Volkswagen’s Dieselgate Gets Worse

Volkswagen USA’s Chattanooga factory (Credit: Volkswagen )

Talk about the potential fall of Volkswagen is becoming more serious. With the fallout of Dieselgate widening, things look dire for the German automaker. Some wonder if the company will make it out of its self-made disaster in one piece, while others theorize that VW will bounce back stronger than ever. Still, as the implications of Volkswagen’s deceit become clearer, it seems that that outcome will be less-than-favorable for the automaker.

In other words, VW is in some serious scheisse.

According to a recent Bloomberg report, automotive industry experts anticipate the upcoming VW TDI recall to be one of the costliest and most complex ever. To execute them properly, the company might have to establish specialty shops, which alone will consume quite a bit of money.

Volkswagen is scrambling to keep class-action lawsuit hearings in Virginia and Detroit, near current and former U.S. headquarters, respectively. According to the Chattanooga Times Free Press, the automaker doesn’t want cases heard in Tennessee, where its single production facility is located in the country, or in California, for which dozens of attorneys are pushing. VW’s lawyers called such actions “choreographed” and obviously feel that the company won’t get as favorable an outcome in those court systems.

Thanks to class-action suits and government fines, there’s a chance that Volkswagen will have to sell of its less-profitable brands or risk sinking completely. Those brands are Ducati, Lamborghini, Bugatti and Bentley. Many experts believe Chinese investors would scoop the four up quickly, supplying some much-needed cash. The alternative would be to wind down the brands, then resurrect them later.

The German and U.S. governments are working together on the case, according to a new Wall Street Journal report. They’re strategizing about how to handle the situation and the potential for serious economic damage. After all, not many automakers employ more than half of an entire city.

While it might seem inconsequential considering the other problems Volkswagen is facing, it recently lost its perch as the biggest automaker in the world. Toyota clenched the top spot with 7.49 million models sold through the end of the September, edging out VW’s 7.43 million models.