Globe. In a statement ceo Martin Vinterkorn said he was shocked by the events of the past few days. The scandal has pressured the stock which is down more than 30 over the past few days. It has prompted investigations and lawsuits. Phil lebeau has our report on the resignation of volkswagens ceo. Reporter the crisis involving rigged diesel emissions has claimed its first executive. Martin vinterkorn has resigned saying he didnt knowingly do anything wrong. But the vw board said it may be possible there are criminal proceedings involving executives at the automaker. Meanwhile vws board will choose the next ceo on friday. Herbert diest, mathias mueller, and rue better stiller are considered frontrunnerers. Their job will be to stabilize an automaker who has admitted it screwed up and sold clean diesel cars that really werent clean. In fact, the epa says almost 500,000 vw diesel cars hive been out on the road emitting up to 40 times more pollution than allowed. Consumers feel duped. I think its appalling, honestly. I was shocked. The fact that they would put software in to cheat the smog testing is unbelievable. I dont think id buy a vw any time soon. Before i thought of hem as the peak of the peak of automakers, really great, very trust worthy, good quality cars. Now im just i dont know what to think. Reporter that ainger may leave some buyers to go after the automaker in class action lawsuits. Meanwhile, volkswagen in the face of federal and state investigations has hired the law firm of kirkland sxel leand ell same law firm that represented bp during the gulf oil spill. Analysts are trying to determine how this scandal could potentially impact other areas of the auto sector. Bank of America Merrill lynch says auto suppliers that have the greatest exposure to volkswagen have the most at risk. The firm says board warner, delphi, genteg, and magna could see earnings pressure in the event of a material decline in volkswagens global business. And those stocks all finished lower today. Did if we see a big drop in volkswagens business what will it mean overall for the Auto Industry and could it hurt Economic Growth in germany or europe . Jack narad is executive editorial direct and market analyst at kelly blue book and joins us now. Good to have you with us. I dont mean to minimize this but General Motors in the wake of the ignition scandal and toyota in the wake of the sudden acceleration issues that it confronted a few years back, their profits have never been higher. Their sales have been very good. Why should we expect volkswagen to suffer because of this . Well, i think the big issue here is the disarray of the management. I mean, here youve got potential criminal proceedings, youve got the ceo resigning in the midst of this. A lots going on that could make this a bigger story. Thats my concern about volkswagen. More so than the fines theyre going to have to pay and the compensation theyre going to have to put out to owners on this. Its what does this do to management, what does this do to their overall brand image globally . What impact might it have on Economic Growth in germany in particular, if any at all . Well, significant Economic Growth. Because volkswagen is a major, major employer in germany. Germany of course is the anchor of the european union. And keeping the euro afloat, essentially, and has done so the past several years as weve seen crisis after crisis on the euro. Anything that softens the German Economy can have a bigtime trickledown effect throughout western europe. Theyre going to stop selling the diesel motors apparently at least until they get a fix in place. That is not a huge part of their business in the United States, only 3 or 4 of vws revenue comes from u. S. Sales or sales here in the United States. But how damaging is this likely to be overseas . Are we going to see less foot traffic in dealerships, fewer sales . How dramatic . I think initially were going to see the volkswagen loyalists be the ones who are the most hurt by this. The most taken aback by it. And a lot of people look at volkswagen as being a different kind of car company. But not this kind of different and they dont want that to happen. Theyre buying volkswagen here kind of as an antibig company purchase. And thinking that volkswagens have been more environmentally conscious than most grands. So this fly in the face of that. And does so globally, as a matter of fact. Which brings us to the epa. What about regulation . Now were seeing broadening investigations in california specifically, theyre going to be taking a look at different brands. Do you think that this is wider than just vw . And do you think that we will get more regulation as a result of this incident . Well, i think well both get more regulation and more stringent enforcement of current regulation, and maybe more of the latter than the former. In a lot of instances, the auto manufacturers are selfpolicing. Certainly theres an audit function that epa does. Car companies arent just certifying themselves and going on off about their business. But there is somewhat of a cozy relationship between epa and the auto manufacturers. Generally thats a good thing. Theyre sharing information, theyre working things out to the betterment of the industry and the consumer. But in this instance, when epa is obviously circumvented by some technology that, you know, essentially is deceitful, then that whole game changes. And i think were going to see much more stringent enforcement of epa rules Going Forward. Jack, thank you very much, kelly blue book. Chinese president xi jinping was in seattle today for day two of his nearly weeklong visit to the United States. After a policy speech last night, president xi met with Many American ceos. This all