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IPFS News Link • Business/ Commerce

Volkswagen has plunged 50%. Will it ever recover?

• CNN Money

Shares of Volkswagen have plunged nearly 30% since the news of the automaker's Clean Air Act violations first surfaced last Friday. The stock is now more than 50% below the 52-week high that it hit in March.

The departure of CEO Martin Winterkorn on Wednesday is helping VW in the short-term. The stock has rebounded from the 52-week low it hit Tuesday.

But one brand reputation expert said that VW has to act quickly to find new leadership.

"This is a mess. The CEO's resignation makes it more of a mess because it's a rudderless ship," said Richard Torrenzano, CEO of the Torrenzano Group, a firm specializing in crisis management for corporations.

It's important to remember that Volkswagen was already in trouble before the term "defeat device" started trending on Google and social media.

Related: Volkswagen CEO quits over 'grave crisis'

There was tension brewing between former VW chairman Ferdinand Piech and Winterkorn ealier this year. (Piech resigned in April.)

Excitement about VW's China business has also quickly turned into apprehension.

VW car sales in China helped it surpass Toyota (TM) to become the biggest automaker in terms of global auto sales in the first half of the year.

But China is now the financial equivalent of one of George Carlin's dirty words. China's stock market mess and economic slowdown started to take its toll on the stock over the summer.

So what now? It's hard to imagine how VW can quickly recover.


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