USA TODAY International Edition
VW stock jumps despite scandal
Penalties near $ 20B, but first half of year beats expectations
Volkswagen Group raised the estimated tab on its diesel emissions scandal Wednesday to a total approaching $ 20 billion, even as it faced further legal trouble in the U. S.
The German automaker said “legal risks predominantly arising in North America” would add another $ 2.4 billion to a bill that already totaled $ 17.8 billion based on today’s currency exchange rates. Still, Volkswagen shares traded in Frankfurt jumped 5.7% to $ 136.01 after the automaker said its operating performance was “significantly higher than market expectations for the first half of 2016.”
VW said it would post an operating profit of $ 8.3 billion for the first six months of the year when excluding one- time items such as the effect of the emissions scandal. The VW brand outperformed expectations as the European auto market improved and corporations purchased more fleet vehicles than expected.
Still, revenue for the year is expected to fall by 5%, VW said. The company will release its entire first- half earnings statement on July 28.
The company on Tuesday became the target of yet another round of lawsuits over the bogus software it has admitted to inserting into nearly 600,000 diesel vehicles in the U. S. — and 11 million worldwide — to cheat emissions standards. The attorneys general of New York, Massachusetts and Maryland took action against the company, seeking civil penalties.
“The allegations against Volkswagen, Audi and Porsche reveal a culture of deeply- rooted corporate arrogance, combined with a conscious disregard for the rule of law and the protection of public health and the environment,” New York Attorney General Eric Schneiderman said in a statement.
Volkswagen last month agreed to pay up to $ 10 billion for vehicle buybacks and loss compensation to consumers, $ 2.7 billion in environmental mitigation, $ 2 billion on clean- emissions infrastructure and $ 603 million to most states in a sweeping settlement that must still be approved by a federal judge.