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byline: Virginia Business

People – August 2016

EASTERN VIRGINIA
Sean Cushing, appointed to the Virginia Secure Commonwealth Panel. He is president and co-founder of HAZON Solutions in Virginia Beach and a retired U.S. Navy commander. (News release)

William H. Ferguson, appointed to the State Air Pollution Control Board. He is senior vice president, Harvey Lindsay Commercial Real Estate, Norfolk. (News release)

Paul D. Fraim, named to the Eastern Virginia Medical School board of visitors and president of The Slover Library Foundation, both in Norfolk. He is the former mayor of Norfolk. (News release)

Pete Graham, named executive vice president and chief financial officer, PRA Group Inc., Norfolk, effective Aug. 10. He was a finance executive with GE Capital. (VirginiaBusiness.com)

Richard E. Groover, CPA, of Wall, Einhorn & Chernitzer in Norfolk, named vice chair, Virginia Society of Certified Public Accountants. (News release)

Stephanie Saunders, CPA, reappointed to the Virginia Board of Accountancy. She is a partner with Saunders & Saunders PC, Virginia Beach. (News release)

F. Blair Wimbush, of Chesapeake, reappointed to the Virginia Port Authority board of commissioners. Wimbush recently retired as Norfolk Southern Corp.’s vice president, real estate and corporate sustainability officer. (News release)

SHENANDOAH VALLEY
Maribeth Daley Herod, senior vice president of Bank of America, and Lara Major, an educational consultant, have been named to the board of Harrisonburg-based James Madison University. The following people have been renamed to the board: Michael B. Battle, CEO of BRMi; John C. Rothenberger, founder and CEO of SE Solutions; and Michael M. Thomas, executive vice president of Booz Allen Hamilton. (News release)

Neil Houff, named to the Board of Agriculture and Consumer Services.  He is president, Houff’s Feed & Fertilizer Co. Inc., Weyers Cave. (News release)

Scot W. Marsh, named to the board of the Virginia Military Institute in Lexington. He is presiding partner of Marsh & Legge Land Surveyors PLC in Winchester. (News release)

Faith B. Power, of Winchester, reappointed to the Virginia Port Authority Board of Commissioners.  She is a management consultant and professorial lecturer in human and organizational learning. (News release)

Robin Sullenberger, reappointed to the State Board for Community Colleges. He is the former CEO of the Shenandoah Valley Partnership. (News release) 

F. Dixon Whitworth Jr., of Winchester, renamed to the Commonwealth Transportation Board. He is the retired regional president, BB&T. (News release)

SOUTHERN VIRGINIA
Don Bright and Joel L. Cathey, renamed to the Virginia Board of Forestry. Bright is president, Meherrin River Forest Products Inc., Alberta. Cathey is resource manager, Ontario Hardwood Co. Inc., Keysville. (News release)

John Gilstrap began his term as mayor of Danville on July 1. He succeeds Sherman Saunders, who served in the role for 8½ years. Alonzo Jones is now the city’s vice mayor, replacing Gary Miller.  (Danville Register & Bee)

Steven Gould and Nettie L. Simon-Owens named to the Longwood University board of visitors. Gould is an attorney at  Clement Wheatley in Danville and member of the City of Danville School Board. Simon-Owens is the chief economic advancement officer of the Southern Virginia Higher Education Center in South Boston. (News release)

Danville-based American National Bankshares Inc., the parent company of American National Bank and Trust Co., named Ramsey K. Hamadi executive vice president of the holding company and the bank. He was CFO of NewBridge Bank, a community bank based in Greensboro, N.C. (VirginiaBusiness.com)

Martinsville-based Carter Bank & Trust has promoted Phyllis Q. Karavatakis, an employee for 38 years, to president. She was executive vice president and chief lending officer. (VirginiaBusiness.com)

Earl B. Reynolds Jr. has been selected as deputy city manager in Danville. Reynolds was Danville’s director of community development. He succeeds Ken Larking, who was promoted to city manager April 5.  (GoDanRiver.com)

