Volkswagen Withdraws From World Rally Championship Racing After 4 Years Of Dominance

Re "...Runs Out Of Money..." title

It the sensational "...Runs Out Of Money..." title accurate? Or is it accurate to say Volkswagen is still cash and profit positive, but due to Dieselgate and their resulting reduced sales, they're engaged in cost-cutting measures so that they DON'T run out of operating capital?

Yeah, I know... truth and accuracy don't get clicks :-/

They are puling out of most of the high ticket series to save cash... So yes they have run out of money for WRC and WEC.

Agent009: I'm not one to defend VW (I have a Dieselgate-affected Audi Q5), but I do make the distinction between "I've run out of money to buy a McDonald's Big Mac" versus "I'm choosing to spend my money elsewhere, even though I have more than enough spare change to buy a Big Mac."

Maybe it's just the programming in *MY* mind, but when I hear the phrase "run out of money," I understand that to mean, literally, to be without cash or cash equivalents.

My understanding is that VW is nowhere close to being cash-strapped, "running out of cash", etc. It's not that they CAN'T invest in this race for lack of sufficient cash, it's that they're CHOOSING not to (in spite of having the cash to do it *easily*). And wisely so, I might add! You'd have some terribly bad optics laying off thousands of employees, scheduling more layoffs, and then throwing a pile of discretionary cash at the races.

To put this into financial terms, Dieselgate has had a considerable negative impact on VAG's (Volkswagen Audi Group's) unit sales, and VAG's sales incentives (e.g., rebates and reduced lending rates) have further eroded their gross margins. With reduced revenue, VAG can still report a "reasonable" profit by cutting back their expenses (such as a race series). This is a prudent and likely course of action, even if you have healthy cash reserves (i.e., "cash to burn"). Reporting financial losses cause panic amongst shareholders, even if you have a big pile of money in the bank.

No 009, they don't run out of cash. They are reallocating their resources, just like how American companies are described as "smart" or "adaptive" or "flexible" when they re-deploy and right sizing by laying off their workers. At the risk of diving into the financial minutiae, you are again illustrating your ignorance, either that or propensity for misinformation.

nguyenvuminh: (+1) I read your post after I posted mine on 10/31/2016 2:33:24 PM. I could have just thrown you a big "YUP!" rather than going into details :-)

Title changed to be less inflammatory

@Agent009: (+1) Bingo! And kudos to you :-) I like it!