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VW Cutting 30,000 Jobs Worldwide in Wake of Diesel Emissions Scandal

Move is part of broader changes to shift product plans, improve efficiency.

by on Nov.18, 2016

VW CEO Matthias Mueller wants to double the carmaker's profit margin and shift its product mix.

Volkswagen AG will eliminate about 30,000 jobs, the majority of them in Germany, as it struggles to cut costs in the wake of a diesel emissions scandal that some analysts estimate will eventually cost it as much as $30 billion or more.

The cuts are expected to save the embattled automaker about 3.7 billion Euros, or nearly $4 billion annually, according to VW CEO Matthias Mueller. However, the move is meant to do more than simply help cover the costs of the diesel scandal.

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The job cuts are part of “the biggest modernization program in the history of the group’s core brand,” Mueller told reporters during a news conference at VW’s corporate headquarters in Wolfsburg, Germany.  “The VW brand needs a real shake-up,” he added, “and that is exactly what the future pact has turned out to be.”

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Volkswagen Delivers Solid Profit Despite Diesel Scandal

U.S. buyback program set to get underway.

by on Oct.27, 2016

The Porsche Macan helped drive big profits for the brand - and for parent Volkswagen AG.

As it begins to see its massive diesel scandal fade into the rearview mirror, Volkswagen AG reported Thursday a big jump in third-quarter earnings.

The German maker had a net, after-tax profit of 2.34 billion euros, or $2.55 billion. By comparison, VW went 6.7 billion euros into the red a year ago as it set aside funds to cover fines and legal costs triggered by the revelation it had rigged emissions tests on its 2.0- and 3.0-liter diesel engines.

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On Tuesday, a judge in San Francisco gave final approval to a nearly $15 settlement with U.S. and California regulators covering the smaller of the two powertrains. That includes up to $10 billion to buy back the 475,000 Audi and Volkswagen brand vehicles sold in the U.S. using that engine. VW says buybacks are likely to begin by mid-November, though the maker still hopes to come up with a technical fix for at least some of those vehicles.

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VW Delivers Profitable Surprise

Earnings “significantly higher” despite diesel scandal.

by on Jul.20, 2016

Regaining momentum: VW delivers a strong, first-half profit despite the costs of its diesel scandal.

Volkswagen AG beat its earnings forecast for the first half of 2016, delivering “significantly higher” profits even while setting aside another 2.2 billion euros, or $2.4 billion, to cover the growing cost of its diesel emissions scandal.

The news comes a day after New York and two other states filed suit against the embattled German maker, claiming senior executives had helped cover up the diesel emissions subterfuge. Last month, VW agreed to a $14.7 billion settlement covering its 2.0-liter diesel, a deal that includes $10 billion to buy back nearly 500,000 vehicles.  Most of the funds VW has so far committed to settle what it calls the “diesel issue” came out of 2015 earnings, however.

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For the first half of 2016, VW said it had an operating profit of 7.5 billion euros, or $8.25 billion. That would drop to 5.3 billion euros after factoring in the latest charges for the emissions scandal, money largely related to legal costs in North America.

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VW Back in the Black but Diesel Scandal Takes a Stiff Toll

Profits down 20% year-over-year.

by on May.31, 2016

VW gets back into the black for Q1, but the maker see lower sales and smaller margins for all of 2016.

Volkswagen AG clawed its way back into the black during the first quarter of this year following the spectacular plunge it took last year as it dealt with a global diesel emissions scandal.

Even so, the maker’s $2.6 billion profit for the January-March quarter was down 20.1% from year earlier numbers. Excluding one-time items, VW’s operating profit was down 5.9%, to $3.5 billion. Sales and other revenues, meanwhile, slipped 3.4%, to $56.8 billion.

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“In light of the wide range of challenges we are currently facing, we are satisfied overall with the start we have made to what will undoubtedly be a demanding fiscal year 2016,” VW CEO Matthias Mueller said in a statement.

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VW Investing $114 Bil in Bid for Global Sales Leadership

New products to get majority of investment.

by on Nov.22, 2013

The new investment program will see the CrossBlue concept put into production.

With a goal of becoming the world’s largest automaker in mind, Volkswagen AG plans to invest $114 billion to upgrade factories and roll out an array of new vehicles for its more than a dozen different brands.

The maker, currently third in global sales behind Japan’s Toyota Motor Co. and Detroit-based General Motors, has set a goal of being the world’s “leading” automaker by 2018, the period covered by the latest plan – which calls for an investment of 84.2 billion euros. At the same time, the maker hopes to reduce spending on property, plants and equipment by 500 million euros annually.

“We will continue to invest strongly in our innovation and technology leadership,” Chief Executive Officer Martin Winterkorn said in the statement. “This will give us extra power on our way to the top.”