Traci DeShazor, a Danville native, named deputy secretary of the commonwealth. She was the deputy director of the Virginia Office of Intergovernmental Affairs. (News release)

SOUTHWEST VIRGINIA
Robert A. Archer and Rachel D. Fowlkes, appointed to the board of Radford University. Archer is president and CEO of Salem-based Blue Ridge Beverage Co. Inc. Fowlkes is a retired executive director of Southwest Virginia Higher Education Center in Abingdon. (News release)

Ken McFadyen, named director of economic development, Botetourt County. McFadyen was executive director of the Blue Ridge Crossroads Economic Development Authority, which serves the city of Galax and Grayson and Carroll counties. He also serves on the executive committee of the Virginia Economic Developers Association. (News release)

Joseph Carson Spooner, named president of Ferrum College in Franklin County, effective Aug. 1. Spooner, dean of Jonathan Edwards College at Yale University, is replacing Jennifer Braaten, who is retiring. (News release)

Brown Edwards, a regional certified public accounting firm based in Roanoke, announced that Laura Sprouse and Tim George have joined the partnership. Sprouse, the firm’s administrator, has worked more than 18 years in public accounting. George serves in the firm’s assurance area. He specializes in accounting, taxation and various consulting services for privately held firms. (VirginiaBusiness.com)

Elizabeth M. Cranwell, of Roanoke County, named to the board of the University of Virginia and its affiliated schools. Cranwell is a public relations professional. (News release)

NORTHERN VIRGINIA
Jennifer D. Aument, reappointed to the Virginia Port Authority board of commissioners. She is group general manager, North America, Transurban, Alexandria. (News release)

Mike Lawrie, president and CEO of CSC Inc., will resign as chairman and a member of the board of directors of Falls Church-based CSRA Inc., effective Aug. 9. Nancy Killefer, currently CSRA’s lead independent director, will succeed Lawrie as chairman, pending her re-election to the board of directors at the company’s annual meeting. (VirginiaBusiness.com)

Ignacia S. Moreno, appointed to the State Air Pollution Control Board. Moreno is CEO and principal, The iMoreno Group PLC, which has offices in McLean and Charlottesville. (News release)

Five entrepreneurs are among eight named mid-Atlantic winners in the 30th annual EY Entrepreneur of the Year Awards. The regional winners include: Joe Pack, Atlantic Emergency Solutions, Yorktown; Osiris Hoil, District Taco, Falls Church; Rick Calder, GTT Communications Inc., McLean; David Link, ScienceLogic, Reston and Sonny Kakar, Sevatec, Fairfax. Regional award winners are eligible for consideration for the EY Entrepreneur of The Year national awards, which will be announced Nov. 19 in Palm Springs, Calif.  (VirginiaBusiness.com)

Laurie A. Warwick, of Ashburn, a CPA, appointed to the Virginia Board of Accountancy. Warwick is executive director at EY. (News release)

CENTRAL VIRGINIA
Deborah Davis will succeed the retiring John Duval as CEO of VCU Health System Hospitals and Clinics, as well as vice president for clinical affairs at Virginia Commonwealth University. Davis has been chief operating officer of VCU Health and VCU Hospitals for nine years. The change will be effective Oct. 1. (Richmond Times-Dispatch)

Mark Every has joined Richmond-based West Creek Financial as chief operating officer. Every’s career includes eight years with AMF Bakery Systems, leading operations and manufacturing facilities across North America. (VirginiaBusiness.com)

Gary M. Gore, a former Virginia president of Bank of America and mid-Atlantic region executive for U.S. Trust, has launched ACIMA Private Wealth, a Richmond-based wealth management firm.  (VirginiaBusiness.com)

Todd Haymore, Virginia’s secretary of agriculture and forestry, will succeed Maurice Jones as secretary of commerce and trade in September. Jones will become CEO of Local Initiatives Support Corp. (VirginiaBusiness.com)

