Hello, this is world business report from the B.B.C. world service, I'm John b. three Volkswagen takes another financial hit over its emissions scandal.
As a senior every w.
Executive is arrested in Germany, they thought Volkswagen had put a lid on its liabilities linked to the scandal in the United States, and now it seems they haven't that the total is still going up, and that'll be a cause of concern also wear in Catalonia ahead of a referendum.
This weekend, which the Spanish government has declared illegal.
I want a ball, because I think people.
They want to say something to Spain and they want this doesn't want to listen and we close sets are colonising the red planet's we hear about entrepreneur, e. lon mosques plan was to blast us to Mars.
It's about believing in the future, and thinking that the future would be other than I can't think of anything more exciting than going up there, and being among the stars.
All that's coming up in the next half hour.
Now, it's been a pretty bad.
Twenty four hours for the German car giant Volkswagen on Thursday prosecutors arrested a senior Executive, of the V.W. group in Germany over the huge emissions fixing scandal that has engulfed the firm for two years now, and that scandal is set to cost three w. even more money.
This morning, it said it was putting aside another Three billion dollars to fix diesel engines in the United States, the B.B.C.'s business correspondent Theo leg gets told me more in the United States, Volkswagen has reach settlements with the Department of justice, with the environmental authorities with consumer authorities to compensate people for having illegal software on the cars and the inconvenience and the loss of value of their cars, and so on, but it does seem that the fix its been trying to put in place has proved more complicated than expected, so the amount of money has gone up.
The question that people within the investment Community will be asking is, why has this happened.
Now they thought Volkswagen had put a lid on its liabilities linked to the scandal in the United States, and now it seems they haven't that the total is still going up, and that'll be a cause of concern, and we also got news of the arrest of a fairly senior Member of the V.W. group in Germany.
What can you tell us about that.
Well, if he's the man who has been named in media outlets around the world, then it's very significant, we understand that the man who's been arrested.
We don't know if he's been charged or not, and the prosecutors won't officially name, but we understand he is Wolfgang hats.
Now, he was head of engine development at Audi between two thousand and one and two thousand seven, and then went on to develop engines within Volkswagen Itself before taking on a role as head of research and development.
At Porsche Porsche.
He was on the board, alongside mattis Mullah who now controls the whole Volkswagen group now obviously innocent until proven guilty.
We don't know if he's been charged, as I say, he hasn't been officially named, but if this is the man, we're talking about, then it suggests the prosecutors are setting their targets very height within the Volkswagen group, he would be by far the most senior person to have been implicated in the scandal, and he was a close confide and of the former Chief Executive Martin Vinter, corn, who had to stop step down when the scandal was at its height, so, so far, very few people have been charged in connection with the scandal, one man has been jailed a relatively junior engineer, who was jailed for fourteen months and United States, but Wolfgang hats, is a very senior Executive and that might suggest that prosecutors think the origins of the scandal went up much higher in the company than was first suggested, is there any sign.
This has been going on for two years now.
Is there any sign that this is denting sales for Volkswagen at all, or people going for competitors.
No, I think it's had a big effect on sales of diesel's not just by Volkswagen, but by other manufacturers.
One thing we do know is that sales of diesels have gone down, and that's partly because The scandal encourage politicians to take a very belligerent view towards diesels and talk about banning them in cities, and so on.
So diesel sales have fallen the Volkswagen sales have been actually very resilient.
Last month, they were up, I think nine percent year on year.
We don't know what, how pricing and other factors.
Discounts have affected overall sales, but as a company selling cars Volkswagen is still managing to sell a lot of cars.
This will knock its profits.
This latest three billion, they've got to set aside for events in the United States, but people will start still buy their cars.
If the price is right, and there is another factor here that this whole affair may have pushed Volkswagen more in the direction of electrification, which is where all the other car companies are going out, so it may have stolen a March on its rivals, almost by accident, b. b. sees Theo leg gets there, there'll be a lot of focus on Spain.
Over the next few days, because of a highly controversial referendum in the North East region of Catalonia.
