Business Stories of the Week: April 14

by April 14, 2017
The German automobile maker Volkswagen is left with hundreds of thousands of cars with faulty emissions software. Volkswagen has been ordered to buyback the cars after a years-long scheme to evade U.S. emissions tests using rigged software.

Volkswagen is left with hundreds of thousands of cars with faulty emissions software after being ordered to buy back the vehicles. (Volkswagen photo courtesy of Pexels).

United lands in hot water

Less than a month after United Continental CEO Oscar Munoz was lauded by trade publication PR Week as its communicator of the year, the executive is being accused of fueling a massive public-relations disaster, The Denver Post reported on Thursday. Earlier this week, United crew members asked a physician to get off a flight to make room for an airline employee who needed his seat. When the passenger refused, police forcibly dragged the man from his seat and injured him enough that he required hospitalization. Munoz initially said the crew had to “re-accommodate” the passenger. He also called the customer “disruptive” and “belligerent” in an internal letter to employees. Some social media users called for Munoz to resign, and others called for a boycott of the airline. United shares dropped after the news, and the passenger (who suffered a concussion, broken nose, and lost two teeth) has said he will file a lawsuit.

CME closes London exchange

On Wednesday, Crain’s Chicago Business took a look a Chicago-based CME Group’s decision to shut down the company’s beleaguered London-based futures exchange by the end of this year. CME Group is the world’s biggest futures exchange operator. While trading on CME’s global platform has grown, the company struggled to attract business from other venues (where volume tends to be more robust) for its London-based clearinghouse.  CME Group said that while European markets remain important, traders prefer the company’s “global products, deep liquidity and greater capital efficiencies” through its U.S. infrastructure.

Volkswagen has a full lot

After Volkswagen’s scheme to cheat U.S. emission laws, the German automaker agreed last year to buy back about 500,000 diesels with rigged software if it can’t figure out a way to fix. Now, VW is left trying to figure out what to do with hundreds of thousands of cars with the faulty software, Bloomberg reported on Sunday. Thousands of VW owners are selling back faulty Jettas, Golfs, Passats, Beattles, and Audi A3s for as much as $40,000. While the company determines whether it can fix the cars, VW is hauling them to storage lots in Detroit, Port of Baltimore and a decommissioned Air Force base in California, Bloomberg reported.  It could be a long wait. As of right now there is no clear fix. In the meantime, buy backs will continue until June 30, 2019, the deadline for VW to buy back or fix at least 85 percent of the rigged diesels. If it fails, the automaker must pay the Environmental Protection Agency a hefty fine.

Trump shifts his economics

After lambasting China for currency manipulation, pledging to eliminate the Export-Import Bank, and accusing the head of the Federal Reserve of political bias, President Trump appears to be shifting to the center on some economic issues. In an interview on Wednesday, the president said he no longer wants to eliminate the Export-Import Bank and that he may reappoint Janet Yellen as chairwoman of the Federal Reserve when her term ends next year. After meeting with Chinese President Xi Jinping, Trump also said he no longer wanted to label China a currency manipulator. The New York Times dug into what’s behind Trump’s shift and suggested moderate financiers are overpowering Stephen K. Bannon, his populist political strategist.

Uber continues to mess up

In the ride-sharing company’s latest fumble, the New York Post reports Uber used a software program called “Hell” to spy on drivers at rival Lyft. The article appeared on Thursday, explaining that tech news site Information discovered a secret program that tricked the Lyft system into revealing the availability and location of its drivers, as well as the prices being charged for trips. Earlier this week Uber’s head of public relations resigned.

Rolling Stone says sorry

NPR reported on Wednesday that Rolling Stone magazine and Nicole Eramo, a former University of Virginia associate dean, had reached a confidential settlement over a 2014 story about an alleged gang rape on campus. NPR goes on to note that the settlement was “amicable.” This follows a motion to vacate the initial judgement that the magazine filed in November. In that judgement, Eramo was to receive $1 million from the publication and an additional $2 million from the author of the subsequently retracted article, which portrayed her as insensitive to the alleged rape victim.

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