before he heads to the white house tomorrow. Michelle carusocabrera is in seattle with more on what todays meetings are about and what participants are hoping to achieve. President xi, thank you for being here. Reporter economic diplomacy in seattle today. As chinese president show jinping toured boeing headquarters. Executives announced china would purchase 300 new planes. Also two separate meetings with dozens of american ceos. In the morning warren buffett, gms mary berra, apples tim cook, to name a few, at a roundtable organized by former treasury secretary hank paulson. Echoing what he said in a speech last night president xi told attendees hes aware of the Economic Risks and challenges and steps are being taken to address them. He said china can maintain a high rate of growth for a long time to come. Honeywells ceo told us before the meeting he would raise a number of concerns. Staterun Enterprises Need to become more open. They do open of their air space. If you try to fly through china, theres a huge swath you cant fly over. Reporter the ceo of dow chemicals spoke after the meeting and said Cyber Security was topic one. Commercial attacks on Companies Like ours are real. Theyre real and theyre from china. Okay . The chinese can no longer just turn a blind eye to that. Its the government attacking you . Im not going to give you that information but theyre coming from china. Were working with all the governmental authorities. Companies of hightechnology capabilities like ours, our number one, two and three concern right now. The appropriate amount of strength and resolve out of our u. S. Government is appropriate. Did he address it enough for you here today . Certainly the beginnings. Ip signer was mentioned in his remarks. Yes, awareness is high. Whats going to happen out of awareness . The rubber has to hit the road on that one. Reporter in the afternoon another meeting with ceos at microsoft headquarters. This a larger group of attendees, also much more secretive. The focus, the thorny topic of the internet and rules china reportedly wants to impose on Foreign Companies which would give the government access to their data. The chinese president leaves tomorrow for a state visit at the white house where hell have more than one meeting with president obama. The agenda there, some kind of cyber accord, akin to the Nuclear Accords of the cold war. Though theres a lot of skepticism about whether or not that can be achieved. For nightly Business Report, michelle carusocabrera, seattle. Over night more weak Economic Data out of china. A preliminary measure of chinese factory output in september the lowest since the financial crisis. The measure fell to a level that indicates a deceleration in the manufacturing sector. And in our nations capital, thousands lined the streets to see pope francis in his first brief but wideranging formal remarks on u. S. Soil, touching on both social and economic issues. He spoke of religious freedom being one of this countrys greatest possessions and of Climate Change being a great challenge. Mary thompson reports from washington. Reporter in his first visit to the white house, pope francis seeking Common Ground with americans. As the son of an immigrant family, im happy to be a guest in this country. Reporter his host, president obama, calling francis a pope of firsts. The first pope from the americas, the first jesuit pope, the first pope in the social media age. You are also the first pontiff to share a girt account. Reporter while francis em braces some aspects of the modern world he didnt refrain of warning of the trebles he believes it brings like Climate Change. I say urgency. It seems clear to me also that Climate Change is a problem we can no long er be left up to future generations. Reporter francis urging the u. S. To join the International Community in protecting the vulnerable. And the programs he said would let the vulnerable know the blessings of brace and prosperity. The focus on the poor often leading to Harsh Criticism from francis about the systems that exclude the poor and the people that run those systems. Whether theyre economies or enterprises. Its caused critics to label francis antibusiness or a social iist socialist. A label dismissed by this skra recess sent who bring his family to see the pontiff. If you go to church and read the gospels its the same message thats been delivered since the beginning of our religion. We have to take care of the least among us. Reporter thursday the pope addresses some of the most powerful among us become the first pope to address a joint meeting of congress. Where i hope in this country to offer words of encouragement to those who will guide the nation in the future to stay true to its founding principles. Reporter the son of immigrants appealed to the leaders of the nation built on immigrant toil and prosperity. For nightly Business Report, Mary Thompson in washington, d. C. The main event of the popes visit, arguably so i suppose, takes place on sunday in philadelphia when 2 Million People are expected to attend an outdoor mass. And some companies have spent a lot of money to prepare for it, especially telecom firms. At t spent about 25 million saying thats more than what it typically spends on other big events, including the super bowl. And Verizon Wireless says it spent roughly 24 million. The money was used to beef up the capacity of their wireless systems to make sure all those selfies, tweets and shares get sent quickly and without interruption. That weak data out of china we mentioned a few moments ago, along with a decline in domestic oil prices, weighed on stocks today. The dow and s p posted a loss for the fourth time in five sessions. By the close the Dow Jones Industrial average fell 50 points to 16,279. The nasdaq was about 4 points lower. So was the s p 500. And domestic crude fell 4 to settle below 45 a barrel. Factory activity in the United States remains stuck at nearly a twoyear low. Financial data firm market said its preliminary september reading was the same as augusts reading which was the lowest since 2013. A strong dollar and reduced Capital Spending by Energy Companies cited as the reasons for the weak performance. Widely followed bond fund manager bill gross wants the Federal Reserve to raise rates now. In his monthly news letter to his clients, dprols said the Central Banks aversion to normalizing rates is resulting in negative effects across the economy. He cited savers and investors and those getting hurt the most by those low rates. Gross manages the 1. 