Richmond-based Brink’s Co. has named Douglas A. Pertz CEO and president. Pertz was CEO of Recall Holdings Ltd. He succeeds George I. Stoeckert, who has been interim CEO since the retirement of Thomas Schievelbein on May 6. (News release)

Richmond-based Capital Square 1031 LLC has named Richard Stanard chief financial officer. Stanard joins Capital Square 1031 from HITT Contracting Inc. where he was CFO and treasurer for 13 years. (VirginiaBusiness.com)

Opportunities and drawbacks

Virginia Business talked with six community bank executives in April about the challenges and opportunities they face. The group included G. Robert Aston Jr., chairman and CEO of Portsmouth-based TowneBank; G. William Beale, president and CEO of Richmond-based Union Bankshares; James C. Cherry, Richmond-based CEO of Charlotte, N.C.-based Park Sterling Bank; William J. Ridenour, president and chief administrative officer of Reston-based John Marshall Bank; Gary R. Shook, president and CEO of Middleburg-based Middleburg Bank; and Susan K. Still, president and CEO of Roanoke-based HomeTown Bank. The following is an edited transcript.

Virginia Business: What is the value proposition for community banks?  How are they different from regional and large banks?

Ridenour:  The biggest thing I notice is that, when banks get very large, they’ve got so many employees, that in order to control risk, particularly with lending products, they pull a lot of the authority into a central area, which they have to do. From our standpoint, when you have people that are in the trenches that are meeting with the customers and they can make decisions, they can respond quickly, they can customize things that you don’t see in the larger banks.  I think that’s the biggest thing that we see.

Beale: I’d add [that community banks] would rotate officers on the relationships. The person that a client had 10 years ago is probably the same person today and likely the one they’ll have five years from now … I think the other piece is, after this downturn, there are many of our clients who saw the big banks exit lines of business while we stood in there and continued to finance homebuilders.  We continued to finance others that were out of favor …

Still:  I really felt like the downturn caused a renaissance for community banking because, all of the sudden, the folks that were banking at the larger banks realized they had a choice.

Cherry:  I would only add that community banks provide in-market, personalized, flexible, customized services for their clients and as opposed to oftentimes out-of-market, commoditized services. Those commodities can be fine, and they can work for people as long as they don’t need something to be flexible or tailored for their individual needs.  Once they do, they begin to fall outside of the sweet spot with the very large banks, simply by their nature …  It’s just the nature of the organization that the community banks can be much more responsive and in tune to individual needs.

Aston: Back to ’08, when everything started collapsing, and for those of us fortunate not to have a lot of problems, the movement of the large banks pushing these credits out … led to a lot of business opportunities that actually made those years during the downturn some of our best years. My experience has been when these segments fall out of favor, as it did in real estate, for example, all of a sudden large banks, either by regulatory pressure or by self-imposed pressure, decide to reduce their percentage of penetration in those portfolios.  So then they start not renewing lines. Then the lines that they do get paid off are usually the better customers that can go to another bank. [The large banks] ended up remaining stuck with those that couldn’t pay.  At the end of the day, my view is they may have reduced the size of the portfolio, but the risk of that portfolio probably went up in the process because it was the better customer who could exit.  So, it didn’t feel good at the time, but looking back at it, it was a time of great opportunity.

VB:  It seems like every day there’s a new data breach in the news.  We’re curious to know how this issue is affecting community banks.  Are you investing money or staff to beef up cybsecurity?

Ridenour:  We just went through a conversion to a new operating system. A big part of that process was to increase our ability to have protocols for security, for cybersecurity, for ACH [automated clearing house] transactions and wires. It was a challenging process because our customers now are going through re-establishing their online banking systems and new protocols, but it’s something that’s really in the forefront of everything that we all do because our customers want to know that their transactions are secure. But it was a big investment and a big challenge for us. 

Shook:  We’ve just spent half of our last monthly board meeting talking about cyber risks.  The regulatory regime is trying to catch up to where the cyber world is right now … It’s not an “if,” it’s a “when” type of situation [as far as the possibility that a cybersecurity attack will occur] … Where we run into the bigger problem is the rest of the world that doesn’t follow the same set of rules that we follow … You go back to the Target [breach] scenario.  [The hackers] came in through the computer system that drove the HVAC system and then got into the client data. Then [the banks] ended up covering [all the losses] for everybody. Congress needs to wake up and get something moving on the cybersecurity so it just doesn’t leave us holding the bag. 