Local officials are pressing ahead with plans for their vote on Sunday, against the wishes of the national government in Madrid, which says it is illegal.
Thousands of extra police have been sent to Catalonia, to prevent the vote going ahead, but thousands of Catalans are expected to take to the streets on Sunday, in defiance the B.B.C.'s guy hedge co has this Report from the region's capital.
Barcelona, it looks and sounds like just another election rally local people have turned out to a recreational park to hear politicians from the Catalan Republican left party speak preceeded by a bit of music, but on Sunday.
These Catalans want to take one of the biggest decisions in their region's history.
Whether or not to separate from Spain, I will vote in favour of independence, but it doesn't matter what I want it, what they think is that I want to ball because they think people, they want to say something to Spain and they want you hung this Spain, doesn't want to listen.
Zoe alkie Lanny is a Syrian refugee who fled his country's civil war, and settled in Barcelona, he's a volunteer for the pro independence cause and believe improved on for Annie if I need the point for, I thought, Annie go on thought me, it's freedom in a referendum in got to be Stan or in Scotland or in Catalonia.
Freedom is that the Spanish government deems the referendum illegal.
And it's in the courts have taken strident measures to prevent it from taking place.
Police have seized millions of voting slips and other electoral material most controversially, a dozen members of the Catalan regional government, were arrested for their role in planning the referendum.
And yet, Alfred Bosch, a senior separatist figure, says the referendum will take place surrounded by noisy campaigners, he tells me, he is also confident Of a victory for independence, perhaps second missions will be ideal, so maybe that will affect participation, but we are still going to consider valley, as soon as the results are a firm, they will be announced a sites with a validation of an international Commission end, then obviously within forty eight hours, there will be a proclamation of independent by the cattle, and Parliament, are you not worried about what's this whole process, the political tensions and possible independence could do for the economy of Spain, Catalonia there, we cannot vote that will hurt Spanish democracy, and that will hurt the Spanish Ella cattle and economy.
So, we believe that the best thing, the best solution, like in any other democracy is to lead people vote, that will be better for politics, they will be better for the economy.
Catalonia is two hundred billion euro economy is the biggest in Spain, it's driven by tourism and industry, and the port of Barcelona, where I am now is crucial to both, but the Spanish government has warned that the uncertainty surrounding the independence issue is starting to worry potential investors this river, yeah, a leader of a cattle and business group that opposes independent destruction of the Catalans economy is so ruled that it's so connected to the rest of the Spain in terms of banking them so far.
She been intervals from energy companies had said to depend so much on the Spanish market that creating any barrier in The legal, tax administrative political barrier will only cause Parliament's Edward actually forced many companies spacing Barcelona today to move their tax are fused attacks domiciled to the rest of the Spain therefore happy Catalonia's G.D.P. would literally sing the Catalan government says such pessimistic talking is totally unjustified.
And that's its economy would benefit from independence.
However, as Catalans demonstrate in the street against Madrid's efforts to stop Sundays referendum.
Everybody agrees that uncertainty is in the air.
The B.B.C.'s guy heads reporting there from Barcelona now Ryan, one of Europe's biggest airlines is in trouble.
Again, it's been accused of failing to be straight with customers about their rights after cancelling thousands of flights, Simon Calder is the travel editor of the independent, he's been telling me more, the background to this is something which began in exactly two weeks ago, when suddenly, I started getting people contacting me from airports across Europe, saying help Ryanair is just cancelled my flight.
It anything as little as half an hour's notice.
And as what's become known as pilot gate unravel still further, it turned out that, in fact, they were very serious problems with the rostering of pilots with allocating them leave.
And, as a result, we have seen the monumental number of twenty thousand flights being cancel between now and next Easter and on top of that, eight hundred thousand passengers whose travel plans had been wrecked.
So, now, what have Ryanair been told to do bears an Entitlement to cash compensation, in some circumstances, when your flight is cancelled at short notice.
But there's also the stipulation that the airline that cancels the flight must, it's the best possible solution for the passenger buy a ticket on a rival airline now when Ryanair told everybody that their flights have been cancelled.
