Standard & Poor's downgraded Volkswagen's rating on long-term debt Monday, and said the company's diesel scandal indicates poor management. The financial agency further warned that its debt rating could be cut further if the automaker doesn't immediately address the deepening scandal, Bloomberg reported (via Automotive News).
"VW has demonstrated material deficiencies in its management and governance and general risk-management framework," Alex Herbert, a London-based analyst at S&P, said according to Bloomberg. "VW's internal controls have been shown to be inadequate in preventing or identifying alleged illegal behavior." Further damage and other violations ""represents a significant reputational and financial risk."
Volkswagen's credit rating could severely impact how the automaker raises capital to help pay for its growing and deepening crisis that it sold 11 million cars with a "defeat device" to cheat emissions.
Separately, German news agency Handelsblatt reported Monday that Volkswagen is asking its suppliers to cut their costs by €3 billion ($3.4 billion) to help the automaker save money to help pay for the scandal. The paper reported that the scandal could eventually cost Volkswagen €40 billion ($45 billion) after fines and fixes.
Volkswagen already said it would set aside in the third quarter €6.5 billion ($7.4 billion) to help pay for the scandal.
The post Volkswagen Debt Downgraded; Company Asking For Supplier Help appeared first on The Truth About Cars.
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