CARS
Another emissions scandal? Mercedes-Benz parent Daimler opens probe
USA TODAY9 minutes ago Daniel Maurer, AP
Daimler, parent of Mercedes-Benz, says it is being probed over emissions issues
German automaker Daimler, parent company to the Mercedes-Benz and Smart car brands in U.S., says it is conducting an investigation into how it certifies its emissions at the request of the U.S. Department of Justice.
The disclosure comes as another German automaker, Volkswagen, deals with fallout from its disclosure that it added software to its diesel-powered cars to allow them to cheat in emissions testing. But Daimler's report didn't focuses just on diesels, but its emissions program in general.
"Daimler is cooperating fully with the authorities. Daimler will consequently investigate possible indications of irregularities and of course take all necessary actions," the disclosure said.
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Daimler says it received the request in April 15. It is required by German securities laws to disclose such requests and put out a statement that says it was asked "to review its certification and admissions process related to exhaust emissions in the United States by way of an internal investigation."
But here’s what’s been missed. The company isn’t in debt. On the contrary, according to Thomson Reuters, the balance sheet shows that Mitsubishi Motors has about $2.2 billion in spare cash, and short-term and long-term investments on its books. And cash doesn’t lose value (not like this, anyway).So the net paper value of the company has actually just collapsed from $5.6 billion to about $3 billion. And that really doesn’t look like much for a company that made $1 billion in gross profit on $5 billion in revenue in its last fiscal year.
Akira Kishimoto, an analyst at J.P. Morgan,told clients that the scandal could end up costing Mitsubishi $450 million in recalls, replacements and compensation. The actual decline in the company’s paper value is already five times as much. Or, to put it another way, the $2.5 billion plunge in Mitsubishi’s paper value works out to at around $4,000 for every car affected. With gasoline currently selling for about $3.60 a gallon in Japan, it means the company could give each affected customer a voucher equal to 1,100 free gallons and still break even.
I don’t know how much the fuel efficiency of the cars was overstated, but 1,100 gallons is a lot of overstatement.
Daniel Maurer, AP
