VW will take out huge $21B loan to cover scandal costs
VW applied for these loans weeks ago as a cushion for upcoming expenses, but the company's situation has changed significantly since then. A scandal over CO2 emissions erupted in Europe, and prosecutors opened an investigation there into possible tax evasion in connection with the problem. Regulators in California also ordered a recall on the 3.0-liter V6 TDI after Audi confessed that the engine's software contained previously undocumented emissions control devices.
In addition to these loans, VW continues to search internally for money to pay for this scandal. Its cost-cutting plan includes reducing the research and development budget by the equivalent of $1.1 billion in 2016, and the company might also close the Phaeton's lavish factory in Dresden, Germany. However, the automaker wants to keep jobs safe from the slashed spending, according to Reuters. Every cent could be vital for the future because a Credit Suisse estimate suggests the price tag of this whole affair could be as much as $82.5 billion.
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