10/12/2015 BBC Business Live

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.