Beale:  Most of us in here, at least we do, pay professional hackers to try to not only penetrate us externally but, in sort of the Sony scenario, [find out if] they can get into the building and if they can get in the building, can they access data? That’s an interesting way to find out where your vulnerabilities are …

I would say, depending upon the size of the bank, we’re all investing somewhere between hundreds of thousands to millions to make sure that we’ve got every piece of it as buttoned down as we can. Probably the main reason nobody in this group has been breached is that we’re all fairly small banks, and we’re not known by some of the actors that would be trying to go after the bigger banks.

Still:  I think banks in general for a long time have been data-security focused. That’s helped the banking industry, but it does present problems with vendor management.  When we start doing business with other vendors, like the core processors, we have to make extra sure that they are very compliant and that cybersecurity is something that they take very seriously. We get reviewed by the regulators for vendor-management practices.  Training is another thing. We constantly keep our employees trained and test them to see if they know not to open certain emails.  We try to have something for our board meetings to keep our board members trained as well.

Cherry:  I think the biggest challenges for us are not the software and hardware and security procedures that we put in place, it’s educational, both internally and externally.  Internally, the biggest likelihood of entry into our system comes through email or internet. It’s an employee unknowingly or unwittingly clicking on a link or opening an email attachment … Externally, it’s the customers who don’t protect their systems that have to interact with us. They unwittingly open themselves up, and therefore gain an entry to us. 

VB:  What about with increased use of mobile apps by the customers?  Does that open another door of vulnerability?

Cherry:  It goes through the same kinds of protections.  The vulnerability usually there is … that customers don’t protect their information and leave it vulnerable. That’s the greater likelihood. … So [it is not as likely that a hacker would gain access] into the entire bank from a mobile app, but it does obviously have vulnerability for customers.

Beale:  You don’t want to be sitting in a coffee shop with an unsecured, open Wi-Fi doing mobile banking.  You’re probably putting yourself at way too much risk.

Shook:  We went through an update recently on our mobile system to a more secure platform. You’ve got authentication, dual authenticate, but nobody wants to add all that in.  They want ease.  They want to press the button and say, “Go,” and we’re trying to protect them in the process. You really want these multiple authentications so that someone can’t break into your system and thus into your financial information.  Everybody wants the data, and everybody wants it in their handheld, but they’re not as focused on the security you really need to be thinking through when you use those devices.

Ridenour:  One important aspect, I’m sure everyone would agree, is that regardless of how the breach occurs, the customer is going to look to the bank. Even if they created the breach, they’re going to say, “Well, you know it was your system.”  It is a public relations issue that we wrestle with every day.

VB:  How has [the use of mobile apps] grown at your banks?

Aston:  It’s definitely a growing part, I think, of every bank, every banking business.

Cherry:  We offer mobile banking capabilities to both commercial customers and consumers, and it’s a hugely important part of community banking going forward because it allows us to play bigger than our footprint. In the past, if you wanted to do business with people, you had to have an office near them.  Now, with remote capture and mobile banking, the ability to initiate and authenticate wires and transfers and those kinds of things through the phone, we now can bank much more broadly then we were able to. 

I think for community banks especially, mobile banking is going to be a hugely important part of their future.  Today, on our consumer side, for example, not only can you get information, transfer money between accounts and make deposits by taking a picture, but you can also pay your bills by taking a picture of them, and you can turn your debit card on and off by just flipping a switch on your mobile banking.  I think that will be ubiquitous, and everyone will ultimately be doing that.

