Volkswagen continues to stagger after it was discovered weeks ago that the giant automaker had installed software on eleven million cars worldwide that would hide their emissions of toxic gasses. Most of the eleven million cars were sold in Europe, and recently countries are launching their own investigations into this giant scandal. The investigations are centering on how high up the corporation chain knowledge of this cheating existed and who, specifically, is to blame for these corrupt decisions.
The Frankfurter Allgemeine Sonntagszeitung has reported that VW technicians had warned the company executives about illegal emissions practices as far back as 2011, but it is unknown as of now why those warnings were ignored or if they were addressed at all.
Volkswagen spokespersons have refused to comment on rumors at those point, stating that their sole focus is on technical solutions for customers and dealers. So far the scandal has cost the job of Volkswagen CEO Martin Winterkom but you can bet more resignations will follow as facts are uncovered.
In related news, the Italian dealers of Volkswagen’s infected cars have suspended sales of the VW cars until more information is known, leaving about 40,000 cars stuck on Italian dealership lots. So far there have been no instructions from Volkswagen to suspend sales but a company spokesperson stated that it is certainly a decision that individual countries can make.
What does it all mean? This appears to just be the tip of an economic iceberg. At the time of the scandal, Volkswagen was the top-selling automaker in the world and in recent days their stock value has plummeted. In addition, the resale value of cars already purchased has also fallen sharply, leading some car experts to say this is the best time in history to buy a used Volkswagen, when prices are at their absolute lowest.
And what about the German economy? Volkswagen is Germany’s largest industrial giant. If that giant falls what does it do to an already fragile German economy? And because we are in a global economy, how does this affect economic systems in other countries that deal extensively with Germany?
The answers to these questions are not known yet, and it may be several months before they are. Suffice it to say this scandal is not going away and around the globe the effects of it will be felt for quite some time. The auto industry has never seen anything like this. Now we’ll see how well they can recover from it.