The disclosure of Volkswagen's (VLKAY) criminal misstatement of diesel emissions to the U.S. Environmental Protection Agency 15 months ago is leading to a series of repercussions -- not all of them bad for the automaker.
Yes, VW has racked up $16 billion -- so far -- worth of damages, reimbursements and fines as a result of a scheme to mislead regulators by way of a computer program that manipulated emission test readings. The VW brand is tarnished, badly.
Several talented VW executives have been forced to retire or to seek employment elsewhere. Much of the capital that should be invested in new vehicles and technologies, notably a slew of electric, battery-powered models, is gone.
On the plus side, VW is preparing to undertake a broad restructuring, long overdue, that could transform it into a much stronger, more competitive, more profitable company. VW management met in Wolfsburg, Germany on Friday with union leaders for what were expected to be contentious debates over cost-cutting -- to generate needed capital for investment.
"Costs," the late Henry Ford II used to say, famously, "come walking into your office on two legs."
VW employs roughly 600,000 people, about half of them in Germany. The German automaker looks the way many of competitors like Ford (F) and General Motors (GM) looked 30 years ago, with a high level of vertical integration. In other words, much of what could be subcontracted at lower cost to outside vendors is still done in-house.