The Morning Dieselgate Scandal Sheet

VW’s TDI mess is spreading to other models; Merkel not pleased; Winterkorn still “sorry” in several languages.

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The boss is really, really sorry—and really, really gone

Dr. Martin Winterkorn issued yet another apology on September 23 that appeared to serve as little more than another more strident apology. “Millions of people across the world trust our brands, our cars and our technologies," he said in a video message. "I am endlessly sorry that we have disappointed this trust. I apologize in every way to our customers, to authorities, and the whole public for the wrongdoing.” He resigned hours later.

The scandal will likely spread to many other countries

As the industry drills down to understand which of the 11 million Volkswagens and Audis that carry the 2-liter TDI engine will be affected by what sort of recall—if any—is carried out, officials in the UK have turned their attention to models in the VW Group’s Euro-only Skoda and Seat lines. English authorities are now investigating all of VW’s TDI engines, and South Korea, Italy and France have indicated they are launching separate investigations.

The stock market is not very forgiving

Volkswagen has shed $34 billion in value in just two days. However, a top analyst for Deutsche Bank this morning warns against using this as a buy opportunity. “We stress that the full magnitude of the emission scandal is likely to remain uncertain for much longer. So far we conclude that 1) the legal fines will be painful, impossible to quantify and potentially remain a topic for years and that 2) the impact on the operational business poses even higher risks for future cash flows.”

So if you’re looking to short the market, hold you fire. Also, hold on to that Jetta TDI. VW may have to buy it back.