Volkswagen (VLKAY) Stock Closes Lower on Fitch Credit Rating Downgrade
NEW YORK (TheStreet) -- Volkswagen (VLKAY) stock closed lower by 1.47% to $26.06 on Monday afternoon, after the company's credit rating was downgraded to "BBB+" from "A" with a negative long-term outlook at Fitch Ratings.
"The downgrade reflects the corporate governance, management and internal control issues highlighted by the ongoing emission test crisis related to up to 11 million diesel-powered vehicles," the rating agency said in a statement. "The downgrade also reflects the expected direct and indirect financial effects from this crisis."
Additionally, Volkswagen began talks with union leaders in Germany as the company plans to cut $1.08 billion from annual costs for the next three years, Reuters reports.
The carmaker is preparing to pay for fines and other costs related to the emissions scandal that may cost the company several billion euros.
"The challenges are enormous, but the workforce will stand behind the company as long as we succeed in agreeing on a balanced package of investments, economy measures and forward-looking projects," Group Works Council of Volkswagen Chairman Bernd Osterloh said in a statement.
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