Fed's Dudley (dove, voter): It is possible that liftoff conditions may soon be satisfied; risks of moving too fast or too slow are balanced right now
- international outlook appears like less of a problem that it was a few months ago
- economy is likely to continue to grow at an above trend pace
- manufacturing sector will likely lag behind the rest of the economy
VW shareholder calls for removal of chief executive Müller
One of Germany’s leading investors has called for Volkswagen to replace its newly appointed chief executive and chairman, saying only outside leadership can restore trust in the scandal-hit carmaker.
VW replaced its chief executive just days after it admitted cheating on US emissions tests, but the new leader, Matthias Müller, has been at the VW group for almost 40 years. The company’s new chairman Hans Dieter Pötsch had been finance director for more than a decade.
Ingo Speich, a senior portfolio manager at Union Investment, Germany’s third-largest asset manager, told the Financial Times that both choices had further damaged confidence in the company.
“It would be far better to have new, fresh people in the management board and the supervisory board to gain back trust from the capital markets,” he said.
Union Investment is a top 15 investor in VW’s preference shares with a 0.5 per cent stake. It manages €250bn of assets in total.
Mr Speich’s statement is the most vocal intervention from a shareholder in the two-month-old scandal and reflects increasing market dissatisfaction with the German carmaker. VW shares have dropped 70 per cent since US regulators accused the carmaker of cheating on emissions tests.
“It’s all about trust. From the capital market’s point of view the company is not communicating well and there is a lack of trust . . . We are disappointed by the personnel decisions VW took and the information they provided,” he added.
Investors have been frustrated with what they see as minimal communication from the carmaker over the 12m cars affected by twin scandals into nitrogen oxide and carbon dioxide emissions.
Many have focused on the supervisory board, where only one of its 20 members is independent from the company and its shareholders. Mr Pötsch’s nomination as chairman last month drew heavy criticism from many minority investors.
But Mr Speich is the first large shareholder publicly to turn his fire on Mr Müller, who headed the Porsche brand before being charged with leading VW out of the scandal.
“Mr Müller was part of VW before. In addition, he was head of Porsche and Porsche also used diesel engines. OK, of course, they were from the VW brand but he is also involved in this case,” Mr Speich said.
Mr Müller, who is trying to improve the company’s culture after complaints that his predecessor Martin Winterkorn ran the carmaker like a dictatorship, is seeking to encourage internal whistleblowers. New guidelines likely to be published very soon will offer impunity to workers that come forward.
The guidelines come after one VW worker gave information to the internal investigation into the scandal that led to the disclosure that the company had understated the CO2 emissions on 800,000 cars and exaggerated their fuel efficiency.
Mr Speich said VW should follow the example of Siemens, which reacted to a bribery scandal in 2006-2007 by appointing company outsiders as chief executive and chairman.
VW did not immediately comment.
Aviva Examines Sale Of Irish Health Division
Hedge fund titan Bill Ackman has news for billionaire investor Warren Buffett: Coke is bad for you.
In addition, the activist investor claimed on Wednesday, it has “caused enormous damage to society.”
But what about Oreos, Bill?
In what is turning into something of a sugar slugfest, Ackman and Buffett’s Berkshire Hathaway have traded insults over whose portfolio is more toxic to society.
“Coca-Cola has probably done more to create obesity and diabetes on a global basis than any other company in the world,” Ackman said Wednesday at a New York City symposium held to mark Berkshire’s 50 years under Buffett control.
Coke, Ackman said, has “displaced the water that children and adults consume with sugar water.”
His comments were nothing less than a sharp rebuttal to harsh words from Berkshire’s Charlie Munger, who earlier this month called Ackman’s troubled investment, Valeant Pharmaceuticals, “deeply immoral.”
Valeant has not been accused of selling anything that harms people, Ackman pointed out.
Jublia, one of its most well-known drugs, treats toe fungus while avoiding the dangerous side effects of oral medications.
Munger’s comment referred to Valeant’s policy of jacking up prices on the drugs the Canadian company buys. His words mirrored the scrutiny of the pharmaceutical giant that continues to roil the stock.
The verbal imbroglio over less-than-healthful foods and pricing policies is ironic because Ackman owns stakes in Burger King and Tim Hortons. Berkshire owns stock in Dairy Queen and See’s Candies.
It’s also a bit strange because Ackman is a fan of Buffett’s and earlier this year was nicknamed “Baby Buffett” for his own investment style.
But on Wednesday, Ackman was in full attack mode.
Munger has also laid out a Coke business plan to “flavor and improve” 25 percent of potable water worldwide, then use “conditioned reflexes” to lead consumers around the world to drink it.
Each additional soda consumed increases the risk of diabetes, heart disease and other chronic conditions, Harvard researchers have found.
But taking on Buffett’s investment in Coke inevitably raises the issue of Ackman’s stake in snack makers like Mondelez, which sells Oreos and other sugary products around the world.
Ackman, who likes to say that sugar is poison, quickly acknowledged his investment in Mondelez — but said it is “OK to have a chocolate bar or Oreo cookie” once in a while. “It’s a treat.”
Mondelez, he contends, doesn’t suggest that Oreos can replace a dinner of grilled chicken.
A recent study, however, found Oreos to be addictive to lab rats.
Coke, in a statement, called Ackman’s comments “irresponsible.”
Kohl's on Conference Call; Stock trading up approx 8% in pre-market at $46
- Comp sales increased 1%- 'We have effectively reversed a downward sales trend we were experiencing before we introduce the Greatness Agenda last fall'.
- Average unit retail increased 50 basis points to +2.8% (Q2 +2.3%)
- Units per transaction increased 1.3% (Q2 -1%)
- Average transaction value increase of 1.8% (Q2 +1.3%)
- Increases were offset by 80 basis point decrease in transactions per store.
- Footwear and women's performed; Men's was generally in line; children's accessories and home perform below the company.
- Southeast was the strongest region and the South Central was the most challenging particularly in Texas. All the regions were generally consistent with the company. Gross margin decreased slightly for the quarter down 10 basis points. Flat year-to-date.
- Reiterate expectations for a low single digit increase in inventory in the back end of 2015 and a mid-single digit decline in 2016.
Early premarket gappers
Gapping up: ANGI +11%, KSS +10.6%, NTES +6.6%, NEFF +6.5%, PLKI +5.6%, MNKD +5.4%, NCR +4.3%, YELP +2.3%, HIMX +2.3%, ALU +1.8%, NOK +1.5%, HSBC +1.2%, SFS +1%, RLH +0.6%, HP +0.6%
Gapping down: DGLY -24.8%, AEG -7.5%, NBG -6.8%, AAP -6.5%, SHLX -4.6%, MT -4%, FLO -3.6%, AU -2.7%, HMY -2.4%, FCX -2%, PIRS -2%, VALE -1.5%, GFI -1.3%, BHP -1%, SVA -0.8%, JBLU -0.6%, AA -0.6%