VW Bankruptcy? Why VW Won’t Go Out Of Business

I’ll start this off all at once and bluntly: the VW diesel scandal didn’t kill anyone, and VW will be fine. It’s not what you’re used to hearing in the press, but it’s true.

Need proof?

On February 6, 2014, General Motors (GM) recalled about 800,000 of its small cars due to faulty ignition switches, which could shut off the engine during driving and thereby prevent the airbags from inflating.[1] The company continued to recall more of its cars over the next several months, resulting in nearly 30 million cars worldwide recalled[2] and paid compensation for 124 deaths.

https://en.wikipedia.org/wiki/General_Motors_ignition_switch_scandal

GM is fine and their scandal caused a huge number of deaths… 124!

My point isn’t to single out GM as a badder boy than VW, but rather to calm down those who think VW will be driven out of business by consumers or governments. Unless something in the automobile market changes, VW won’t go out of business. They’ll continue to build cars, like they have since 1937.

Dieselgate shocked many owners and non-owners, and caused a lot of anger. And like any outrage, it was fueled by the press. That’s their job. Outrage = pageviews = ad revenue.

VW operating profit - or, a historical graph of why VW will be fine... they make lots of money
VW operating profit – or, a historical graph of why VW will be fine… they make lots of money

Echos of Audi

This Dieselgate scandal reminds me quite a bit of Audi’s unintended acceleration scandal back in the 1980s. 60 Minutes whipped the driving public (in the US anyway) into an outraged Audi-hating mob. There  was never any proof that it was mechanical… no proof that it was anything but poor driving. Yet Audi took a hit and nearly stopped selling cars in the US.

But they didn’t. Audi lived. Like VW will live after the Dieselgate headlines have fallen off our screens.

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