Investment spending a VWcasualty
VOLKSWAGEN (VW) is to reduce investment spending at its main passenger-car brand by 1 billion (R15.13bn) a year and speed up other cost cuts in the wake of its diesel emissions cheating scandal.
The German car maker would switch to a different technology for treating diesel emissions in Europe and North America “as soon as possible”, the Wolfsburg-based car maker said yesterday. VW plans to put more focus on developing plugin hybrids and other electricpowered vehicles, including redesigning the Phaeton sedan as an all-electric model.
The cuts come amid renewed criticism for VW’s handling of the scandal, which affects some 11 million cars worldwide. The company was far too slow to disclose its use of software to enable its diesel cars to pass US laboratory emissions tests, despite far higher on-road pollution, said Stephan Weil, the prime minister of the German state of Lower Saxony and a VW board member.
“This admission should clearly have come much sooner – a further serious mistake,” Weil told the Lower Saxony parliament yesterday. “Who decided this course of action and when is also something that’s being investigated.”
A VW supervisory board committee charged with overseeing the external investigation into the emissions cheating met yesterday in Wolfsburg. The company has so far set aside 6.5bn for repairs and to compensate customers, and has said that amount will not be enough. – Bloomberg JOHNSON & Johnson (J&J), the world’s biggest maker of health-care products, beat analysts’ estimates for third-quarter profit, though sales were slightly weaker than expected for key drugs such as Remicade. Earnings of $1.49 (R20) a share, excluding one-time items, beat by 4c the average of 18 analysts’ estimates. The company also raised its forecast for the year to earnings of $6.15 to $6.20 a share. Sales fell 7.4 percent to $17.1 billion, missing the $17.45bn average projection. J&J has been investing heavily in building up its pharmaceutical business as other products, such as medical devices, face pressure to compete on price to retain customers. The company fell short in the third quarter on several of its top drugs. Arthritis treatment Remicade had revenue of $1.61bn, compared with expectations for $1.68bn of sales, while blood thinner Xarelto’s $461 million in sales missed the $468.5m average projection. – Bloomberg
BARCLAYS
KENYA’S central bank had called in a government agency to take control of Imperial Bank because of “unsafe or unsound business conditions” and the agency said it would investigate possible “malpractices”. Imperial Bank is the second bank in Kenya to be put under management since August, when Dubai Bank Kenya, a very small lender, was put in receivership after facing liquidity problems. Privately held Imperial Bank, which appointed a new managing director last month after his predecessor died, was ranked 19 out of Kenya’s 45 lenders at the end of 2014. On June 30, the lender reported assets of 70.3 billion shillings (R8.93bn). Kenya’s central bank said it had appointed the Kenya Deposit Insurance Corporation to manage Imperial Bank for 12 months in the interest of depositors, creditors, as well as members of the public. – Reuters