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Over two-thirds of the planned investment will go into product, according to Volkswagen, perhaps no surprise considering the wide range of brands the maker has added over the years. VW’s Automotive Group now covers everything from small and economy vehicles, with the Seat and Skoda lines, to luxury and ultra-premium models, with Audi, Lamborghini and Bentley.  Since Winterkorn  took the helm in 2007, it has added Scania and MAN trucks, the Ducati motorcycle company – and completed a challenging takeover of sports car maker Porsche.

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VW Posts Solid Second Quarter Despite Net Profit Decline

Rival Peugeot slides deeper into a hole - yet investors cheer.

by on Jul.31, 2013

VW's net fell sharply - but that was largely due to its takeover of Porsche.

At first glance, it might have seemed a tough quarter for Volkswagen AG. After all, the maker’s net profit tumbled by half compared to year-ago levels. But the 2% jump in operating earnings is what analysts and investors are focusing on.

VW’s net was hammered largely by the anticipated, one-time costs associated with its takeover of German sports car manufacturer Porsche. The operating income, up 1.8% year-over-year, tells how the maker was able to hold its own in what it called a “difficult market environment.”

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In fact, an even clearer picture of that environment emerged from the earnings report posted by VW’s French rival PSA Peugeot Citroen which saw its losses climb to 426 million euros for the first half of the year due to declining European car sales and a strike by workers protesting its plans to close factories, reduce capacity and eliminate 8,000 jobs.

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VW Earnings Plunge 38% as Euro Market Collapses

Maker remains world’s third-best seller.

by on Apr.24, 2013

Despite the strong reviews for the new Golf, VW earnings were hit hard by problems in Europe.

The ongoing collapse of the European automotive market took a heavy toll on the world’s third-largest automaker by unit sales, Volkswagen AG reporting a 38% decline in first-quarter profits.

The maker previously had been able to offset the worst of the European downturn by counting on strong demand in other key markets, especially China. But the results of the first quarter shows it is being caught up in the same net that is expected to hammer earnings for essentially all manufacturers operating on the Continent – including Ford and Daimler, both of whom also reported earnings today.

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Europe’s biggest automaker said it earned 1.95 billion euros, or $3.15 billion, for the January-March quarter, down from 3.15 billion euros a year ago. Revenue, meanwhile fell 1.6 percent, to 46.57 billion, due to what VW called “negative effects from declining European markets.”

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Booming Sales Put Volkswagen of America Back in the Black

First profit in over a decade.

by on Mar.29, 2013

Workers at the new VW plant in Tennessee have had trouble meeting the growing demand for the American-made Passat.

For the first time since the original Beetle dominated the American import market, Volkswagen of America is moving solidly back into the black.

The German maker’s U.S. sales and marketing arm had steadily lost sales, share – and lots of money – ever since Asian rivals like Toyota and Honda became dominant forces in the market back in the late 1970s. In fact, VW’s decline was so severe that the maker came close to abandoning the U.S. in the early 1990s.

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But, over the last several years, it has picked up significant momentum with a mix of new products, aggressive marketing – and the addition of its first U.S. factory in decades, in Chattanooga, Tennessee.

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VW Runs Up Big Score for 2012

$15 bil earnings handily top Toyota, GM.

by on Mar.22, 2013

The success of the latest Golf has helped fuel VW's industry-leading profitability.

After setting its sights on becoming the world’s biggest carmaker six years ago, Volkswagen AG has steadily moved closer to its twin objective of becoming the world’s most profitable automaker, reporting operating income of 11.5 billion euros, or $15 billion, for 2012. The total easily surpassed General Motors Co.’s $7.9 billion and Toyota Motor Corp.’s $11.1 billion.

Martin Winterkorn, chairman of VW’s Board of Management, noted during the company’s annual financial press conference the Volkswagen Group had mastered the challenges posed by a difficult market environment in 2012 by posting record vehicle sales, sales revenue and earnings.

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“Volkswagen is feeling the headwinds –especially in Europe. Nevertheless we remain guardedly confident,” he said.

The Volkswagen Group not only turned in a compelling operational performance in the past fiscal year – it also met its targets for major strategic projects: The once-uncertain acquisition of the Porsche brand was completed last August, while Ducati, a legendary motorcycle brand, also joined the Group family, Winterkorn said.

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VW Earnings Surge 41% as Sales Hit New Peak

But 2013 forecast gloomy as European market staggers.

by on Feb.22, 2013

Bigger profit, smaller paycheck for VW CEO Winterkorn.

What should have been an especially good bit of news for Volkswagen was tempered by the maker’s less-than-upbeat outlook for the European market this coming year.

The German maker, which was the world’s third-largest automotive manufacturer in 2012, saw a 40.9% surge in its 2012 net profit, with revenues jumping 20.9% for the year. Volkswagen AG said its operating profit increased by 2.1% for the year.

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The maker said it expects to “outperform the market as a whole in a challenging environment” during 2013, with a further increase in sales anticipated. But the statement by CEO Martin Winterkorn added a cautionary note that, “We are not completely immune to the intense competition and the impact this has on the business.”

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