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Volkswagen forced to sell stake in Suzuki

The six-year-long failed marriage between Volkswagen and Suzuki has finally come to an end. Almost. An arbitration panel in London issued its final verdict which, according to a VW press release, cleared Suzuki in terminating the agreement, so VW now needs to get rid of its 19.9-percent share. However, the tribunal's decision said VW performed all of its obligations and Suzuki didn't – the Japanese carmaker should have given VW last-call rights for a delivery of diesel engines, but failed to. The breach opens Suzuki up to damage claim, but so far VW only says it reserves the right to sue. Now that Suzuki has an outside investor to provide funds it meant to get from VW, perhaps both can get back to their reasons for being. The press release is below. Ruling in arbitration proceedings: Cooperation between Volkswagen and Suzuki deemed terminated - Arbitral tribunal confirms Volkswagen met contractual obligations and finds that Suzuki has ordinary right to terminate agreement based on reasonable notice - Volkswagen to dispose of its 19.9 percent stake in Suzuki and expects positive effect on Company's earnings and liquidity from transaction - Arbitrators also find that Suzuki breached its contractual obligations to Volkswagen under the agreement and that Volkswagen has right to claim damages Wolfsburg, 30 August 2015 - An arbitral tribunal in London has announced its ruling in the dispute between Suzuki Motor Corporation and Volkswagen Aktiengesellschaft. As a result, cooperation between the two parties is deemed terminated. The arbitrators confirmed that Volkswagen met its contractual obligations under the cooperation agreement and found that Suzuki has terminated the agreement upon reasonable notice. Volkswagen will therefore now dispose of its 19.9 percent stake in Suzuki and expects a positive effect on the Company's earnings and liquidity from the transaction. The arbitral tribunal also confirmed that Suzuki breached its contractual obligations to Volkswagen under the agreement and that Volkswagen has the right to claim damages. "We welcome the clarity created by this ruling. The tribunal rejected Suzuki's claims of breach and found that Volkswagen met its contractual obligations under the cooperation agreement. Nevertheless, the arbitrators found that termination of the cooperation agreement by Suzuki on reasonable notice was valid, and that Volkswagen must dispose of the shares purchased.

Brand new cars are being sold with defective Takata airbags

If you just bought a 2016 Audi TT, 2017 Audi R8, 2016–17 Mitsubishi i-MiEV, or 2016 Volkswagen CC, we have some unsettling news for you. A report provided to a US Senate committee that oversees the US National Highway Traffic Safety Administration (NHTSA) and reported on by Automotive News claims these vehicles were sold with defective Takata airbags. And it gets worse. Toyota and FCA are called out in the report for continuing to build vehicles that will need to be recalled down the line for the same issue. That's not all. The report also states that of the airbags that have been replaced already in the Takata recall campaign, 2.1 million will need to eventually be replaced again. They don't have the drying agent that prevents the degradation of the ammonium nitrate, which can lead to explosions that can destroy the airbag housing and propel metal fragments at occupants. So these airbags are out there already. We're not done yet. There's also a stockpile of about 580,000 airbags waiting to be installed in cars coming in to have their defective airbags replaced. These 580k airbags also don't have the drying agent. They'll need to be replaced down the road, too. A new vehicle with a defective Takata airbag should be safe to drive, but that margin of safety decreases with time. If all this has you spinning around in a frustrated, agitated mess, there's a silver lining that is better than it sounds. So take a breath, run your fingers through your hair, and read on. Our best evidence right now demonstrates that defective Takata airbags – those without the drying agent that prevents humidity from degrading the ammonium nitrate propellant – aren't dangerous yet. It takes a long period of time combined with high humidity for them to reach the point where they can rupture their housing and cause serious injury. It's a matter of years, not days. So a new vehicle with a defective Takata airbag should be safe to drive, but that margin of safety decreases with time – and six years seems to be about as early as the degradation happens in the worst possible scenario. All this is small comfort for the millions of people who just realized their brand-new car has a time bomb installed in the wheel or dashboard, or the owners who waited patiently to have their airbags replaced only to discover that the new airbag is probably defective in the same way (although newer and safer!) as the old one.

Audi, Porsche ensnared in new Volkswagen cheating allegations

The scope of the Volkswagen emissions cheating scandal that has enveloped the global automaker for the past six weeks widened Monday. Now, some of the automaker's premium brands are further ensnared in the mess. Officials with the Environmental Protection Agency issued a second notice of violations Monday, accusing Volkswagen of violating the Clean Air Act by using defeat devices that circumvent emissions testing on diesel versions of certain vehicles equipped with 3.0-liter engines. Roughly 10,000 vehicles in the United States contain the illegal software, the EPA alleges. That's a far smaller number than the 482,000 vehicles affected by the first instances of cheating, which Volkswagen confessed to in September. But this latest violation alleges the cheating occurred broadly through the Volkswagen empire and includes vehicles from the Porsche and Audi brands. Audi had one model, the A3, involved in the first round of announced violations. But the brand, which has enjoyed skyrocketing sales in the US in recent years, is more extensively involved in violations announced Monday. The 2016 Audi A6 Quattro, A7 Quattro, A8, A8L and Q5 are among the cars which contain the illegal software, which permits the cars to emit nitrogen oxide at up to nine times the allowable thresholds set in the Clean Air Act, according to the EPA. The 2015 Porsche Cayenne and '14 Volkswagen Toureg SUV are also affected. "There is clear evidence of additional violations and it's important to put Volkswagen on notice and to inform the public." - Janet McCabe. "Audi, which has been on a roll in terms of sales, reputation and image of late, now is being drawn deeper into the quagmire," said Michelle Krebs, senior analyst for Autotrader. "Previously, only the low-volume A3 was under scrutiny, but now Audi's core models are under fire." Audi officials did not respond to a request for comment Monday. In a written statement issued late Monday afternoon, a Porsche spokesperson said, "We are surprised to learn this information. Until this notice, all our information was that the Porsche Cayenne Diesel is fully compliant." Porsche said it would cooperate with authorities.