Here in Israel, we may be complacent about Volkswagen's troubles, but it's likely that you are affected (even if you don't drive one of these vehicles). This scandal is not related to faulty parts or bad workmanship. Volkswagen has admitted to fraud in its US diesel vehicle software, which detected the periodic, stationary gas emissions check at official vehicle testing stations (the 'test'), lowered power and performance and, thereby, lowered the emissions readout accordingly. After the check, the vehicle's emissions returned to their 'normal' high levels to provide better vehicle performance on the road. The number of vehicles of Volkswagen and its subsidiaries worldwide is 11 million. Ironically, the fraud was detected by two testers who took a Volkswagen car on a long road trip to do research, checking emissions along the way, intending to show American manufacturers that they could make more emissions-effective automobiles.
Globes reported on Friday that Volkswagen shares had dropped 30%. Here in Israel, investment institutions holding Volkswagen shares were also affected proportionately, and you were too if you held Volkswagen shares or had Volkswagen shares in your mutual funds. It was reported that Altshuler Shaham is the biggest loser (NIS 41m on paper) including its mutual funds, but other well-known investment houses (Migdal, Psagot, etc.) were also affected.
Of course, everyone was surprised by Volkswagen's fraud. But that is what happens when there is no real, independent, systematic audit of private enterprise, leaving companies, whose bottom line is their major interest, to audit themselves. So, don't be surprised when the next big corporate fraud splashes into the headlines.
By the way, the nutrition data on our food product labels is also provided by the food manufacturing companies themselves. I wonder when this data will be subject to independent testing. But that's another story.
Globes reported on Friday that Volkswagen shares had dropped 30%. Here in Israel, investment institutions holding Volkswagen shares were also affected proportionately, and you were too if you held Volkswagen shares or had Volkswagen shares in your mutual funds. It was reported that Altshuler Shaham is the biggest loser (NIS 41m on paper) including its mutual funds, but other well-known investment houses (Migdal, Psagot, etc.) were also affected.
Of course, everyone was surprised by Volkswagen's fraud. But that is what happens when there is no real, independent, systematic audit of private enterprise, leaving companies, whose bottom line is their major interest, to audit themselves. So, don't be surprised when the next big corporate fraud splashes into the headlines.
By the way, the nutrition data on our food product labels is also provided by the food manufacturing companies themselves. I wonder when this data will be subject to independent testing. But that's another story.
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