Class action lawsuit filed against Volkswagen
Several law firms are filing class action lawsuits against Volkswagen over its admission that it used special software to get its cars to pass U.S. emissions tests.
Clifford Law Offices, based in Chicago, says it is filing a complaint to the Northern District of Illinois alleging that VW engaged in deceptive and fraudulent business practices.
Meanwhile, law firm Sutts, Strosberg LLP, based in Windsor, Canada, was reported in local media to have filed a class action lawsuit seeking $1 billion in damages and $100 million in punitive damages.
Future of Volkswagen CEO uncertain amid emissions scandal
Volkswagen's share price swung wildly Wednesday as the future of CEO Martin Winterkorn hung in the balance amid the company's growing emissions scandal.
Having fallen below 100 euros for the first time in nearly four years, Volkswagen AG's share price recovered to trade 2.5 percent higher at 108.5 euros. Wednesday's gyrations followed declines of 17 percent and 20 percent in the first two days of the week that saw nearly 25 billion euros (around $28 billion) wiped off the company's market value.
Before the scandal, VW had planned to extend Winterkorn's contract at a meeting Friday of the supervisory board. But the events of recent days have raised questions over his future, and German media were widely reporting that the board's executive committee was meeting Wednesday to discuss the crisis. Agency dpa and daily Bild cited people close to the committee.
VW is facing the prospect of multiple investigations and lawsuits following its admission that it used software to evade emissions controls in the U.S.
Already, the Environmental Protection Agency, which disclosed the company's misdemeanors, has said the company could face fines of as much as $18 billion. Other countries, such as South Korea, have also ordered investigations into emission levels of VW cars and there's growing speculation the company may face class-action suits for mis-selling products.
On Tuesday, the company said 11 million of its vehicles worldwide contained the so-called "defeat device" that allowed the cars to beat the testers. Its revelation was a stunning increase from the 482,000 cars previously identified by the U.S.'s Environmental Protection Agency.
CEO Winterkorn said he was "endlessly sorry" and asked in a video message for "your trust on our way forward." However, that has done little to douse speculation about his future.
VW has yet to explain who installed the software, under what direction, why and who knew about it. Winterkorn said Tuesday that he doesn't yet have all the answers himself, but also that it would be wrong to cast doubt on the work of the whole workforce "because of the grave mistakes of a few."
Plans before the scandal called for Winterkorn to have his stewardship of the company extended at a full board meeting Friday.
Earlier this month, Volkswagen said it planned to give Winterkorn -- the CEO since 2007 -- a two-year contract extension which would keep him in charge through the end of 2018.
The deputy leader of Germany's IG Metall industrial union, Joerg Hofmann, cautioned against premature personnel decisions and said that "all the facts must be on the table first." He told news agency dpa he hopes "that diesel technology as a whole will not be damaged."
On Tuesday, New York Attorney General Eric. T. Schneiderman said he had opened an investigation into the Volkswagen cars and would collaborate with other states to enforce consumer and environmental protections in the case.
Volkswagen has set aside an initial 6.5 billion euros ($7.3 billion) to cover the fallout and "win back the trust" of customers, though it didn't mention possible fines.
Aove and beyond legal problems, the scandal is a huge problem for a brand long identified with trustworthiness and reliability. And there are concerns that could spill over into a wider image problem for goods "made in Germany."
The head of the German exporters' association, Anton Boerner, urged Volkswagen to put the facts on the table quickly. "Whether collateral damage arises for the image of German products also depends on that," he told Germany's Bild daily.
He added, however, that the good image of German goods has deeper roots, "is rooted in excellent products from thousands of companies and, thank God, does not depend on a single company. We should keep a sense of proportion here."
Another question arising from the scandal is whether Volkswagen was alone in looking to dupe the testers. Worries that others may have indulged in similar malpractices have hit the share prices of many other auto makers in Europe, though not on the scale of VW.
On Wednesday, other European carmakers saw their share prices fall sharply then recoup some lost ground. In midmorning trading, BMW's share price was up 2.2 percent, while Daimler's rose 1.1 percent. French carmaker Peugeot Citroen saw its share price drop 3.1 percent while Renault's dropped 2.6 percent.
The problems afflicting German carmakers prompted the country's biggest bank, Deutsche Bank, to revise down its view on the main German stock market.
In a note to clients, the bank revised down its forecast for the DAX, as carmakers account for 25 percent of its total value. It warned of "a potentially more sustained loss in brand value and prolonged recovery period ahead in the U.S."
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