Volkswagen shares in Europe are tumbling as the company faces increased pressure from its massive diesel scandal, and with the news that VW U.S. CEO Michael Horn just quit, the news will probably get worse.
The German automaker’s shares dropped as much as four percent and the diesel scandal is estimated to now be costing Volkswagen up to $33 billion. The latest investigation has Paris prosecutors opening a judicial probe for aggravated fraud into VW for deceit and putting people’s health at risk following a preliminary inquiry in October. In the U.S., the Department of Justice has broadened its probe into the scandal by tapping a law to combat banking fraud, The Wall Street Journal recently reported.
In addition, prosecutors in Brunswick are now investigating 17 employees, an increase from six previously.
As investigations intensify worldwide, investors are starting to get worried. The company’s CEO, Matthias Muller, recently told employees that the scandal will result in “substantial and painful” financial damage. There is a possibility that VW will have to cut jobs in the U.S., Europe and possibly other countries depending on the level of fines.
In January, the U.S. Justice Department sued the automaker for up to $46 billion for violating environmental laws in the country. The company also faces more than 500 lawsuits from independent U.S. owners and settlement talks are still ongoing with the U.S. Justice Department, the Environmental Protection Agency and California Air Resources Board. There is still a chance VW will be forced to buy back some of the vehicles if a fix isn’t implemented.
[Source: Automotive News Europe]
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