomer to self-driving development, isn’t worried about being overtaken. Alexander Hitzinger, chief executive of Volkswagen’s autonomous-vehicle subsidiary, said in a recent interview that even an industry pioneer such as Waymo was “a long way away from commercializing the technology” and that Volkswagen’s autonomous vehicles would be developed by the mid-2020s.That time frame may be no more realistic than the previous hype about big 2019 and 2020 launches. Autonomous car developers can complain all they want about unpredictable human drivers and pedestrians who are causing all the accidents with their flawlessly superhuman creations, but nobody is going to clear the cities of people to give self-driving cars a spotless safety record. And making sure that, after millions of hours of training, artificial intelligence is finally able to drive like a human after a few hundred hours on the road, is not all that’s required for robotaxis to be viable. There's still the whole matter of figuring out how to reduce rather than increase urban congestion by using cars that don't “think” like humans.It’s also dangerous to adopt any kind of specific framework for the launch of automated truck services, even though that’s an easier project than taxis because the routes are fixed. The presence of humans in what is still a predominantly human world has rather unpredictable consequences for robot behavior. And the first movers have an obvious disadvantage: Like Uber with a taxi, they can get burned in ways that could set the whole business back years, and the earnings potential is unclear.None of this means, of course, that self-driving development has failed or even hit a dead end. Given enough time and a few technological breakthroughs, autonomous vehicles will be safe around actual people in actual winding, narrow, crowded streets. Engineering challenges exist to be overcome. The problem isn’t with the tech, which is moving along at a reasonably rapid pace, but with how that progress is communicated.Nobody forced experienced managers at venerable companies such as Daimler or GM to make overly optimistic statements about self-driving taxi launches. Waymo is a cash-burning startup, and it’s difficult to hold it responsible for getting ahead of itself. But the adults in the room look silly for having tried to play catch-up. There’s no reason for the big car companies to make any promises on self-driving at all. Unlike with vehicle electrification, which is part of many countries' climate policies, there’s no regulatory pressure to eliminate human drivers. And autonomous mobility-related business models are purely theoretical at this point.It would be enough for companies involved in autonomous car development to say they’re working on it. Pretty much all the big players are, to some extent. The time for any other kind of announcement will come when someone is really ready to launch a commercial service, whenever that may be. No rush.To contact the author of this story: Leonid Bershidsky at lbershidsky@bloomberg.netTo contact the editor responsible for this story: Tobin Harshaw at tharshaw@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Leonid Bershidsky is Bloomberg Opinion's Europe columnist. He was the founding editor of the Russian business daily Vedomosti and founded the opinion website Slon.ru.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • Bloomberg

    VW Challenges Rivals With $66 Billion for Electric Car Era

    (Bloomberg) -- Volkswagen AG will ramp up spending on electric vehicles, automated driving and other new technology by 36% as the world’s largest automaker challenges rivals to keep pace with an aggressive shift into the post-combustion era.The new five-year budget for investment in hybridization, electric mobility and digitalization totals 60 billion euros ($66 billion), compared with 44 billion euros previously, the Wolfsburg-based manufacturer said Friday. The spending amounts to 12 billion euros a year.“We are resolutely pressing ahead with the transformation of the Volkswagen Group and focusing our investments on the future of mobility,” Chairman Hans Dieter Poetsch said in a statement after the supervisory board approved the plan.The sharp increase in spending after just one year reflects the increasing pressure on automakers amid the disruptive technology shift and the strains to meet increasingly stringent pollution regulations. Slowing markets make financing the investment tougher.“The idea of growing out of problems only grows the problem,” Arndt Ellinghorst, a London-based analyst with Evercore ISI, said in a note. VW’s approach is a contrast to “peers who are tightening their belts in light of tougher end markets and increasing variable costs.”Volkswagen lowered its global vehicle delivery forecast last month as demand waned in key markets including China, its biggest sales region. The manufacturer had reduced output plans by 900,000 cars and is prepared to cut further to avoid bloated inventories.“In light of the worsening economic situation, we are also working on increasing our productivity, our efficiency and our cost base,” Chief Executive Officer Herbert Diess said in the statement. “We intend to take advantage of economies of scale and achieve maximum synergies.”Looking ahead, 2020 is shaping up to be “an extremely challenging year,” Diess said at a later press conference, adding that VW’s financial targets can still be reached.These include reaching an operating profit margin of between 6.5% and 7.5% excluding special items and net cash flow of at least 10 billion euros. Diess will host a briefing for analysts and investors on Monday morning.Volkswagen shares close 1.3% higher in Frankfurt, boosting gains for the year to 31% and valuing the company at 91 billion euros.The German auto giant has been under pressure since the 2015 emissions-cheating scandal. The aftershocks continued Friday, with the company naming Markus Duesmann as head of the Audi brand. He will replace Bram Schot, who took over following the arrest of Rupert Stadler amid an ongoing German investigation into Audi’s past rigging of diesel-engine software.Since the diesel crisis, Volkswagen has accelerated its development of electric cars. The spending budget includes a 10% increase in investment for battery-powered vehicles to 33 billion euros.Tesla Inc. added urgency this week by announcing plans to build a factory on VW’s home turf. Diess welcomed the investment and said Tesla’s speed and agility in developing technology provides a role model for VW.Through 2029, Volkswagen plans to introduce as many as 75 all-electric models, up from a previous forecast of about 70. The company now expects to produce about 26 million e-vehicles over the next 10 years, compared with an earlier target of 22 million.German rival Daimler AG warned this week that there’s no quick fix to reviving profit margins while making the costly switch to electric and self-driving cars. The company’s new CEO laid out a plan to cut jobs and cap development spending.“We will step up the pace again in the coming years with our investments,” said Diess. “Hybridization, electrification and digitalization of our fleet are becoming an increasingly important area of focus.”(Updates with CEO comments from eighth paragraph.)\--With assistance from Chiara Remondini.To contact the reporter on this story: Christoph Rauwald in Frankfurt at crauwald@bloomberg.netTo contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, Chris Reiter, Tara PatelFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Revive the Middle Class by Bringing Back Unions
    Bloomberg