They went out and said, O.K., you can have a refund, or you can have another Ryanair flight.
They neglected to offer the much more interesting from a passenger's perspective, much more expensive for um right there's perspective, option of travelling on a different airline at Briony's expense.
So I have deliberately been flouting the rules on this, do you think it seems to be, if you're being kind, you'd say it's a difference in interpretation, but actually devolved seem pretty clear the lead has been taken by the British aviation regulator, the civil aviation authority whose Chief Executive, and I came out to twenty four hours ago and said, I'm absolutely furious with the way that Ryanair has misrepresented the obligations to passengers, and they've come up with a whole list of deadlines by five P.M. British time on Monday, it has to provide the aviation regulate it with the text for an email that's going to be sent to the hundreds of thousands of ticket holders affected by cancel flights to or from the U.K. and that again, has to give people a full picture of their rights, and also, it's got to say, By the way, if you've already chosen full refund say, and you want to think again.
And there's also a line, which says that the airline must refund any out of pocket expenses of people affected by the cancellations and that could run into many millions of dollars, Simon Calder there from the independent, while on the line is Justin Urquhart Stewart, from seven investment management's who's been keeping an eye on the markets for us.
Hi, Justin, Hello, so Ryanair its share price has taken a little bit of a battering over the last few weeks.
What's it been doing today.
Well, again, you've got further bad news on the share price, but it is maisie how resilient.
It really is.
The problem is, of course, is that people have very short memories.
Despite if those people being caught up in it.
And we saw the same as British Airways, only a few months ago, people were swearing blind, that they will never fly that airline ever again.
And two months later, that's exactly what they're doing, plus the fact, of course, what if you don't have a choice, because Ryanair do fly to certain cities, the airport, N.C.P., sometimes anywhere near the cities, which often other airlines.
Don't so really, you end up stall back with them.
No matter how you find you dislike them.
After all, in the past, Ryanair, haven't exactly focused on service, and many people have no further themselves as travelling cattle class, but They still do it, but it's the price that matter on, sadly, Mister Leary Pistou right and just briefly Justin at the U.K. economy, some revised data show shows, it didn't do quite as well as we thought.
Earlier in the year.
Yes, it looks his figures are a slowing down of the figures here, we've got his, although manufacturing has been doing better at the figures are slightly too optimistic on that.
So, I think he's a general feeling that an overall confidence appears to be weakening as well, so you're seeing for business investment.
They were resting for twelve months, but not beyond why it's that b. word, O.K., Justin because Stuart from seven investment management.
Don't know which, Beware..
Do you mean.
Thank you for joining us the footsie one hundred at the moment up not point eight per cent at seventy three eighty one in new York to douse down a touch not point, one per cent at twenty two thousand three hundred and sixty, now it's that time of the week, when we look back at some of the big stories, we've been covering here.
Voters in Germany, give establishment parties, a bloody nose.
And now, Angela Merkel faces the tough job of forming a coalition if they're not to, if that's crispy, of course, will speak to the free Democrats in the Community, but also to the social Democrats, it's important that journey will have a good and stable government, the Canadian transport, make A bomb by the a. caught in an escalating international dispute as Canada and Britain protest over a massive hike in tariffs on imports to the U.S. could help must have repercussions, I was, they were a design or manufacture plant and in northern Ireland at that time was is that mark a firm called in the vow Goldie a Belfast Twitter offers double the space to some tweeters, but is less succinct also less effective for the end user.
When you scroll down if it's twice as long, you can consume half as much in that is a concern to me, I don't want it to take twice as long.
And so then Twitter experimenting with doubling the length of her tweets, the U.S Department of commerce slapped a big tariffs on the import of a type of injured plane made by Canada's bombard y. a., which has sparked an international row, plus the results of the German election, which give Angela Merkel a fourth term as Chancellor, but do leave her weekend.