Still:  I think mobile banking is very important, just like technology in general is so important for community banks.  It’s allowed community banks to really leapfrog in the industry. It’s our fastest-growing section and millennials are famous for wanting to use mobile banking.  It’ll be a growing field.
Shook:  [In] the community bank sector, we don’t have the same breadth of branch networks that the large players do.  The internet piece will not force us to have to have that build-out and infrastructure in bricks and mortar.  It really levels the playing field.  It maybe tilts it a little our way on the expense side, ultimately, because we can deliver this at a lot less cost than bricks and mortar would be.

Cherry:  But one of the largest areas of new adopters to mobile banking, interestingly, are the ones you would think least.  It’s the older people who are finding they can access their accounts and information much easier than they can go to a bank, and it’s rural people, a farmer sitting on a tractor who has to drive miles to get to the bank who now doesn’t have to do that anymore.  So while we think of it as being the millennials and the young, and they clearly were the initial and the largest group of adaptors, it’s now shifting.

VB: What about the emergence of FinTech startups that are offering a variety of financial services? Do they represent a threat to banks or can banks learn something from them? 

Beale:  FinTech came into being when banks were in a weakened state. All of them have started up since the downturn. You can make an argument that, had banks tried to create a LendingClub or a Prosper … we probably couldn’t have or wouldn’t have been allowed to. 

I think there are things to learn from them.  They’re a box, and the [lending decision process] that come out of that … is pretty interesting, but it has never been tested in a downturn.  It’s all post-2010. 
We partner with some of them and are continuing to look at that as an alternative way to deliver consumer loans, but we’re sort of toeing the water in trying to feel our way.
I think they’re a disrupter.  I think they will and do take business away from the banks, which is why I think you’ll find more and more partnering going on. 

Cherry: One of the reasons that FinTech has come [about] is because they’re not regulated. As they become a bigger and greater force, they ultimately are going to be subjected to regulation, and I think that will have a significant impact.

Shook:  I think that the real change will come where there is a downturn, and the music stops; then not everyone has a chair to sit in. Or there’s a breach. Then, and I’m being halfway facetious here, there will be new regulations put on the banks because of what FinTech has done cause they can’t regulate FinTech.  We always end up getting the brunt when these things take place.

VB: How is the regulatory environment affecting the bank’s profitability and your ability to make loans?

Still:  It’s certainly a drain on profitability.

Beale:  I don’t know that it’s affecting our ability to make loans.  Even after the downturn, I never felt that any regulation was prohibiting us from making a loan.  There may have been decisions around how the economy was and those sorts of things that kept us from making a loan. 

With the Dodd-Frank Act, a lot of artificial barriers or thresholds were created [resulting in] artificial decision-making by CEOs. I guess there’s two of us in this room that one day will cross $10 billion [in assets] if we just keep doing business the way we’re doing it. We’re probably three years away, and that $10 billion threshold is forcing artificial decision making.

Obviously, we are investing more in compliance, specifically focused on fair credit because of the impact and the focus of the Consumer Financial Protection Bureau, and that’s in hundreds of thousands of dollars of people and software. 

We are spending money on building out enterprise risk management systems, which have become the new buzzword for regulators to try to have this overarching approach, and that runs into the millions. All of that impacts profitability, and there aren’t that many banks that are making the same return on equity or the return on assets that we were making pre-downturn, and I think it will be a while before we can get back there.

Cherry:  It has significantly increased costs, helping to drive the consolidation in the banking industry, but it is only one of a number of factors doing that.

But I would disagree a little bit on the ability to lend.  It is much more difficult for banks to differentiate themselves from one another when they all have the exact same requirements for information that they have to comply with.

Mortgage lending, residential mortgages, would be a great example of that.  There’s no question there have been increased barriers to the ability to make mortgage loans and the difficulty of distinguishing yourself when you have a stack of documents that big that have to be signed by your customers and length of time before you can go through in the  process. That clearly has discouraged customers from borrowing.  So whether it’s kept us from being able to do it or whether it’s discouraged the customer from wanting to go through the process or not, the end result is probably the same.  It is a significant dampening effect on our economy.

