Rolling coverage of the Volkswagen emissions scandal * VW board holds crisis meeting, with more heads expected to roll * Volkswagen’s new chief executive: a guide to the contenders * European stock markets rise but remain on track for weekly loss 9.54am BST A brand consultancy estimates that the VW brand, valued earlier this year at $31bn, has lost $10bn in value since the emissions scandal erupted. Germany’s national brand has also been tarnished. At Brand Finance’s last calculation VW’s brand value stood at just over $31bn, making it the world’s third most valuable auto brand. It appeared to be motoring ahead… The apparent ease with which the company’s activities were uncovered makes it all the more astonishing that VW was willing to endanger its most valuable asset. Rather than ‘Das Auto’, VW’s motto might be more appropriate if changed to ‘Crass Auto’. That such an iconic German brand, the ‘people’s car’, could behave in this way threatens to undo decades of accumulated goodwill and cast aspersions over the practices of German industry, making the Siemens bribery scandal appear less a one-off than evidence of a broader malaise. With reports that BMW has been implicated too, the damage to Germany’s nation brand could become critical. Germany’s status as the world’s most powerful nation brand is under threat.” 9.46am BST In the UK, Labour has waded into the VW emissions scandal. Lilian Greenwood, Labour’s shadow transport secretary, said: Ministers must come clean and admit when they were first told about the diesel emissions scandal. The International Council on Clean Transportation, the body which helped to expose the problem, warned a year ago that dangerously high levels of nitrogen oxide emissions were not confined to America. It is unacceptable that the Government waited this long to take action. Over recent days the Department for Transport has been forced to perform a series of screeching u-turns. After initially saying that only the European Commission could conduct an investigation, Patrick McLoughlin has been forced to backtrack, but after this latest revelation there can be little faith in the Department’s response. 9.32am BST The FTSE 100 index is now trading nearly 2.2% higher at 6091.22, boosted by commodity stocks such as copper and crude oil prices. Mining giant Glencore is one of the top risers, rising as much as 5%, after hitting a fresh record low on Thursday when Goldman Sachs cut its target price for the stock. Germany’s Dax is 2.6% ahead at 9672.69 while France’s CAC has gained 2.9% to 4473.54. 9.28am BST The euro has lost more than 1% against the dollar, falling to $1.1116, after Fed chief Janet Yellen said it was likely that US interest rates would be raised before the end of the year. She said in a speech in Amherst, Massachusetts, last night: I anticipate that it will likely be appropriate to raise the target range for the federal funds rate sometime later this year and to continue boosting short-term rates at a gradual pace thereafter as the labor market improves further and inflation moves back to our 2% objective.” 9.15am BST Some say that if Porsche boss Matthias Müller gets the top job at Volkswagen as expected, he may be a temporary CEO until another internal candidate, the company’s brand chief Herbert Diess has proved himself. Diess is a newcomer, having joined from BMW in July, but won praise for the work he did there as a senior executive – including ruthless cost-cutting. 8.53am BST Volkswagen’s new CEO, to be announced later today, faces the task of steering the company through its worst crisis in its 78-year-history. One of the questions the board will have to consider in choosing a new boss is how he will deal with regulators in the US, for example if he is hauled in front of a committee there. The scandal deepened on Thursday, as US and European authorities stepped up their investigations. Germany’s transport minister said that Volkswagen had also manipulated emissions tests in Europe. I am furious that the world’s leading car company wilfully took steps that polluted our environment and deceived consumers. 8.35am BST Credit ratings agency Fitch placed Volkswagen on “negative watch” for a possible downgrade two days ago, which would make it more expensive for the company to borrow money. Emmanuel Bulle, senior director at the rating agency, said this morning that the company could weather a regulatory penalty of $10-20bn. He stressed, however, that the main issue is the long-term impact on Volkswagen’s relationship with customers and regulators. The world’s biggest carmaker could face an $18bn penalty in the US over cheating government pollution tests. Bulle told Bloomberg TV: That is something that they could afford. it would be a huge blow but they could survive. If there is a huge loss of faith in the company, that could lead to a further downgrade. We don’t know for sure what consumers will do, what regulators will do. 8.17am BST European stock markets have opened higher, but are still on track for a weekly loss after the Volkwagen scandal. VW shares are up 3.6%, and Germany’s Dax has risen 1.8% in early trading. The FTSE 100 index in London is trading nearly 90 points higher, up 1.47% at 6048.63. France’s CAC and Spain’s Ibex have both gained 1.7% and Italy’s FTSE MiB is up 1.9%. Last night’s speech by Fed chief Janet Yellen certainly kept the Fed’s options open for a rate rise this year, saying that most participants on the FOMC expected an “initial increase in the federal funds rate later this year” but if the economy surprises them then judgements might change. Translation, we may raise rates, but then we might not. 7.59am BST GOOD MORNING. The Volkswagen emissions test scandal which has engulfed the global car industry continues to unfold. It is the worst corporate scandal in Germany for years, and could prove to be a bigger threat to chancellor Angela Merkel than the Greece debt crisis. Continue reading...
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