Volkswagen's largest shareholders are recruiting smaller shareholders to file suit against the German automaker due to lost value of their shares.
Dozens of Volkswagen’s largest shareholders, along with “thousands” of smaller investors, are planning to sue the automaker, demanding compensation for the losses they’ve experienced as a result of the embattled German automaker’s diesel cheating scandal.
VW is already facing more than 450 lawsuits by owners of its faulty diesel models. Those suits, which have been consolidated by an inter-judicial panel, are expected to heard by a federal district judge in San Francisco. Among other things, those owners claim they have lost trade-in value as a result of the revelations VW rigged its diesel vehicles to improperly pass U.S. emissions tests.
The latest action is being handled by the law firm Nieding + Barth, which intends to bring suit in a German court on behalf of 66 institutional investors in the U.S. and Great Britain.
“On top of that, we collected several thousands of private investors. Therefore we think we are the biggest platform for suits against Volkswagen in Germany,” the firm’s partner, Klaus Nieding, told the Reuters news service.
In September the U.S. the Environmental Protection Agency announced it had discovered a so-called “defeat device” was in use on the maker’s 2.0-liter diesel models. VW subsequently confirmed that surreptitious software was installed on 11 million vehicles sold worldwide, including 482,000 in the U.S. It has since acknowledged cheating on tests involving a more upscale 3.0-liter diesel engine, as well.
Volkswagen has seen its stock drop by nearly a third since then, losing about $24 billion, or 22 billion euros, in total value. The maker has so far set aside more than $7 billion to cover potential costs and damages, but it has also lined up a $20 billion line of credit and reportedly pledged to sell off some of its assets, if necessary, to repay that fund.
(VW CEO insists the maker “didn’t lie.” For more, Click Here.)
The maker faces a lawsuit filed earlier this month by the U.S. Justice Department that could cost it $46 billion, though legal observers believe the final penalty will be significantly smaller if the company makes a good-faith effort to resolve the problem.
VW was planning to begin fixing vehicles sold in overseas market this month, with repairs set to be completed before the end of 2016. But a proposed fix for models sold in the U.S. – which has some of the world’s toughest diesel emissions standards – was rejected last week by both the EPA and the California Air Resources Board.
That was just one of a series of issues facing Matthias Mueller, the executive named VW chief executive in late September, following the ouster of long-time CEO Martin Winterkorn.
Mueller anchored a news conference at the North American International Auto Show in Detroit before heading to Washington to meet with officials from the EPA. But he created a sizable stir by telling an NPR correspondent that the company “did not lie,” but simply misunderstood U.S. diesel emissions rules.
(Click Here for details VW’s Mueller defending VW’s honor.)
That statement was quickly derided by those who noted the maker had designed its defeat device software to specifically detect when a vehicle was undergoing emissions testing. Otherwise, its 2.0-liter diesels were allowed to produce as much as 40 times the U.S. mandate for emissions of smog-causing oxides of nitrogen, or NOx.
Previously, several senior VW executives tried to downplay the scandal by attributing the cheating to just a handful of software engineers. But as of last week, at least 40 VW employees had come forward under an internal amnesty program set up as part of VW’s own investigation into the scandal.
A report in the influential German publication Bild am Sonnstag indicated there is growing concern about CEO Mueller’s leadership. But a separate report by Reuters was more upbeat.
“Everybody can see that Mr Mueller’s U.S. trip was not successful. He made a mistake. But that does not mean that we move away from him,” a source close to the board told the news service. “The Porsche and Piech families stand firmly behind Mr Mueller.”
(To see more about the impact the lifting of Iran sanctions will have on U.S. automakers, Click Here.)
The two branches of the family of Volkswagen founder Ferdinand Piech hold a controlling interest in the German maker – and have collectively lost more than any of VW’s other shareholders.
This is precisely the damage I discussed that the EPA caused by their over zealous threats of billions in fines over a trivial exhaust emissions issue that hurt absolutely no one. The lawsuit should be against the EPA for abuse of power and false allegations on the 3.0L Audi V6 diesel engine.
