Rob Cox: VW needs an eight-step recovery plan 13 Oct 2015 That’s the minimum number of constituencies the $68 bln carmaker, snagged in a giant engineering deception, must now mollify to restore credibility. Customers, investors, suppliers, dealers, governments, unions, staff and ordinary people each will require a unique approach.
German nuclear relief masks deeper power shortage 12 Oct 2015 Shares of E.ON and RWE jumped more than 10 pct as regulators approved the sector’s 38 bln euro nuclear provisioning. But overall prospects remain dismal. Rules favouring green energy production dent wholesale prices. Exposure to carbon-rich lignite is an Achilles’ heel.
Volkswagen just spins its wheels before Congress 8 Oct 2015 U.S. CEO Michael Horn offered lawmakers a few new tidbits about the carmaker’s emissions scandal and response. He lacked answers to basic questions, though, and the politicians failed to ask tougher ones. Getting to the bottom of the mess requires both sides to kick it up a gear.
Deutsche writedown shows evil of ancient goodwill 8 Oct 2015 The German bank has belatedly recognised that it paid 5.8 bln euros too much for acquisitions dating back to 1999. It’s a little nutty, but to be expected. The real problem is the economically bizarre technique of accounting for premiums paid in acquisitions.
Regulators give Deutsche rebirth a helpful shove 8 Oct 2015 The German lender’s 6.4 bln euros of writedowns were prompted partly by supervisors demanding more capital. Co-chief John Cryan wants to slice or scrap the dividend to keep the balance sheet perky. With rule changes coming, it’s the only way Deutsche Bank can avoid a cash call.
Deutsche kid gloves give bondholders false hope 8 Oct 2015 Restructuring costs are forcing the bank to cut its dividend, but it looks set to pay coupons on hybrid bonds. It’s a twist on the 2008 controversy, when Deutsche didn’t repay Tier 2 bonds. Bondholders shouldn’t conclude that banks will always treat them better than equity.
VW’s emissions cleanup looks half-hearted at best 8 Oct 2015 Siemens’ 2006 bribery scandal suggests investigations at VW might lead to legal action between the supervisory board and former top execs. In that case, VW’s new Chairman and former CFO Hans Dieter Poetsch would have to sue himself. VW’s new start is more fraught than fresh.
Potash selloff shows flaws in K+S takeover defence 5 Oct 2015 Slumping demand for the fertiliser ingredient has prompted Canada’s Potash Corp to withdraw a 7.9 billion euro ($8.9 billion) offer for its German rival. For three months, K+S played hard to get even as prices fell. Shareholders may now regret its reluctance to negotiate.
Schaeffler gets second time unlucky with markets 2 Oct 2015 The German car-parts maker delayed its IPO amid a scandal at customer VW. It’s not Schaeffler’s first unhappy brush with markets. In 2009, the financial crisis foiled a hostile takeover of rival Continental, leaving the group almost bankrupt. Management again face a tough choice.
Edward Hadas: VW shows two sides of pushy culture 2 Oct 2015 If the carmaker’s workers had been on the lookout for bad news, the scandal over falsifying emissions could have been avoided. But VW’s management was geared for growth. The problem is perennial. The determination that drives business success also sows the seeds of its undoing.
Bayer weakens itself via mistimed plastics IPO 1 Oct 2015 The German drug giant has slashed the size of its plastics arm’s listing by 40 pct and cut the price by a quarter, blaming China and VW woes. As the proceeds will be used to lower its own debt, its balance sheet will be weaker than it could have been. Bayer should have waited.
Commerzbank ought to consider merging with HVB 1 Oct 2015 The German lender makes poor returns, while its domestic rival’s Italian parent UniCredit could do with more capital. Putting Commerz and HVB together, ideally in an all-share merger, could help. It could also help Germany achieve a speedy exit for its Commerz stake.
VW’s dodgy diesel gains: a measly 4.3 bln euros 30 Sep 2015 That’s what the German carmaker appears to have saved by skimping on state-of-the-art emissions technology. Look only at the U.S. cars that got VW in trouble and it falls to 200 mln euros. Investors have so far lost 140 times that as the shares have plunged. Cheating doesn’t pay.
Henry Blodget makes most of Wall Street ban 29 Sep 2015 Selling most of Business Insider to Axel Springer for $343 mln is another step in the disgraced former dot-com analyst’s rehab. Blodget’s media outlet has made money and created jobs – despite the distorted market for talent that Wall Street created and Silicon Valley is aping.
Business Insider picks deep German pockets 29 Sep 2015 Axel Springer is buying the business and tech news website at a $442 mln valuation. Nine times sales implies a long run of fast growth. It evokes Dresdner’s acquisition of Wasserstein Perella, a deal from the days when Business Insider boss Henry Blodget worked on Wall Street.
VW’s emissions scandal needn’t break its own bank 28 Sep 2015 The carmaker’s financial services arm is being sucked into its current crisis. The group’s funding costs are rising and the ECB won’t buy its asset-backed debt. The $164 bln-by-assets lender is vulnerable to a brand implosion - but should cope with more realistic scenarios.
VW tests U.S. enforcers’ fairness to foreign firms 28 Sep 2015 The German carmaker skidded into a legal system that extracts bigger fines and more guilty pleas from overseas companies than American peers. Differences in the cases may explain the discrepancy. But any prosecutor bias may get as much scrutiny as Volkswagen’s emissions tricks.
VW bungles restart with new CEO from old guard 25 Sep 2015 Volkswagen lifer Matthias Mueller will be the stricken carmaker’s next boss. He has what it takes to fix operational woes. But as an internal appointment he is an imperfect investigator of past wrongdoing. Herbert Diess, poached recently from BMW, would have been a better choice.
VW needs a chairman from Frankenstein’s lab 25 Sep 2015 Who could lead Europe’s largest carmaker out of its current emissions-scandal funk? The challenge is so big and diverse that it would be impossible to find the one perfect candidate. Breakingviews names five managers that Wolfsburg engineers must wish they could “cut and shut”.
Edward Hadas: VW crashes into regulation 25 Sep 2015 The German carmaker crossed the sometimes fine line between permitted arbitrage of regulation and cheating. Volkswagen got it wrong, but successful economies mostly get it right. Although regulators can be annoying, industrial prosperity depends on them.