If you look today at small business formation for example, it is dramatically reduced from what it has been.  I’m convinced that’s because of all of the criteria and hoops that have to be jumped through because of regulation and compliance issues that make it more difficult.  I think our whole economy is suffering significantly by virtue of the current pendulum having swung way too far from a compliance and regulatory standpoint.

Followups – July 2016

Shareholders approve  the merger of Nexstar and Media General
The merger of Richmond-based Media General Inc. and Texas-based Nexstar Broadcasting Group Inc. moved closer to completion in June when shareholders from both companies approved the $4.6 billion deal.

The combined company would be based in Irving, Texas, and have 171 television stations across the country. The merger is expected to close later this year.

Virginia Business reported in its June issue that Media General has made a $100,000 gift to the Virginia Historical Society in honor of its late chairman, J. Stewart Bryan III, who died in January. The company also donated many of its records to the VHS Reynolds Business History Center.

VHS has used the Media General gift to establish an endowment fund for research, scholarship and programming on the history of American journalism and freedom of the press.

Old Dominion to use $35 million gift to build a new art museum
Old Dominion University plans to create a new art museum with donations valued at $35 million from benefactors Richard and Carolyn Barry.

The gift is the largest in ODU’s history.  The museum is expected to hold its grand opening in 2018.  

Richard Barry had a 40-year career at Landmark Media Enterprises and its predecessor, Landmark Communications, where he was vice chairman.  He was rector of ODU’s board of visitors in the 1980s.  Carolyn Barry is a master docent at the Chrysler Museum of Art and serves on the museum’s board of trustees.

June’s issue included lists of major donations made by individuals, corporations and foundations in 2015. An extensive list of this year’s donations will be included in next June’s issue.

For the Record – July 2016

EASTERN VIRGINIA
Virginia Beach is gearing up to become a major high-speed data hub. Facebook and Microsoft plan to build an underwater cable to transmit large amounts of data from Bilbao, Spain, to Virginia Beach. Construction of the cable will start in August, with completion expected in October 2017. (The Virginian-Pilot)

Newport News-based Ferguson has acquired Bruce-Rogers Co. for an undisclosed amount. Bruce-Rogers Co. is a plumbing and HVAC equipment supply house in Fort Smith, Ark., that serves contractors in western Arkansas, eastern Oklahoma and southern Missouri. (Daily Press)

Newport News Shipbuilding is calling back 210 of the workers it laid off in early February. The recall follows another in early April, when 75 employees who had been laid off were called back. The 285 recalled employees were among 738 laid off on Feb. 3. Matt Mulherin, president of Newport News Shipbuilding, said the recall was due “to updated workload manning plans and growth work on several programs.” (The Virginian-Pilot)

Virginia Beach-based SwimWays Corp. is suing Aqua Leisure Industries and Bestway Global Holding Co. on allegations they infringed on several patents. The complaint, filed in U.S. District Court in Norfolk, lists examples of products that Aqua Leisure and Bestways have sold and continue to sell that constitute patent infringement, according to SwimWays. (Southside Daily)

Telefónica International Wholesale Services USA Inc. plans to build a data center in Virginia Beach that will house the first transoceanic fiber cable station in the mid-Atlantic. Telefónica, based in Madrid, is one of the 10 largest telecommunications companies in the world, with more than 320 million clients. (VirginiaBusiness.com)

The Williamsburg Lodge will join Autograph Collection Hotels, Marriott International’s portfolio of nearly 100 independent hotels worldwide, in January 2017. The Colonial Williamsburg Co., the Colonial Williamsburg Foundation’s for-profit subsidiary, will continue to own and operate the Williamsburg Lodge after the strategic alliance with Autograph Collection. (News release)

SHENANDOAH VALLEY
Augusta County School Board will receive more than $1 million in federal grant funding for its Head Start program, which promotes school readiness of children under 5 from low-income families through education, health, social and other services. It is one of six areas in Virginia receiving more than $17 million in funding. (News release)

Cargill is investing roughly $4 million in its equipment at its poultry processing plant in Harrisonburg including adding three robots used to stack boxes of turkey products onto pallets. Randy Batson, the plant’s general manager, said the company also is automating the plant’s ice-making equipment. Work on the upgrades is expected to be completed by the end of July. (Daily News-Record)