4 million janus global unconstrained bond fund. Why main street Business Owners are watching washington very closely. More than 5. 5 Million People are estimated to have their fingerprint information stole anyone massive Cyber Security breach at the office of personnel management. Thats five times more than the orange estimate when the breach was disclosed earlier this summer. The agency says it is working with groups like the fbi to determine the potential misuse of that stolen data. At midnight, one week from tonight, the government could potentially shut down. Thats when funding for many federal agencies expires. But Senate Republicans are trying to avert a government closure. Amon jarvis has been following developments from washington. Whats the senate going to do this week, if we know . And what happens after that . Ill tell you what the plan is. What theyre going to do is anybodys guess but the plan is tomorrow on thursday, Mitch Mcconnell and Senate Republicans will bring to the senate floor a measure that would be a shortterm funding measure that would fund the u. S. Government through december 11th. That measure, though, is going to have a rider on it that would defund manned parenthood. Republicans upset about the abortion issue. Theyd like to take that funding out of federal spending. Democrats are not going to go for that. Whats going to happen is that bills going to fail and then theyre going to bring up whats called a clean spending bill without the planned parenthood rider. That will likely pass and be kicked to the house of representatives by early next week. There is where speaker of the house john boehner is going to have tough decisions to make in terms of his republican conference and how they move forward on this. Would he potentially have to pass it with democratic support . He would. Thats something that people are talking about here in washington. Could he pass the with democratic support . If he does that, would he see a challenge from his base republicans to his leadership as speaker of the house . And then really interestingly people are already speculating on whether or not democrats would vote to keep john boehner in as speaker of the house if there was a challenge to his leadership. Its all down the road but those are the kinds of decisions on boehners plate. Weve seen this movie before. We dont know if were going to see a sequel. A lot of businesses were hurt and impacted the first time we saw a Government Shutdown. What about this time around . Thats right, sue. All kinds of nooks and crannies of the federal government. Business loves to complain about the federal government, complain about taxes. But then when the governments gone they suddenly notice all the benefits. A couple of tiny examples for you. One is Social Security number verification. Banks need to verify peoples Social Security numbers. And those services went dark last time there was a shutdown in 2013. I think there was a backlog of more than 1 million verification requests just in the first two weeks of that shutdown. Another one is the alaskan fishing season. They werent able to open that on time in 2013. Thousands of dollars a day in losses for alaskan fishermen. Big and little, all kinds of impacts here. Amon, thank you as also from washington. A key agency of the government is also in limbo. That being the Export Import Bank. It provides loans to foreign buyers of american goods. Its chatter expired june 30th and now its funding could run out at the end of the month. Its not just big corporations that could be affected. As kate rogers reports, Small Companies could feel the hit as well. Reporter for Small Businesses like mary howes Howe Corporation in chicago, the fate of their livelihood hang in the balance. Its all because of the uncertain future of the exposhe import bank, an agency integral to the operations of her company. Howes business exports up to 40 of Industrial Refrigeration equipment to places including Central America and canada. The Export Import Bank ensures the monoed to the company from foreign customers, giving her access to working capital from her bank. Her backup plan, to selffund. Without access to particulate call it stifles our growth and we are in a growth mode. Even our exports are growing. All we have the choice to do if we can no longer finance it internally is tamp down on the sales. The bank is considered a lifeline for Small Businesses that export products overseas, making and guaranteeing loan, providing insurance to support exports. Xms charter expired in june meaning its been unable to provide new loans or insurance but it continue to service its existing portfolio. Funding coinciding with a potential Government Shutdown on october 1st. The senate planned to fund the bill which has moved to the house nor consideration. Part of the Reason Congress let the banks charter lapse is due to fighting over who accesses capital. In 2014, the bank did 20. 