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This is Business Live from BBC News with Aaron Heslehurst and Ben
Unveiling the source of the scandal - Volkswagen prepares to release
the results of its investigation into how 11 million of its cars
Live from London, that's our top story on Thursday
Fall from grace - it was the world's biggest car
marker, but today VW will try and explain how its cars broke
emission test rules for over a decade.
Also in the programme: As the smog red alert lifts in Beijing,
so Chinese car sales grow at their fastest pace in two years.
Just what China needs! And the global market not tracking the
losses we saw in Wall Street and Asia.
And everyone has a book in them, so the saying goes.
But what if publishers and editors don't agree that
We meet the boss of self-publishing website Blurb.
And as one one woman admits to recruiting chefs for her cooking
business via the dating app Tinder, we want to know what's the most
Send us your stories of being hired or fired.
It was the largest car maker in the world, and now it's
the source of one of the biggest corporate scandals in history.
In less than two hours' time, the embattled car giant Volkswagen
will release the results of its long-awaited internal
investigation into the emissions rigging saga.
The company has been looking at how its diesel vehicles managed
It isn't clear what is expected from the release, but what is clear
is how much the scandal has hurt VW's bottom line.
So far, 11 million cars have been recalled globally.
These include Golf models and the Audi A3 from 2009 to 2015.
As well as footing the recall bills, VW is also facing lawsuits
from governments and motorists around the world.
UK sales in November were down a fifth from the same month a year
ago, despite the rest of the market making near 4% gains.
In the US, Volkswagen sales were 25% for the month as the extent
of the emissions scandal became clear.
More than ten billion euros - $10.1 bn - has been wiped off VW's
It has also cost chief executive Martin Winterkorn his job.
VW has just posted its first quarterly loss in a decade after it
took a $6.7 billion provision to help cover costs for the scandal.
But many experts believe the total bill could come to more than $30
billion as legal bills, fines and the cost of
George Galliers, Equity Research Analyst from Evercore ISI,
Welcome to the programme. We saw the numbers there. Talk us through your
view of this, because in different parts of the world, there are
different impacts on what people think of the scandal and how they
are voting with their feet and whether they are buying VW cars.
Exactly. What we are seeing, in the UK, sales were down 20%. In the US,
you have seen a sharp drop in sales, 24%. But in much of mainland Europe,
Volkswagen's market share is in-line with where it was tracking in the
first nine months of the year, so it doesn't look like consumers are
backing away from the box what brand.
We get an update this morning on the scale from VW's point of view. Some
analysts are ashamed that this could be good news for Volkswagen, a long
overdue restructuring and putting overdue restructuring and putting
the business in order and making it more efficient. Could it turn out in
the long run to be a blessing? That is the view we have taken. It is a
huge cost, around 20 billion year rose, but it has opportunity for the
company to address some of the inefficiencies around research and
development, purchasing and also high personnel costs. And we believe
the scandal will act as a catalyst for the company to take a closer
look at itself and look to remedy some of the rungs of the past. We
talked about the costs, 6.7 billion euros, but again, I am curious about
your thoughts. It is like the BP story. The costs of the scandal will
escalate, and some are now predicting 30 billion euros, just
over $30 billion. And we expect this to cost around 30 billion euros. We
think yesterday's announcement reduces that by around 10-15%. The
30 billion is made up of fixing the engines affected, 11 million
vehicles, the engines interacted by CO2, the legal implications, the
fines and impact on market share and pricing. It is a lot of money, but
not enough to do too much damage to Volkswagen. By the end of this year,
we think that Fox wagon -- Volkswagen will be sitting on offers
of 24 billion, so they have deep coffers.