It was a really dismal performance for Angela Merkel her centre right party suffered its worst election result since nineteen forty nine, you could put that down to Merkel fatigue after twelve years as Chancellor, but Merkel also admitted that she didn't do enough to Address concerns about immigration, but in some ways, the year you could argue that the result shows how tolerant, Germany, Merkel allowed a million migrants into the country in twenty fifteen you could look at that and say, actually only twelve and a half per cent of the population voted for a far right party and under the circumstances, perhaps you might have expected more.
The vast majority of Jenna people still voted for far more moderate parties, but at the same time, you can't ignore it.
This will be the first time that a far right party has been in the Bund, a stag since world war, two, they may not be in a coalition with Merkel, but I think it could influence the discourse.
Yes, Justin Fox in new York, how are these results in Germany being seen on that side of the Atlantic.
You know, the U.S. these days are so obsessed with its own political issues that there hasn't been a whole lot of notice being taken and in the thing that really strikes me this germinal action, the French election earlier this year, the Dutch election earlier this year, is beyond the issue of these, he had, Hey, immigration parties making gains.
It's just that.
Any party that's in the government losers seats, it was pretty much the same in the Dutch elections in the French elections, so there is just this tenancy among voters of whoever's in there with her arm out, which doesn't Seem why it works long term.
O.K., let's move on to our second story for you came Canadian governments have protested strongly after the U.S slapped tariffs on the sea series plane made by the Canadian company bombarding this was after a complaint by bowing in the U.S that the production of this sea series had received big public subsidies and was therefore anti competitive, the wings of the plane are made in northern Ireland, this could put thousands of jobs fair at risk and Justin Fox, this is protectionism on the part of the U.S. or do you think what the Department of commerce has done here is fair, who knows what's fair airplane making, there is some element of government support for all the big jet makers, I think, bowling's rate.
I mean, what would happen with bamboo.
This maker of business jets.
Mostly, they are on their jet.
They have their own series, the Challenger jets, they decided to get Ian to sort of mid to low size commercial jets, and they spent billions of dollars on it, it was delayed by a year as they didn't sell any at first in the busy were about to go under in tell the government of caback bailed them out, so he's a very clear case of government support here, but it was a bill out to save the company.
Basically, and so I think what everybody, sort of wondering as white Boeing's em gamers, because if They push this too far and then obviously a lot of countries where airlines by Boeing jets are going to start cracking down on buying buying just don't see how that's helpful for buying, Rebecca, Ben, what do you think.
Perhaps you can comment on the politics of it here in the U.K because Prime Minister Theresa may have spoken out strongly on it.
She is reliant on the d. u. p. in northern Ireland for her government at Westminster, to be able to govern and a D.U.P. is very strong in these areas where these on by the a. plants are, it's undoubtedly a major headache for the Prime Minister, because there is this plant in northern Ireland, it employs around four thousand people to produce the aircraft, those jobs could be at risk.
And, like you say it's more complicated because may's government is propped up by the Irish Dean p. she doesn't wanna risk upsetting them.
She needs them to pass legislation, but at the same time, very soon, we're going to be in the Middle of trade negotiations with the U.S. and we need a good brakes, it deal with them.
So she doesn't want to risk upsetting, Donal trumpy that it, it is a bit of a slap in the face, because she personally brought up this matter with Donald trump in a recent visits, and that you know the questions as to whether she really has the clout to negotiate trade deals.
If she Can't negotiate this successfully, how're we going to progress.
After we've left the European Union, Oh, Kay, let's get on to our final topic, then for today, and this is Twitter experimenting with sweets that are two hundred eighty characters long double what they are, at the moment, we need more characters in our tweets Justin Fox, I think, the big question is, do we need tweets Twitter is just struggling with nothing's making it grow.
It's big, and it's important among journalists, it's clearly very important to the President, but it's not going anywhere.
And so there are mucking around with her, O.K., well, let's try this, and I think it's that big a deal.
Since her early lats have ways to shove more information into a tweet.
Anyway, you can take a picture of a bunch of words, which is what I do a lot more.
A lot of other people.
I mean, obviously there was there's something nice about that really short one hundred and forty character limit that they've now, and you could you read some of the people who've already got their limit, up to two aid that Colonel long, but I don't think it's that big a deal.
