VW caught by the Yanks for breaking emission laws

I'm the first to agree that VW won't go under over this - though they will suffer some pretty serious financial impact in some markets, at least in the short term.

I also couldn't really give two hoots about "the issue" that a loud minority are all up in arms about. There's a new VW Amarok diesel out in the back yard at the moment, and I'd have no hesitation in buying one tomorrow if I needed a ute. ;)

But the point that I'm making is that, if the directors of the company knew that this practice was going on and were willing to take the risk of being caught out, with the subsequent financial / reputation losses that would occur - then they most definitely were not acting in the best interests of their shareholders. The head honcho has already been given the flick, and I'd say that more are likely to follow him.

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Originally Posted by Eevo

they have the correct corporate culture.

shareholders first
everyone else second

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I read that VW shares are down about 40%, so the shareholders won't be thankful for being made 40% poorer. If I was a VW shareholder I'd be breathing fire and demanding that heads roll.
Then there's a the huge hit to sales from all those affected vehicles not being able to be sold and being left sitting on the docks around the world, including Oz.
The company's reputation has also been trashed.
How many staff will be laid off because sales go down?
This will be a huge hit to VW.

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Originally Posted by DiscoMick

I read that VW shares are down about 40%,

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need to look at the long term value.
the drop is only to 2012 value
will recover quickly

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Originally Posted by Eevo

need to look at the long term value.
the drop is only to 2012 value
will recover quickly

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That depends on how VW handles this crisis. If they try to cover up they will be crucified by public opinion.

Sent from my SM-G900I using AULRO mobile app

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Originally Posted by DiscoMick

That depends on how VW handles this crisis. If they try to cover up they will be crucified by public opinion.

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i think they already came out n apologised.

Did people stop buying BP products after Horizon spill?

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Originally Posted by AndyG

Did people stop buying BP products after Horizon spill?

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Good point Andy. VW have handled this pretty well I think. You can't make a silk purse out of a sow's ear, but with the right P R and some sacrificial head lopping, you can mitigate the damage.
VW shares might just be worth the punt.

I just bought 12 shares. I'm calling them The Dirty Dozen. It was just under $2500 worth. I don't need the money for a couple of years and I really think this has been blown way out of proportion. I just wish I could have got them the Tuesday after the news cam out, I would have made 30% gain already.

They've been hit hard in the media and that's been hard on share prices but it'll blow over soon enough. It'll help that the boss man stood down and the boss man from Porsche has come over to straighten things out. Porsche SE hold over 51% control over VW AG.

Happy Days

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Originally Posted by AndyG

Did people stop buying BP products after Horizon spill?

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Not really relevant - oil does not carry trade marks from production to the pump - and downstream is one of the least profitable areas of the oil business.

The motor industry is the opposite - it is all about brand, and VW cannot simply sell their product as a commodity at wholesale level. And simply changing the label is rarely very successful, although this episode may see some of the labels which VW owns gain in popularity compared to the VW label.

The whole episode is almost certainly driven by a corporate culture that places far more value on this quarter's financials than it does in long term results, unfortunately very common today.

John

It's relevant in the context of Corporate Image and whether the typical consumer actually cares about Corporate image / ethics or do they just but the product with gives the best bang for buck.

If i was to buy a vehicle tomorrow VW would be on my short list,
Would i cross off GM and Toyota due to their appalling history in managing recalls, probably not, if i believed the product I wanted was ok.

Would i drive past BP and go to Caltex because of the Gulf disaster, no.

Would i fly certain low cost Asian Airlines, no way.