Beleaguered BMW Profits Nosedive As Collusion Mounts Over Diesel Death Machines
BMW isn’t having a great first quarter, sales have slowed in key markets causing a first-quarter profit nosedive. Allegations of emissions collusion are expected to cost BMW and an additional $1.6 billion in fines if the prosecution proves successful. The European anti-trust commission has found evidence of BMW colluding with Daimler and VW to limit the introduction of new emissions technology.
The collusion between Germany’s automotive cartel is as ridiculous as it sounds. BMW, Daimler and VW agreed not to engineer and develop the best and cleanest emissions technology.
This gentlemen’s agreement allowed BMW, Daimler and VW to sell the same emissions technology for as long as possible. That is to say to make as much profit as possible. After all, new technology costs money to develop.
The automotive trio have been colluding on emissions technology since 1990. In the UK, a 2014 study revealed that toxic diesel emissions were responsible for 14,000 premature deaths in 2014.
Additionally, BMW also posted an operating loss for the first time in 10 years. Increased spending on equipment, upgrades, property decreased earnings by 36 percent.
The company expects second-quarter profits to increase but the overall news saw shares fall by 1 percent after the stock markets opened.
But expectations of brighter second half of the year might be furloughed if Donald Trump’s threats to place more punitive tariffs on Chinese imports come into effect.
BMW makes SUVs in the USA and exports them to China. China will simply follow suit with retaliatory tariffs on American imports.