South Korea fines BMW $10 million over several engine fires

People try a new BMW 530e M Sport car at a car showroom at a shopping center in Bangkok, Thailand December 16, 2018. (REUTERS)
Updated 24 December 2018

South Korea fines BMW $10 million over several engine fires

  • BMW recalled some 172,000 vehicles in July and October over the fires it has blamed on a faulty exhaust gas component. The company said there had been no reports of injuries linked to the fires

SEOUL, South Korea: South Korea said Monday it will fine BMW 11.2 billion won ($9.9 million) and file a criminal complaint against the company with state prosecutors over an allegedly botched response to dozens of engine fires reported in the country.
South Korea’s Transport Ministry its investigation panel after a five-month review concluded that the German automaker deliberately tried to cover up technical problems and moved too slowly to recall vehicles after around 40 of its cars caught fire earlier this year. The ministry found the fires to be caused by faulty valves in the vehicles’ exhaust gas recirculation (EGR) coolers.
BMW apologized and recalled some 172,000 vehicles of 65 different models in July and October over the fires.
BMW AG’s South Korean unit said in a statement that the ministry’s findings were generally in line with the company’s assessment that the fires were caused by leaks of coolants in the EGR coolers. Combined with carbon and oil sediment the leaks could combust and cause fires when the vehicles were driven at high speeds for long periods of time, but BMW said the issue could be solved by the exchange of faulty hardware.
The company did not directly address the ministry’s accusation that it tried to play down the severity of the problem and recalled a narrower range of vehicles than it should have during its first recall in July.
“The BMW Group is cooperating with the ongoing investigation and is committed to resolving the issue,” it said in the statement.
Junghyun Kim, an official from BMW Korea, said there had been no reports of injuries linked to the fires in South Korea.


Analysts urge Canada to focus on boosting the economy

Updated 06 July 2020

Analysts urge Canada to focus on boosting the economy

  • Canada lost one of its coveted triple-A ratings in June when Fitch downgraded it for the first time

TORONTO: Canada should focus on boosting economic growth after getting pummeled by the COVID-19 crisis, analysts say, even as concerns about the sustainability of its debt are growing, with Fitch downgrading the nation’s rating just over a week ago.

Canadian Finance Minister Bill Morneau will deliver a “fiscal snapshot” on Wednesday that will outline the current balance sheet and may give an idea of the money the government is setting aside for the future.

As the economy recovers, some fiscal support measures, which are expected to boost the budget deficit sharply, could be wound down and replaced by incentives meant to get people back to work and measures to boost economic growth, economists said.

“The only solution to these large deficits is growth, so we need a transition to a pro-growth agenda,” said Craig Wright, chief economist at Royal Bank of Canada. The IMF expects Canada’s economy to contract by 8.4 percent this year. Ottawa is already rolling out more than C$150 billion in direct economic aid, including payments to workers impacted by COVID-19.

Further stimulus measures could include a green growth strategy, as well as spending on infrastructure, including smart infrastructure, economists said. Smart infrastructure makes use of digital technology.

“We have to make sure that government spending is calibrated to the economy of the future rather than the economy of the past,” Wright said.

Canada lost one of its coveted triple-A ratings in June when Fitch downgraded it for the first time, citing the billions of dollars in emergency aid Ottawa has spent to help bridge the downturn caused by COVID-19 shutdowns.

Standard & Poor’s, Moody’s and DBRS still give Canadian debt the highest rating. At DBRS, Michael Heydt, the lead sovereign analyst on Canada, says his concern is about potential structural damage to the economy if the slowdown lingers too long.

Fiscal policymakers “need to be confident that there is a recovery underway before they start talking about (debt) consolidation,” Heydt said.

Fitch expects Canada’s total government debt will rise to 115.1 percent of GDP in 2020 from 88.3 percent in 2019.

Royce Mendes, a senior economist at CIBC Capital Markets, said the economy still needs more support.

“Turning too quickly toward austerity would be a clear mistake,” he said.