Volkswagen’s blunder regarding an emissions scandal costing it about 11 million cars worth all over the world could mean the world for Germany. Analysts said it could mean a bigger threat to the Euro than the Greek economic crisis.
Volkswagen is Germany’s biggest automaker and employs the largest number of Germans. About 270,000 jobs for Germany come from Volkswagen. Suppliers have circled their business around Volkswagen as well.
Chief Executive martin Winterkorn had announced the admission of Volkswagen regarding the scandal.
He said a special software allowed the cars to minimize their fume emissions, helping them pass the strictest emission tests in the world.
Plenty of car owners may have their vehicles recalled due to the incident.
Once the Juggernaut of the German economy, Volkswagen could possibly drag the German economy into something larger than the Greek debt crisis. According to ING Chief Economist Carsten Brzeski:
“If Volkswagen’s sales were to plunge in North America in the coming months, this would not only have an impact on the company, but on the German economy as a whole.”
Volkswagen could face penalties up to $18 billion, which is more than its operating profit for 2014.
In consequence, the company may cut jobs, which could affect Germany’s entire economy.