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German Officials Declare VW Too Big To Fail

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On: Fri, Oct 16, 2015 at 2:11PM | By: Carl Malek

German Officials Declare VW Too Big To Fail

With the Volkswagen diesel emissions scandal now reaching a crescendo in terms of fines and legal penalties, German officials have been hesitant to issue any form of criticism against the automaker with some even showing their support by revealing that the company is too big to fail. This statement was a recurring theme during the Great Recession, and it appears that VW's current dilemma has obviously raised alarm among some members of Germany's government who do not want to see one of its biggest corporations buckle under the financial and legal pressures imposed by the emission debacle.

Like the American big three automakers—GM, Ford, and Chrysler—Volkswagen is a key part of the country's automotive industry; it employs 15 percent of Germany's population and is also deeply entrenched in the overall landscape of the country due to its strong connections in the labor force as well as how the company was initially founded. This profound feeling of support was highlighted in a report released by Reuters which revealed that Lower Saxony Premier Stephan Weil called the company "a pearl of German industry", while claiming that its legacy is shining as bright as ever. This falls in line with recent statements by German Chancellor Angela Merkel urging Volkswagen to conduct an expedient transparent investigation into the circumstances and overall timeline of the emissions scandal.

However, there are some analysts that suggest that the German government has a "blind spot" for one of its biggest domestic firms, with a few of them even suggesting that select government officials were well aware of Volkswagen's illegal activities regarding the installation of the defeat devices, but did little to nothing to address them. It will be interesting to see this saga unfold, and whether any criminal investigations will be done by the German government to determine if there was indeed wrongdoing at the government level by select officials, especially in their equivalent to the EPA in the U.S. For its part, the German government did not issue a statement on these allegations, but look for them to become more of a focal point when the full impact of the scandal is assessed by regulators.


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