Let's look at some of the other stories making headlines all around
the world. One of the Middle East's largest
retail chains has withdrawn Donald Trump products
from its shelves after he called for a temporary ban
on Muslims entering the US. The chain known as Lifestyle says it
has removed Trump Home products from its stores in the UAE, Kuwait,
Saudi Arabia and Qatar. Four tobacco companies are taking
the UK Government to court on Thursday over new rules
on packaging which they say From May 2016, all cigarette packets
will have to remove branding, The measures are aimed
at discouraging people from smoking. Australia adopted similar
legislation three years ago. Profit at Inditex, the largest
fashion retailer in the world and owner of Zara, says profits
soared 20% in the nine Net profit came in at more than $2.2
billion, giving the firm a strong Let's take a look round the world
at what's business stories Neil Woodford selling out of
Rolls-Royce. A lot of emphasis is placed on his actions, but he says
he has lost his long-term confidence in the business model. It is a big
blow for a company already facing a tough time. It has issued a number
of profit warnings and is facing major reorganisation. Plenty of
details there on the Rolls-Royce sale if you want them. Was that
Stephanie with Prince William? Yes! There you go. We don't need to see
that any more. That is a caption competition in itself! What is Steph
saying to Prince William and what is he saying to her? We will read out
the best ones later on. OK, let's go and take a look at the other
business stories. Celia Hatton is in Beijing. We thought that car sales
were slowing in China, but they have jumped 20%. And I guess with all the
smog stories of late, this is the last thing that China needs. The
moral of the story here is that tax breaks really work in China. Car
sales were down for much of the year, they had flat lined. Many
people were predicting the end to the growth of the car industry in
China, but really, the Government stepped in, they have the cost of
taxes on small cars in China, that represents 70% of the market here,
and that meant a lot of people took the decision to go out and buy a
car, so this is the second month we have seen explosive growth. Car
sales up 20% in the month of November, the biggest jump in two
years. OK, Celia, good on you. Thank you
for that update. So, car sales are up in China at the moment. I want to
talk about Asia. Some slipped or were fairly muted
because of the lower oil prices. The slump in the black stuff
continued to feed the slowing We saw Wall Street off. The rest of
Asia following. Tokyo's Nikkei closing
down at a five-week low. That said, one notable move
in the region was the Aussie dollar Australian jobs numbers surged
in November, pushing unemployment Europe expected to track the losses
on Wall Street and in Asia. We continue seeing this
seven-week low in Europe. The FTSE 100 is down, the Dax and
Cac fairly muted. The plunge in commodity prices -
again everything from iron ore, copper, aluminium
to the black stuff. Let's go and find out what should be
the big news over there today. More signs of continued strength in
the labour market. The number of Americans filing for a diploma last
week it's better to show that. They are near levels last recorded in the
70s. Also improving, the Government was my finances. The Treasury
Department will likely report a Treasury deficit of $68 billion
complied to $138 billion last month. Import and export prices are
expected to have both dropped. Meanwhile, photo shotmaker Adobe is
expected to report fourth-quarter earnings in line with estimates, but
the company has warned it will take a hit because of the strong dollar.
Their stock is up 26% this year. As always, Nada in New York for us.
Joining us is Anne Richards, Chief Investment Officer,
Let's talk about commodities. When you look at the actions of the
commodities firms, be that BHP, Glencore, Rio, there could be some
restructuring in the pipeline and the amount of debt these companies
have on their books. We are at the end of a quite a long cycle, at
least we hope it is the end. It does feel we are very close to that point
of maximum pain, because every single supplier that comes out to
the market with a statement right now, it is either cutting costs or
raising capital or trying to sell assets. A lot of debt has gone into
these companies to fund that growth, because everybody thought China was
it growth ever, and it is still growing, just not at the pace
before. That risk of some sort of fear of a credit default is
beginning to build up, so we see this acceleration of announcements
from companies, and that is giving the broader markets a bit of
concern. I am interested in this. We do hear different opinions. You say
we are hopefully at the end of this cycle, this lower in terms of the
prices, but it seems everybody had their eggs in one basket, which was
China. China still has growth but is slowing. Experts say they can't see
the light at the end of the tunnel just yet in terms of China returning
to better growth. So if it doesn't, these commodity prices won't go up,
will they? China is still growing at 6%, give or take. It is still more
than twice the rate of the UK. It needs to, because it is a larger
country. Not necessarily. It is very big, and so incrementally more
growth is more beneficial for demand. So the fact that it isn't
growing as fast as it was before and there isn't another China act there
to take on the Batten means we have to get used to a lower global level
of growth. Thank you very much. We are going to talk about shoes and
dating apps and allsorts of things a little later when we have a look
through the papers just to clarify. Still to come: Why penning your best
selling novel could be a lot easier We meet the boss of the biggest
self-publishing company You're with Business
Live from BBC News. It's been a dramatic week for mining
companies with a big slump There could be some more
big news from Glencore, We were just discussing some of the
headline issues for this week. Glencore could have an update for
us. It holds the distinction of being the worst performing stock in
the in Tyre FTSE 100. It has lost 70% of its value, and no surprise it
is in the commodity area. We heard from Anglo-American who had a
radical restructuring, 85,000 jobs to go, cancelling the dividend and
selling 35 minds. Glencore has said it is going to try to reduce its
mountain of debt, and that is a problem a lot of these companies
have, falling prices and a mountain of debt. It is going to try to
reduce it debt burden to 18 billion, and sell off some of its business is
to try to get its enormous balance sheet under control. It is the fatal
cocktail of declining prices and mountain of debt. So far this
morning, investors like what they have heard, the stock is up almost
8%, not out of the woods yet but early signs are investors like what
they hear today. Simon, thanks for that. We will talk
to you soon. You didn't even hear me at! Put your ear back in! Just
quickly, a big day-to-day. The UK interest rate decision. How long has
it been that it has been at a half of 1%? Since March 2000 and nine. We
have the interest rate decision again today, not expected to change,
all eyes really an America's central bank. And that meeting is next week.
So it is likely that America will fire the starting gun first before
the UK. But worth watching to see whether there is a change. There
could be a split of the nine members of the Monetary Policy Committee.
In the Guardian this morning, this is an undercover investigation by
the Guardian looking at conditions in the warehouse for Sports Direct.
