EuroWire January 2017

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Transatlantic cable
January 2017 34
2 (WEF 5.72) Singapore.
The island nation stays in second place for the sixth year in a
row. While it aces all the other sub-indexes, if it hopes ever to be
number one the WEF said it must improve its scores in business
sophistication and innovation.
3 (WEF 5.70) The United States of America.
A stable macroeconomic situation and a falling budget de cit
keep this powerful economy near the top spot. Says the WEF:
“The position of the United States is driven by innovation,
business sophistication, market size, nancial market
development, labour market e ciency, and higher education
and training.”
Tied for 4 (WEF 5.57) The Netherlands.
The Dutch economy moves up in the ranking again this time
after having boosted its standing through “small improvements
across all three subindexes, with a solid and even performance
across the pillars.” It earned scores in the top ten for
infrastructure, health and primary education, higher education
and training, goods market e ciency, technological readiness,
business sophistication, and innovation.”
Tied for 4 (WEF 5.57) Germany.
The German economy drops one place in the latest rankings
because, although its macroeconomic environment is generally
stable, with a very low government de cit, “like the rest of the
euro zone it faces near-zero in ation.”
Sweden, the UK, Japan, Hong Kong and Finland account for
the lower tier of the WEF’s top ten competitive economies for
2016-2017.
† The list-making tendency that sprouts with the New Year
turned up another interesting datum on London. As per the
luxury travel magazine Condé Nast Traveler, the capital of
the United Kingdom (with 19.88 million overnight visitors in
2016) was the second-most-visited city in the world for the
year, after Bangkok, Thailand (with 21.47 million visitors).
Paris, Dubai and New York rounded out the top ve most-
visited cities.
Automotive
Hundreds of thousands of buy-back
‘dirty diesels’ present Volkswagen with a
daunting storage problem in the USA
In November, Volkswagen Group of America was set to begin
buying back 2.0-litre diesel VW and Audi cars sold between 2009
and 2015, the rst of close to half a million caught up in the
VW diesel emissions scandal.
Writing in Green Car Reports, John Voelcker, senior editor for
Internet Brands Automotive Group, considered what the
company might do with those vehicles once it had taken legal
possession.
He learned that the cars would not, as might be expected,
routinely be disabled, “parted out” and recycled.
Their disposition depends on the outcome of negotiations
between the company and both the USA Environmental
Protection Agency (EPA) and the California Air Resources Board
(CARB) over proposed modi cations to some of the cars. (“What
Will VW Do with TDI Diesel Buyback Cars? It’s Not What You
Think,” 3rd November)
In advance of EPA and CARB approval, it appears that VW will
have to store the vehicles, possibly hundreds of thousands of
them. As the buy-backs got under way it would likely have to
rent storage elds and warehouses all over the USA.
According to a 25th October decision by a federal judge,
ultimately VW may take any of these courses of action with the
bought-back diesels:
† modify and resell them as used cars, with proper disclosure
to the buyer
† export them for resale abroad
† render them inoperable and recycle them, or salvage them
for parts that may be sold in the USA or exported
Mr Voelcker reported that the a ected vehicles in the initial
roundup fall into three groups.
The 67,000 cars in Group 1 exceed legal emission limits less
than earlier diesel models, thus may be the best candidates for
modi cation approval.
They use a newer 2.0-litre engine and are tted with tanks for the
diesel emission uid necessary for selective catalytic reduction
(SCR) exhaust after-treatment to reduce pollutants.
The 90,000 cars in Group 2 use an older 2.0-litre diesel engine
but are equipped with the SCR system and tanks for the urea
uid it requires.
Most of the non-compliant diesel cars (325,000 units) are in
Group 3 – those that were not tted with the SCR system but
only with a Lean NOx Trap. They are by far the dirtiest, and
would likely be very expensive to modify.
Wrote Mr Voelcker, “To comply with emission standards they
might require installation of catalytic converters, urea tanks,
and many engine modi cations they were never designed to
accommodate.”
The cars in this category are most likely to be rendered
inoperable and scrapped, probably in a process similar to the
“Cash for Clunkers” programme for older vehicles conducted in
the USA in 2009.
Steel
A ‘Nixon-to-China’moment, extraordinarily
favourable to the American steel industry,
may be at hand
“In other words, if Democrat Obama had succeeded it would
have been socialism. If [Republican] Trump succeeds he’s Making
America Great Again.”
Tom Balcerek, who formerly handled North American coverage
for Steel Business Brie ng, is senior editor of S&P Global Platts (also
London-based).
In a recent issue he considered the present prospects of the
American steel industry in starkly political terms and concluded
that “things are looking great.” (“US Infrastructure May Soon Have
Its Nixon-To-China Triumph,” 18th November)
Mr Balcerek noted that steelmakers’ share prices surged in the
immediate aftermath of Donald Trump’s election to the USA
presidency, presumably on Mr Trump’s commitment to put
America rst by ghting “unfair” trade deals and imports.