Tags: Tom Hutchinson | volkswagen | Scandal | cars

'It's a Tough Fix': Unhappy Car Owners to Haunt Volkswagen

'It's a Tough Fix': Unhappy Car Owners to Haunt Volkswagen

By    |   Wednesday, 23 September 2015 10:26 AM

Volkswagen faces the difficult challenge of appeasing angry auto buyers in the biggest scandal in the 78-year history of the world's largest carmaker, Tom Hutchinson, the senior financial editor for The High Income Factor Newsletter, told Newsmax TV.

“It's a tough fix because what they did is they manipulated the software to show it was meeting emissions standards when it wasn't,” he told “Newsmax Now.”

”They have a high-powered car that doesn't really have the admission standards necessary, so how do you fix it?" he asked.

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"You can't make the car less powerful so it meets the admission standards. People who bought it would be like 'Hey, this isn't the car I bought.' I don't know if the environment people are going to allow them not to. Who knows where this ends for them?”

Meanwhile, Volkswagen CEO Martin Winterkorn resigned on Wednesday, taking responsibility for the German carmaker's rigging of U.S. emissions tests, Reuters reported. "Volkswagen needs a fresh start - also in terms of personnel. I am clearing the way for this fresh start with my resignation," Winterkorn said in a statement.

He said he was shocked by events of the past few days, above all that misconduct on such a massive scale was possible at the company.

A five-member executive committee had grilled Winterkorn, 68, since morning at the company's headquarters in Wolfsburg, Germany. The company was under huge pressure to take decisive action, with its shares down more than 30 percent in value since the crisis broke, and the bad news still coming.

German prosecutors said on Wednesday they were conducting a preliminary investigation into the manipulation of vehicle emission test results at Volkswagen, while French Energy Minister Segolene Royal said her country would be "extremely severe" if its investigation into the firm found any wrongdoing.

U.S. authorities are planning criminal investigations after discovering that Volkswagen programmed computers in its cars to detect when they were being tested and alter the running of their diesel engines to conceal their true emissions.

Turning to other topics, Hutchinson said the Federal Reserve made a “huge mistake” by holding rates at near zero.

The Fed has kept its benchmark rate close to zero for almost seven years. In that time, U.S. stocks have nearly tripled from their financial crisis low. The Fed meets again next month and in December. In its rate decision, the Fed cited low inflation, weakness in the global economy and unsettled financial markets.

“The markets had already factored it in. Now the markets disappointed they didn't raise rates and are more worried about the global economy. They weren't talking about raising rates to 1 or 2 percent. What they were talking about raising it a fraction of a millimeter above zero where it's been for the whole recovery,” he said.

Some investors, expecting the Fed would be confident enough to nudge rates up by at least a quarter of a point, interpreted the stance as a sign that the global economy is dangerously weak.

“This was an easy one. If they miss this one, what are they going to do when rate hikes need to be made and they're really unpopular?" he asked.

"A lot of people talk about waiting until December or next year as if that will be the promised land for rate hiking when everybody will love the idea. Of course, people are going to object then just like they did in September. They're only going to be able to raise rates over a chorus of naysayers. Until they get used to that fact, forget it. They'll never raise them.”

(Newsmax wires contributed to this article.)

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Volkswagen faces the difficult challenge of appeasing angry auto buyers in the biggest scandal in the 78-year history of the world's largest carmaker, Tom Hutchinson, the senior financial editor for The High Income Factor Newsletter, told Newsmax TV.
Tom Hutchinson, volkswagen, Scandal, cars
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2015-26-23
Wednesday, 23 September 2015 10:26 AM
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