    Revive the Middle Class by Bringing Back Unions

    (Bloomberg Opinion) -- If the U.S. is going to make a big dent in income inequality and raise living standards for the middle class, it’s going to need a multipronged approach. Higher taxes and more spending on health care will help. Minimum-wage laws can raise pay for workers at the bottom without reducing employment much, but they only benefit a relatively small slice of the workforce. But something else is needed.One big idea is to bring back unions and collective bargaining. Several teams of economists have examined the historical record and concluded that unions were important in reducing inequality. But although unions are still important in the public sector, in the private sector they’ve been almost wiped out.People argue about the cause of the decline. Some blame weak enforcement of labor laws or the rise of state right-to-work laws. Others blame global competition and technology. But Martin Manley, an entrepreneur who previously served as assistant secretary of the Labor Department under President Bill Clinton, thinks he has the answer. In a new book titled “A Better Bargain: Organizing Employers and Workers to Grow America’s Middle Class,” Manley argues that the U.S. union system was doomed from the start.Before 1935, Manley notes, there were several types of collective bargaining in the U.S. But the one that ended up being enshrined in law, in the National Labor Relations Act, was called enterprise bargaining. Under that law, workers at each workplace have to vote to unionize; if they do, all workers at that workplace are covered by the union contract. If they reject the union down, however, there’s no collective bargaining.This system has a huge downside: competition. Suppose the workers at a McDonald’s want to form a union. The managers know that if the workers unionize, wages will go up and prices for hamburgers at that McDonald’s will rise. That will put the restaurant at a competitive disadvantage versus the non-unionized Burger King down the street, eventually resulting in layoffs. The managers will make this argument to the workers, who probably will find it convincing.If both the McDonald’s and the Burger King could coordinate and unionize together, competition would be no problem; wages would rise and the profits of the two giant corporations might fall while consumers paid higher prices for burgers. But because U.S. labor law forces each workplace to act independently on unionization, they can’t effectively coordinate. The situation is even worse for companies such as General Motors that face international competition because there’s no way for GM workers to coordinate with Volkswagen workers in Europe or Toyota workers in Asia.Manley has a two-pronged solution to this problem. Both pieces would require a major rewrite of U.S. labor law. And both would involve a shift from enterprise-level bargaining to sectoral bargaining, with negotiations taking place in an entire industry, not individual workplaces or companies.The first piece is industry associations — groups of companies in the same industry and region that bargain collectively with their workers all at once. Though it might seem counterintuitive to let employers collaborate like this, it would remove the competitive threat that unions represent, because the resulting agreements would constrain all businesses equally. Manley suggests that industry associations could also collaborate to create more efficient and flexible labor markets by providing worker training, sharing knowledge about workers across company lines and so on.Second, Manley would make unions nonexclusive. Under his preferred system, an industry association would bargain simultaneously with all the organizations that workers in that industry belonged to, be they unions, worker co-ops, professional associations or advocacy groups. The various worker groups would be awarded representation at the negotiating table proportional to their membership (which could overlap). Manley envisions various worker groups competing with each other for members by offering services other than wage bargaining.These are good ideas. To really be effective, they’ll require one crucial element: that workers who don’t belong to any organization are all covered by the contracts that result from sector-level labor negotiations. A law like this is the reason that the French and German workforces are still mostly covered by collective bargaining, despite falling unionization:If combined with Manley’s idea for competing labor organizations and proportional representation in negotiations, sectoral bargaining would undo the decades-long decline in private-sector collective bargaining almost overnight. It wouldn’t require unions to rebuild their membership; all it would need is a few worker organizations to pop up and start bargaining on behalf of everyone. At first, these early movers would get almost all the seats at the negotiating table, which would induce other workers to form other organizations to get a piece of the action.Presidential candidates such as Pete Buttigieg and Elizabeth Warren have backed sectoral bargaining, showing that the idea is catching on. Innovative ideas like Manley’s could allow sectoral bargaining to take root even faster and to be carried out in a way that many employers would embrace. Ultimately, a more cooperative relationship between workers and management would result in a more sustainable system for supporting the middle class.To contact the author of this story: Noah Smith at nsmith150@bloomberg.netTo contact the editor responsible for this story: James Greiff at jgreiff@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Noah Smith is a Bloomberg Opinion columnist. He was an assistant professor of finance at Stony Brook University, and he blogs at Noahpinion.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • BMW executive Markus Duesmann tasked with reviving Audi
    Reuters

    BMW executive Markus Duesmann tasked with reviving Audi

    Volkswagen on Friday installed former BMW executive Markus Duesmann to reinvent Audi after the German premium brand lost key engineering know-how and influence in the wake of the 2015 diesel-cheating scandal. Duesmann will become chief executive of Audi as well as take on board level responsibility for research and development at Volkswagen Group on April 1 next year, the Wolfsburg-based multi-brand group said on Friday.

  • VW ID. Space Vizzion: An electric road-tripping wagon
    Engadget

    VW ID. Space Vizzion: An electric road-tripping wagon

    At the 2019 LA Auto Show, VW showed off another ID. concept, the Space Vizzion, an electric take on the classic station wagon, including an optional third row of seats. Like all ID. concepts, it's based on a modular design, with a sleek minimal interior. While the final car may end up looking quite different, VW is targeting a 300 mile range, and a 2022 release date.

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