Volkswagen Will Just Fix Cars - Not Compensate European Owners With Cheat Software

As more and more s**t hits the fan VW keeps looking for more and more ways to stop the bleeding. Treating one group of customers better or different than another group is not going to end well in a world where everyone can now know all and see all. This scandal is a full employment opportunity for lawyers around the world who get their pound of flesh. The bleeding of cash at VW just begun and will go on for years. Not counting lost sales and profits I estimated the cost of settlements worldwide will be in the tens of billions. Look for VW to ratchet up the reserve for losses every six months or so as more and more cases are brought against it around the world.

I guess it makes good short-sighted business sense: You only put a bandaid on where it's bleeding. VW has been challenged in getting U.S. customers, and retaining them, long before Dieselgate, so they have to sweeten the pot there by offering cash cards and gift cards, and likely other compensations. In Europe, where the VW brand is strong, where sales have not been impacted by the scandal (so far), and where class-action lawsuits are far less common... not so much.

Long-term, however, might be a different story. I have no idea of how this will affect the VW/Audi group long term.

I don't see this affecting them much, not here Stateside. When you're already a largely irrelevant brand, there's not much you can do to make yourselves worse.

VW destroyed their credibility a long time ago.

What are PUGPROUD and The Steve looking for VW to do? As VW explained the customer motivation in Europe, due to government tax and regulatory actions, is different than in the USA. So they tailor different solutions to fit the situation. There isn't a one size fits all customer fix for this.

The German government and union have every reason to help VW from a national and employment standpoint. While not personally familiar with German law I would be surprised if top German law firms are not burning the midnight oil trying to figure out ways to represent German consumers and fatten their checkbooks in the process. VW has a real employment issue...the local government and union control enough power and shares to put substantial pressure on the company not to reduce its German workforce as it searches for cost reductions to meet cash needs. At the same time VW sells fewer cars than Toyota but employees just slightly under twice as many employees. Look for big employment cuts outside of Germany first. Just heard VW has pulled its support of local soccer teams. While it will survive VW and its employees over the next few years will likely have a near death experience by a thousand cuts.

A couple of points.
1. USA is almost unique in the world with our lawsuit happy culture. In Europe the rule is you sue, and you loose, you pay the defendant's costs. It cuts way down on legal cases and expenses. Ergo far fewer lawyers per citizen and much harder to fatten lawyer's pockets.
2. Germans tend to buy German and support their own companies even if it costs them more. They will accept VW's fixes and move on.
3. Legally, it is extremely difficult to cut employees in Europe. So yes plants outside of Europe will see the ax. But VW will then have real per vehicle cost issues. The interesting dilemma will be the Piech/Porsche family profit needs versus the government and workers.