5 billion in financing. 5 billion of it supported exports from Small Businesses. The remaining 15. 5 billion supports other exports by big corporations, including boeing and general electric, among others. I dont believe its fair, the vast majority of the resources of the xm bank goes to a handful of fortune 100 companies that have very large lobbying presence on capitol hill and in the administration. So most of this goes to very successful, wellheeled companies that dont need the money in the first place. Reporter but howe contends the failure to reauthorize the xm bank will stifle the gross of small american exporters. This has a big effect Going Forward on the job market. Reporter supporters are hopeful fare a longterm reauthorization of the bank. For nightly Business Report, im kate rogers. To find out more about how the fate of the export impact bank will affect smul businesses, nbr. Com. Reports First Niagara Financial Group is exploring a sale sent shares higher. The bank reportedly hired jpmorgan to advise cot on a possible sale. Its also looking into other opportunities. The company has a market value of about 3 billion with nearly 400 branches. Shares up 14. 5 today to 10. 26. Bio med realty trust, a Real Estate Investment trust that focuses on biotechnology companies, reportedly in talks to sell itself. The firm attracted interest from Morgan Stanley and has a market value of nearly 4 billion. Shares popped more than 12 , 21. 54. Depo med announcing it has received a positive patent decision. The review will clear the way for the companys infringement lawsuits against rivals. Shares were off just slightly to 24. 09. Heron they are pupil saw shares rise after that companys experimental drug for pain met the goals of its study. The drug helped lower pain in patients following surgery. Shares jumped nearly 22 to 40. 81. Coming up, the big threat to one of californias lucrative wine producing regions. Nike reports earnings, new home sales and durable goods orders, a read on how Many Americans filed for Unemployment Benefits and thats what to watch for thursday. A followup to a story we told you about this week. Ceo of touring Pharmaceuticals Says he will lower the price of a 62yearold drug just days after making headlines for raising it 5,000 . The chief executive did not say what the new price of the lifesaving medication would be. He is expected to make that determination over the next few weeks. And he said it was the outrage over the price increase that prompted him to make the change. Fastmoving wildfires in Northern California are threatening some of the states most important lucrative wineproducing regions at the peak of harvest. At jane wells reports from middle town, california, the financial burden will be shared by insurers as well. Reporter this is whats left of dawn woods home and winery. She hasnt seen it yet. All shes been told is the house and prizewinning winery went up in flames. Its a great wine. We said that was the best wine we ever made and now its all gone. So its kind of heartbreaking. Reporter woods said she barely escaped the valley fire alive. Fires which have taken six lives and consumed thousands of structures across Northern California threaten to also take a toll on the agricultural cash cow. Sweet. Reporter wine. Very sweet. Like a raisin. Reporter lake county is just east of napa valley and wine in this Rural Community is a 60 million industry. The fires hit just at harvest was starting. At this point we believe that theres been minimal number of acres of grapes burned. Reporter flames came within feet of the grapes at cimarron vineyard, postponing the harvest and bringing the fear of smoke taint. Weve had the grapes tested and there is minimal to no smoke damage. Reporter the grapes fared better than the houses. Over 1,600 homes destroyed and hundreds more damaged. The financial fallout will be shared by the insurance companies. We had the office over here. Reporter Farmers Insurance alone is dealing with 1,000 claims so far. Including one for jim westrick who plans to rebuild. Well have a new house. Well have a new home. The drought in california does create higher propensity for fire damage. We certainly recognize that. We do shift resources and have the ability to be able to respond to those events in that Geographic Area where we think its most likely. Reporter its already an expensive fire season and it isnt over yet. Its a tough time for everybody. But were all going to band together, make it work. Reporter for nightly Business Report, jane wells, middletown, california. To read more how wildfires in california are threatening wine production, head to nbr. Com. You can rebuild a house quickly but you cant reestablish those wonderful plants overnight. No, you cant. Your hearts go out to them. On that note, nightly Business Report for tonight, thats it for us. Im sue herera. Im tyler mathisen. Have a great evening, everybody, see you tomorrow. Next tuesday is april 25th. A year since the gallipoli landing. Olive a year . Already . Alice somehow i dont think were going to beat the germans any faster if you dont fall in love with mr. Dooley. Love . You havent seen harry for weeks. You dont even know if hes alive. Mr. Dooley . Hes gone. He was selected for officer training. Olive i got a telegram from harry. Hes going to pass through rouen. Im going to see harry today. Good luck to you too, sweetheart. Wilson i am leaving no. 1 agh. The aif matroninchief is taking furlough to australia. Well miss you. Ill be back. Olive you see, im going to volunteer. Pat . For the casualty clearing station. Theres one quite near trois arbres. Take care. Prior there was a battle at a place called fromelles
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