They found some tough working practices. They say there is a lot
of concern for those workers. Our top story: Volkswagen is set
to unveil how 11 million of the company's cars
were falsifying emissions tests, We have been discussing the
implications for the business. Some are suggesting a long overdue
restructuring of Volkswagen could come as a result, and that could be
good news for the company in the long one, despite the awful
headlines it has faced over the rigging of those emissions tests.
Now, the famous saying goes that "Everyone has a book in them,
and in most cases, that's where it should stay".
But for those who really want to pen a bestselling novel,
or even just collate their wedding photos into an album,
In 2006, Eileen Gittins launched Blurb.
It now claims to be one of the world's biggest
Before Blurb, amongst others, she worked at the photography
For Blurb, customers need to download software and from there,
they can compile their photographic book.
Popular books include wedding photo albums,
Blurb offers a cheaper alternative for book printing
than traditional designer/printer setups.
Customers can also order ebooks as well as, or instead of,
Earlier, Eileen sat down with me and explained how the publishing
industry is shaking off its traditional image.
About two years ago, we developed our own e-book products
and tools so that people could make e-books.
And honestly, I expected that by now,
print would be down and e-books would be on the rise.
What is happening, in our world at least,
When people buy e-books, they also buy some
print copies, and when people make a print book, they also
So are you a printing company or you a publishing company?
In a similar way, we are a technology enabled
We are a technology platform that enables people
like you independently to publish, and we
support the whole back end, the printing, the e-book output,
You can sell on Amazon, the whole nine yardss.
You founded a couple of tech companies.
You went through the bubble bursting.
It's been an incredible path to where you
Back in the day when I worked at Kodak, we were doing things
The company, as a public company, needed to keep those
And so it just couldn't let go of that film engine.
When we used to talk about Kodak, you were there
It was a company that invented digital photography,
and the company went, "It's not going to catch".
It was so frustrating to be sitting on technology that the world wanted
and needed, but the business model of the company,
being a public company, just could not
abandon the film-based business, because it was the cash cow.
At the moment when the market crashed and
the bubble burst, VCs, as you may know, held back.
They were like, no, we can't continue to invest
because the horizon for an exit, which is
their business model, looked like it was extending out
Nothing was getting out, nothing was going public.
Many of us had to shutter the doors, lay people off, try to keep
One of the things that happened from that that
informed Blurb was that when I founded the company,
One was, we needed to build something that people were willing
Not "If we build it, they will come".
Actual products that people historically were willing to pay
What other business stories has the media been taking
Anne Richards from Aberdeen Asset Management is joining us
The Times says the world is running out of oil storage. You don't think
about this. We are only out of space to put its because of this huge
supply glut. We have had this huge supply glut, and we have something
like 3.5 billion barrels worth of storage globally. And more than 3
billion of that is already full, so there is not much margin for error.
To put that in context, 3 billion barrels is more than one month's
total global demand for oil. So what happens if they all get filled up?
Do you build new storage or do you cut production? Nobody is prepared
to cut production. Well, if there is nowhere to put it, the cost of
storage will go up. There is talk of floating tankers, but some of the
highest cost producers will have to exit. This highlights the problem
with commodities at the moment. That has been reflected in the cost of
insuring against default for some of the big companies. We will hear from
Glencore and later with an update on what they intend to do as a result
of that slump in prices. And this is being repeated across the industry.
It is, because the cost of that default insurance for Glencore has
jumped noticeably. Part of the reason is that there is only a
limited number of ways to raise money. Selling assets- well, who
will buy? There are limitations. It feels like we are approaching that
crunch point at the bottom of the cycle. There is a nice story here. I
am a happily married man and I have no idea about Tinder. Me
neitherex-macro but I have heard stories. But I have never heard
about one for recruiting for jobs on Tinder.
Yes, a start-up founder has been using the dating site to get hold of
male chefs. She says it is purely for business purposes. She runs a
cooking company and she says it is better than using the official site,
LinkedIn. It is interesting how we see social media for personal stuff
beginning to meld into social media for professional stuff. LinkedIn has
always been professional. Twitter has moved from really personal do to
much more professional, corporate advertising. It will be interesting
to see if Tinder becomes commercialised in that way. But I
think we are talking about a couple of chefs. I am not sure if this is a
game changer. What attracted her eye was that they were wearing aprons. I
am not sure if that is a generalisation that can be taken
into other cases. The key to getting a job if you are a chef is to wear
an apron in any profiles. No, the key is what they were wearing under
the apronex-macro we can't leave the show on that note. We have more
time? Oval. So, the shoes? What about these 3-D printed shoes? This
is a fantastic idea. If you are female, shoes are pointy stock I
have never met a woman with pointy toed feet. So this is an idea of a
digital cobbler. Still you can take pictures of your feet in 3-D and
somebody will have to issue that fits your feet. And since I have
duck shaped feet, I think this is terrific. Next time you are on, show
us. Talking appointed feet, you have never met my wife. Thanks very much.
See you soon. It was another wet night across
northern England. In Cumbria, we saw 68 millimetres of rain in the space
of 24 hours.