http://www.cbc.ca/news/business/volkswagen-eu-martin-schulz-german-economy-1.3256024

German car company, Volkswagen, was recently involved in an emissions scandal that has resulted in major losses for the company and Germany’s economy in its entirety. The company produced vehicles with illegal software in them and has had to recall 11 million cars. The cost is expected to exceed the 6.5 billion euros they have put aside to deal with the scandal, leaving Germany’s economy in jeopardy. Germany, being the “largest economy” in Europe, employs “more than 750,000 people” in the country’s car industry.

From an ethical standpoint, this scandal has obviously put both Volkswagen and Germany in a position of vulnerability. It will leave the company with a poor reputation, and after something like this, it will be difficult for customers to regain Volkswagen’s trust. In the long run, this scandal could potentially run the risk of losing consumers, as it was morally wrong on many different fronts. Short term, it could leave people without jobs as the company may have to cut jobs in order to cover costs. This will create economic instability for all of Germany. Was it worth it? Definitely not – Business ethics are essential to maintaining a thriving position in any economy.

Sources: http://www.cbc.ca/news/business/volkswagen-eu-martin-schulz-german-economy-1.3256024

http://www.supply.ie/blog/wp-content/uploads/2013/04/sepa.gif

Single European Payments Areas (SEPA) was designed to provide a central system of currency between 33 “fragmentary national markets”. It is suggested that SEPA will provide Europe and even the US with business advantages that the EU’s “international banking system” did not fulfill. Efficiency and ease of access will promote trade and transaction between both domestic and international markets.

It is evident that SEPA has made advancements such as establishing “direct debit” (which allows customers to be billed anywhere in the EU), single bank accounts (which take away the problem international bank account fees), bank account consolidation, and quicker availability of payments.

There is no simple way of fusing together several countries in hopes of having a stable and even thriving economy. SEPA has included the 28 EU members, as well as Iceland, Liechtenstein, Norway, Switzerland, and Monaco. This will allow companies to expand their markets and create a new consumer basis. That being said, uncertainty still lies in the stability of the European economy. Europe should continue to improve the state of the Euro and SEPA has been a great first step in doing so.

Sources: https://globalconnections.hsbc.com/canada/en/articles/10-ways-sepa-will-change-how-you-do-business-europe

http://www.pantagraph.com/business/u-s-factory-output-rises-just-pct-in-september/article_87737eaa-3ff3-11e3-90e9-001a4bcf887a.html

A new trend has sprouted in the business world: moving manufacturing facilities from China to the US. China used to be a very attractive location for inexpensive manufacturing, however the high logistics costs and a timely process has made for “massive amounts of inventory”, adding risk to companies’ financial stances. Global companies are now moving manufacturing back to the United States for US consumption and export. But is this going to negatively affect the global market in the long run? Will the positive impacts on the US outweigh the negative ones on China?

Having just learned about the risk of acquiring too much inventory, I think this shift is extremely beneficial to these large companies. Companies such as Wal-Mart, General Electric, and Toyota have shifted to US based manufacturing as their largest market is the US. This means they can easily flip inventory as well as keep up to date with technological advances, trends, and “seasonal goods”. Even Toyota, a Japanese company, has “doubled exports of US made cars” in the last year. Because of the US income gap, there is a huge market for low paid labour. This switch in supply bases will provide economic opportunity for US citizens and is more practical for US consumption.

Sources: https://globalconnections.hsbc.com/canada/en/articles/why-are-global-retailers-rushing-secure-us-supply-bases