The media keeps trying to make a “small number of people” into the entire VW corporation when the crime was clearly perpetuated by a small rogue group of engineers and programmers. Their improper software only impacted the EA189 series four cyl. diesel engines. The media can spin it any way they like and they still won’t be able to make VW the corporation guilty of lying or any other crime when VW executive management and the other 650,000 employees had no knowledge of the crime committed by ~40 people within VW.
I have to ask the question: How could a small emissions violation be so horrible that the EPA would threaten a $20+ BILLION fine? Compare that to the 100+ people that GM KILLED via a defective ignition switch and cover-up. Explain to me where the “justice” is in the EPA’s abuse of power and how GM gets a Free Pass for KILLING 100+ people?
Is the U.S. as a country so corrupt as to allow both of these situations to be handled so unfairly and unjustly to ALL involved?
I would like to know what is the actual performance deficit in not having the emissions test sensing software installed? Is it 10hp, 20hp, a huge deficit in torque, which is one of the real selling points on a diesel.
I would think VW long-term quality would be the biggest negative in them not holding resale value.
But I can see the EPA’s point as having to deal with Tier4, 5, 6 & Euro/Bin specifications and regulations is no joke, and can be more severe than SI (spark-ignited) engines.
I do agree with your argument on the GM ignition switch fines(along with other things GM has done in the past), along with Ford with their ignition switches, fuel tanks (leading back to 1st gen Falcon/Mustang but came to public light with the Pinto/Bobcat). The bigger the company the bigger the blow-up in the media.
JAE-
No one has lost money on a VW diesel powered vehicle unless they have sold or traded it during the period of sensationalism and abuse by the EPA. VW is repairing all vehicles so that they are 100% compliant so the vehicle’s resale value should not diminish. Why would it when it’s 100% compliant? VW also gave $500 to all diesel owners in the U.S. affected by the scandal and an additional $500 gift card good for parts, service, etc. at a VW dealership. So that’s $1000 per owner for a trivial violation that VW is 100% correcting in all vehicles at no charge to customers.
This whole deal is clearly a witch hunt by the EPA, the siren chasers and the media because they all profit from sensationalizing a tempest in a teacup violation. None of those financially profiting from the bogus sensationalizing of the emissions issue are interested in justice, they just want to steal as much money as they can from VW. These profiteers have complete disregard for the U.S. jobs that are being lost as a result of the outlandish actions by the EPA and the yellow journalism by some in the media – for profit.
Absolutely NO ONE can explain let alone justify the irrational actions of the EPA and media. It’s been a feeding frenzy since the beginning. Some in the media continually write false stories and use unreliable sources for quotes to try and increase the magnitude of the trivial exhaust violation that harmed absolutely no one. Some in the media even insist that the alleged 40-50 people who installed the illegal software some how comprise the entire VW corporation of 650,000 employees. In fact these 650,000 employees who did absolutely nothing wrong are the victims of the EPA and media attack on VW the corporation. Stockholders have also been fleeced by the EPA’s incomprehensible actions and coercion of VW. Again we have the EPA’s abuse of power punishing innocent victims over a trivial emissions violation. This is complete insanity. Punish the criminals not the victims!
As far as the difference between a fully emissions compliant EA189 series diesel engine and the current status of the non-compliant engines, an independent test where they ran all emissions controls at 100% the same as how the engines operate in the EPA lab dyno test, there was a 3 mpg loss in highway mpg and .6 seconds slower acceleration in 0-60 mph. The performance loss is trivial and the vehicles still meet EPA mpg figures because when the EPA certified the MPG figures all emissions controls were functioning in the lab test. The real proof that VW executive management had no clue about the illegal software is the fact VW management complained to the EPA that the EPA’s test mpg figures were lower than what customers actually experience in real world driving.
