Economy

Volkswagen says diesel fix will cost another $2.9 billion

Volkswagen says diesel fix will cost another $2.9 billion”

Stock prices of Volkswagen fell sharply Friday after a surprise announcement of another $3 billion charge related to the company's massive US diesel emissions scandal.

The latest provisions would weigh on the third-quarter operating result, the carmaker said in a statement, as they bring the total sum set aside by Volkswagen to deal with fines and costs over the diesel scandal to 25.1 billion euros.

The German automaker said it needs to increase provisions for a buyback and retrofitting program because hardware repairs are "proving to be far more technically complex and time consuming".

Volkswagen shares fell four percent early Friday on the Frankfurt Stock Exchange and finished with a 1.29 percent decline.

The VW penalty is the largest criminal fine ever negotiated by the USA government for any vehicle maker, more than the fines levied in recent years against Toyota, General Motors, and Japanese airbag supplier Takata.

Reuters provides more: "In March Munich prosecutors searched offices at the carmaker's Ingolstadt base, where about 44,000 workers are employed, and the premises of Jones Day, a U.S. law firm hired by VW to lead an investigation into the emissions scandal".

German media claim the person is Wolfgang Hatz, who stepped down from his post on Porsche's management board a year ago after being suspended over the "dieselgate" investigation. Hatz join Volkswagen in 2001, ran Audi's engine development program until 2007, then was made a board member at Porsche AG, Volkswagen's sports-car maker, in charge of research and development.



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