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Volkswagen AG said irregularities on diesel- emission readings extend to 11 million vehicles around the world, forcing the German carmaker to set aside 6.5 billion euros ($7.3 billion) in an initial tally of the potential costs.
Volkswagen extended its slide after the announcement, falling as much as 30.85 euros and bringing the drop in two days to 37 percent. That has wiped out 24 billion euros in market value, as the probe into rigged air-polution widens. Regulators from Germany, France, South Korea and Italy have vowed to scrutinize the German automaker’s vehicles. To address the growing crisis, the executive committee of the carmaker’s supervisory board will meet Wednesday, said people familiar with the matter.
"It’s not just a U.S. matter for VW -- you have regulators all over the globe looking into it with potentially numerous fines to come," said Vincenzo Longo, a strategist for IG Group in Milan. "We don’t see any stop to this bloodbath unless there is a change at the head of VW and full cooperation with authorities. Some heads need to roll to get investors buying back VW."
Chief Executive Officer Martin Winterkorn has been at the center of the scrutiny since the U.S. Environmental Protection Agency revealed on Friday that VW cheated on air-pollution tests. While the 68-year-old CEO said on Sunday that he was “deeply sorry” and promised a thorough investigation, he didn’t specifically comment on his role. He’ll need to explain to the supervisory board, which was set to vote this week on his contract extension, how deep the malfeasance is spread throughout the carmaker.
Volkswagen extended its slide after the announcement, falling as much as 30.85 euros and bringing the drop in two days to 37 percent. That has wiped out 24 billion euros in market value, as the probe into rigged air-polution widens. Regulators from Germany, France, South Korea and Italy have vowed to scrutinize the German automaker’s vehicles. To address the growing crisis, the executive committee of the carmaker’s supervisory board will meet Wednesday, said people familiar with the matter.
"It’s not just a U.S. matter for VW -- you have regulators all over the globe looking into it with potentially numerous fines to come," said Vincenzo Longo, a strategist for IG Group in Milan. "We don’t see any stop to this bloodbath unless there is a change at the head of VW and full cooperation with authorities. Some heads need to roll to get investors buying back VW."
Chief Executive Officer Martin Winterkorn has been at the center of the scrutiny since the U.S. Environmental Protection Agency revealed on Friday that VW cheated on air-pollution tests. While the 68-year-old CEO said on Sunday that he was “deeply sorry” and promised a thorough investigation, he didn’t specifically comment on his role. He’ll need to explain to the supervisory board, which was set to vote this week on his contract extension, how deep the malfeasance is spread throughout the carmaker.
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