In a just world the punishment should fit the crime. How can GM KILL 100+ people by covering up a defective ignition switch and get a Free Pass by the media and Feds? How is it that when VW has a trivial exhaust emissions violation the EPA and media go postal and crucify VW hurting MILLIONS of innocent people via the EPA’s abuse of power and the media’s unscrupulous and inaccurate reporting? Why aren’t the EPA and media accountable for their actions? How can the EPA fine VW Billions over a trivial exhaust emissions violation perpetuated by a small group of rogue engineers and programmers within VW when a similar group at GM covered up the defective ignition switch that KILLED over 100 people, yet GM skated?
How can anyone justify the extreme abuse of power by the EPA? The answer is that no one can. It’s one thing to properly punish VW for a group of rogue employees who perpetuated the ruse and quite another to seriously compromise the employment and lives of millions of innocent people who had nothing to do with the violation, due to abuse of power by the EPA.
As a U.S. citizen I am embarrassed and dismayed at the irrational and indefensible abuse of power by the EPA in this trivial matter. You’d think that VW was the company that KILLED 100+ people if you didn’t in fact know that GM was the actual company who KILLED 100+ people and escaped accountability for their outrageous and deadly actions.
You couldn’t be more wrong about deaths caused by fraud committed by VW’s falsified diesel emissions. Exceeding emission by 40X the legal limit does have consequences.
http://fortune.com/2015/11/30/diesel-emissions-deaths-europe-ee/
http://fortune.com/2015/11/30/diesel-emissions-deaths-europe-ee/
Nikko-
If you read the sensational claims in the story you linked to, the key word is “MAY” have suffered some premature health issue as a result of air pollution. They ESTIMATE that as many as 432,000 people in the EU in 2012 “MAY” have died prematurely from air pollution. There is ZERO evidence to support their speculation. We read about global warming almost daily and how it is going to destroy the world yet scientists do not agree that global warming even exists let alone what damage it may or may not be doing. Just because some agency makes claims that they can’t prove doesn’t make them true.
Any lazy person can buy into the EPA’s sensationalized allegations that they can’t prove in a court of law. It’s all speculation by the EPA on how much actual exhaust emissions was generated but the reality is that it was trivial and likely harmed NO ONE based on the EPA’s own testing.
If you do the math and take ALL exhaust emissions by ALL clean diesel passenger cars on the roadways of the U.S. – not just the excess VW alleged excess VW diesel emissions, the LEGAL NOx exhaust emissions by clean diesel HD. highway vehicles in the U.S. is at least 140 TIMES MORE emissions by volume ANNUALLY and LEGALLY than the ENTIRE exhaust emissions emitted by ALL of the clean diesel passenger cars in the U.S.!!!
So how is it that HD clean diesels in the U.S. can LEGALLY EMIT 140 TIMES by volume WHAT PASSENGER CARS IN THE U.S. EMIT ANNUALLY yet the EPA and media claim the miniscule VW excess emissions is such a big deal as to fine VW BILLIONS?
There is absolutely no evidence what so ever that the excessive emissions from the VW diesels harmed anyone. If it did then the HD clean diesels emissions would have killed millions of people, but it didn’t. The new, modern HD diesel engines are truly clean diesels that emit a staggering low .8g/mile NOx. THAT is an extremely clean HD diesel. Passenger car clean diesels emit an amazingly low .3g/mile which is incredibly clean.
The FACT is the VW trivial exhaust emissions is totally insignificant and a fishing expedition for the gold diggers.
So when people talk stupidity and speculate on deaths caused by the trivial VW exhaust violation, they are not only wrong, they are intentionally perpetuating FALSE information to dupe those too lazy to do their own research to find the TRUTH instead of the sensationalized deception of the public by the media and EPA who are all cashing in on a totally insignificant emissions issue.
Have you seen anyone else bother to even research the U.S. EPA emissions requirements and do the math on emissions in the U.S. for light and HD clean diesel vehicles? No of course not because people are lazy and many believe whatever sensationalism the media spews including meritless claims of deaths from air pollution.
Show me the coroners death certificates that state the person died primarily from air pollution.