2007 Volkswagen Jetta 2.5l Wolfsburg Edition Loaded-leather-mp3-moonroof -1owner on 2040-cars

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VW diesel incentives could be fuel for prosecutors

In the 2000s, Volkswagen was among the companies that lobbied the government to get buyers of diesel vehicles a tax credit. The automaker even brought some of these models to Washington to show them to politicians. The incentive eventually passed, and about 39,500 customers of the 2009 Jetta TDI and Jetta SportWagen TDI got a $1,300 benefit – for a total cost of around $51 million. Now, according to Reuters, that politicking might come back to bite the automaker when prosecutors finally get cases to trial. The US Department of Justice, the Environmental Protection Agency, and attorneys general in at least 29 states are already investigating VW, and politicians are pushing for criminal and civil actions against the company. According to Reuters, there could be several legal routes available, too. One option is to bring tax fraud charges, and that would require proving the automaker knew it was making untrue claims about the diesel models. There's also the option of bringing a case under the False Claims Act, which prohibits fraud against the government. According to Reuters, a maximum penalty under the law would be three times the tax credit and another $5,000 for each vehicle that received it. The company is also facing a class-action lawsuit from disgruntled owners. To aid its defense against all of these claims, VW has hired the same firm that worked with BP during the Deepwater Horizon oil spill. Outside of the US, prosecutors in Germany have just started to build a case against former CEO Martin Winterkorn for alleged fraud. In addition to these potential legal penalties, VW could be fined around $18 billion by the EPA for the emissions infractions. The agency's investigation is getting the added backing of its Canadian counterpart. Although, the actual settlement is expected to be far less.

VW makes $9.2B offer for rest of truckmaker Scania

Volkswagen owns or has controlling interests in three commercial truck operations: besides its own, VW began buying shares in Sweden's Scania in 2000 and now controls 89.2 percent of its shares and 62.6 percent of its capital, then bought into Germany's Man in 2006 - in order to prevent Man from trying to take over Scania - and now owns 75 percent of it. The car company has managed to work out 200 million euros in savings, but believes it can unlock a total of 650 million euros in savings if it takes outright control of Scania and can spread more common parts among the three divisions.
It has proposed a 6.7-billion-euro ($9.2 billion) buyout, but according to a Bloomberg report, Scania's minority investors don't appear inclined to the deal. Although effectively controlled by VW, Scania is an independently-listed Swedish company, and a profitable one at that: in the January-September 2013 period its operating profit was 9.4 percent compared to Man's 0.4 percent. Some of the other shareholders believe that Scania is better off on its own and will not approve the deal, some have asked an auditor to look into the potential conflict of interest between VW and Man, while some are willing to examine the deal and "make an evaluation based on what a long-term owner finds is good," which might not be just "the stock market price plus a few percent." The buyout will only be official assuming VW can reach the 90-percent share threshold that Swedish law mandates for a squeeze-out.
Many of the arguments against boil down to investors believing that Scania's Swedishness and unique offerings are what keep it profitable, and ownership by the German car company will kill that. (Have we heard that somewhere before?) If Volkswagen can buy that additional 0.8-percent share in Scania, perhaps its buyout wrangling with Man will give it an idea of what it's in for: "dozens" of minority investors in the German truckmaker have filed cases against VW, seeking higher prices for their shares. It is likely only to delay the inevitable, though. If VW is really going to compete with Daimler and Volvo in the truck market, it has to get the size, clout and savings to do so.

North American production of foreign marques to jump in 2014

Wards Auto has released its North American Light Vehicle Production Forecast for 2014, and the report predicts foreign manufacturers will increase production on the continent some 3.9 percent by 2014. If accurate, that should see 123,000 additional cars, trucks and vans produced in North America, swelling the total number of units produced both by domestic and foreign manufacturers to 16.9 million light vehicles from a projected 15.6 million in 2013. Much of the increase can be attributed to the fact that Toyota intends to produce another car at its Blue Springs, MS plant as well as a new Lexus model at its Georgetown, KY facility in a year's time.
Likewise, Volkswagen intends to move production of a currently imported model to its plant in Puebla, Mexico. Daimler, Honda, Nissan and Mazda also plan to build additional models on North American soil for the first time. Around two-thirds of the new North American manufacturing will take place in Mexico, helping the country soak up a full 20 percent of the content's automotive production for the first time. You can head over to the Wards Auto site for the full report.