Volkswagen is looking to cut costs and boost cash flow and could sell more shares if the cost of clearing up a scandal over its rigging of diesel emissions tests put its credit rating at risk.
It's a crisis scaling new heights by the day. Volkswagen looking at ways to cut costs and boost cash flow, as the diesel emissions scandal threatens the company's credit rating. Share sales may be one option. But asset sales are reportedly off the table for now, although the company may be left with little choice if its position deteriorates further. Charles Stanley's chief economist is Jeremy Batstone-Carr. (SOUNDBITE) (English) CHARLES STANLEY CHIEF ECONOMIST, JEREMY BATSTONE-CARR, SAYING: "If the company ends up having to be fined in excess of that which it can find from its own resources, well then it may very well be that it comes to asset sales. I think that that would be very sad but one can't rule it out." New analysis suggests the savings made by Volkswagen were hardly worth the pain it's now enduring. Rigged testing may have only saved the company an estimated 4.3 billion euros over six years. Reuters Breakingviews columnist Olaf Storbeck has been crunching the numbers. (SOUNDBITE) (English) OLAF STORBECK, REUTERS BREAKINGVIEWS COLUMNIST, SAYING: "So if you compare the 4.3 billion euros Volkswagen has saved by skimping on clean emissions technology to the more than 25 billion the company has lost in market share over the last two weeks, it shows that cheating really didn't pay." The estimated savings are also dwarfed by the 6.5 billion euros Volkswagen has set aside to pay for the scandal. The carmaker has now imposed a hiring freeze at its financing arm, and cut a shift at a German engine factory. Two sure signs the car maker is steeling itself for gloomy times to come.