Either way, the whole point of Twitter its reason for being almost, and what makes it distinctive from other platforms like Facebook, is it forces users to be concise and yes, the one hundred and forty character limit, maybe arbitrary, but it keeps the whole Format lively paste and funny, and a lot of people say, can already created thread to express longer ideas or there are various ways to work around it.
I think there are bigger issues, the Twitter Twitter has lost money every quarter since it went public in November twenty thirteen, it's losses.
Why didn't in the second quarter.
So ultimately much bigger challenges for Twitter than the character lank Rebecca burn of the wall street Journal in London and Justin Fox from Bloomberg view in new York Spaceman by Babylon. c. they're giving you a bit of a clue about what our final item might be.
Imagine being able to fly anywhere on earth in under sixty minutes does that sound unlikely.
Well, the entrepreneur eel on musk isn't shying away from the challenge, he thinks he can develop a rocket.
It might be called the big effort rocket, which can connect any point on earth in next to no time, and he's not stopping there, it'll also be possible to fly people to other planets.
He says, Mars is reachable by twenty twenty four, fundamentally, the future is vastly more exciting and interesting if we are spaced ranks.
I was Asian and a multi species that if we not you want to be inspired by things you wanna wake up.
And what do you think the pieces can be great, and that's what being a space prank solutions or bow, it's about believing in the future, and thinking that The future would be, other than the past, and I can't think of anything more exciting than going up there, and being among the stars.
That's why il en mask unveiling his plans at a conference of space experts in Adelaide in Australia.
Well, Professor Alan Duffy from Swinburne University of technology in Melbourne was in the audience was impressed you'll own mask when he speaks does tend to make a believer out of you.
It is a bold vision, and I do suspect the time line, I'd slip.
I don't think we'll see the new rocket taking us to Mars, and in five years, as he claims, but I do hope to see this d. f. a big Rockit, he's, he was very polite, I like that, that it is something that can change the way we access, not just a local environment, the moon and, ultimately, but he relished the opportunity that you could take a rocket go up to space make half an orbit of the earth, and then come back through the atmosphere to your destination.
So perhaps you take.
New York to Shanghai or London to Sydney or within sixty minutes or less in terms of the technology that's, he and his company space sex will be developing you were convinced that they are on the right lines in terms of what it is going to take to send this rockets to Mars.
It's feasible that a private company could build a rocket larger Then five there, but took the Apollo astronauts to the moon, I think they can do this, I think they can also land it.
And, as a result of reusing it drastically reduce the costs.
What I'm not sure about is whether anyone would survive.
The trip to Mars.
It's not clear that space x. is cut out create the radiation shielding all medicines required to keep a crew healthy and alive.
A lot of it is about the cost, though, isn't it.
I mean, he seems to be saying, we have found a way of making the developments of all this cheaper, therefore, more accessible, arguably, and this is where the success of it lies in being able to develop it at a relatively low price.
Yeah, that's right, Ian on has often referred to idea of making rockets like aeroplanes.
The reason that we can afford to fly, France, London to Australia's, because it's the aircraft is re used at the end, we don't just scrap the seven forty seven, we refuel, and we take off in the same way rockets, instead of these vastly expensive piece of equipment, just being thrown away at the end of a single mission.
If instead you can land them refuel them, you can reuse, and that's exactly what space x. has done in the last couple of years, ultimately, is the only way to drive the cost on well as unclaimed tweet that followed the cost for a flight one Side of the earth from the other to do it in about forty minutes on the b. four would be the same price as before, fair economy.
Take it on a plane, and I just struggle to imagine a higher, they can get cost on that level, but if they can, they really, we'll have to change the nature of exploration, not just of our earth, whatever, and higher solar system, and that really is an amazing moment in history.
If they can achieve a very enthusiastic Professor Alan Duffy from Swinburne University of technology in Melbourne on that speech by musk given earlier.
Well, that's it.
For this edition of world business report.
Don't forget you can always find a podcast of this programme online, just go online and search for b. b. c. world business report.