F&M Corp. has completed the first step of its Timberville shuffle. Farmers & Merchants Bank, a subsidiary of the company, has purchased the former Carilion Family Medicine building at 165 New Market Road and plans to move its in-town retail banking operations to that location. That move will open up space at 205 S. Main St. — now doubling as the Timberville branch and F&M Corp.’s offices — to expand its headquarters. (Daily News-Record)

Edinburg-based Shenandoah Telecommunications Co. has been named on Forbes 2016 list of 100 Most Trustworthy Companies in America. The company, known as Shentel, also was named to this list in 2013 and 2014. The list recognizes companies that consistently demonstrate trustworthy accounting and governance practices over the previous year, a release said. (News Leader)

The United Way of Greater Augusta recognized local companies, organizations and individuals at its annual awards ceremony held at the Frontier Culture Museum in May. There were three individual awards given out — Volunteer of the Year (Delia Zimmerman), Company of the Year (McKee Foods) and Nonprofit of the Year (Blue Ridge Legal Services). (News Leader)

The Valley Health System board of trustees announced that the boards of its four Virginia hospitals — Page Memorial Hospital, Shenandoah Memorial Hospital, Warren Memorial Hospital and Winchester Medical Center — will be consolidated with the Valley Health Board into one governing body. The governance and management of Valley Health’s two West Virginia hospitals, Hampshire Memorial Hospital and War Memorial Hospital, were consolidated under one board in 2014 and will not be affected. (Shenandoah Valley Now)

David Downes plans to establish the Virginia Beer Museum at 16 Chester St. in Front Royal. He said the objective is to represent the heritage of Virginia beer, stretching from Jamestown to the current craft beer renaissance. Downes said the museum hopes to have a soft opening sometime in July and plans to have a grand opening on Sept. 24 to coincide with the Brew and Blues Festival. (The Warren Sentinel)

SOUTHERN VIRGINIA
Danville Regional Medical Center will soon add about 20 third-year medical students from Liberty University’s College of Osteopathic Medicine in Lynchburg to its roster of educational training programs. In August, Danville Regional Medical Center — in partnership with Memorial Hospital of Martinsville and Henry County and local physician practices — will begin training the Liberty University  students. They will live in Danville and do the majority of their clinical rotations locally. (Danville Register & Bee)

Danville and Duke Energy officials held a reopening ceremony at the three-acre Abreu-Grogan Park in May after a $500,000 renovation. Duke had made a commitment with Danville to improve Abreu-Grogan Park recreation amenities in recognition of the city allowing the company to use the park while removing coal ash from the Dan River. In February 2014, coal ash spilled into the river from Duke’s old Dan River Steam Station in Eden, N.C. (Danville Register & Bee)

Patrick Henry Community College in Martinsville has announced a $100,000 endowment established by Kim and David Darnell in honor of Kim’s parents, retired Judge Kenneth M. Covington and his wife, Norma. Covington served as Henry County commonwealth’s attorney for 12 years and retired as a Henry County Circuit Court judge. (Work It, SoVa)

Raju Kosuri, his wife and four other defendants face federal visa fraud-related charges. The charges accuses Kosuri and his co-defendants of amassing more than $20 million by falsely acquiring visas for about 800 Indian immigrants, lying about what those immigrants would be doing — often claiming they would work for EcomNets in Danville — and charging the immigrants illegal fees for the service. Kosuri was the founder and CEO of EcomNets in Danville, which is no longer in operation. (Danville Register & Bee)

The West Piedmont Workforce Board has received $150,000 for a new program for small businesses designed to increase the skills of current employees. The funds — part of a $1 million statewide investment — will immediately be available to state workforce boards for the Incumbent Workforce Training program. Danville Community College is one of nine schools that will provide training and assignments, Gov. Terry McAuliffe’s office announced. (Work It, SoVa)


SOUTHWEST VIRGINIA
Advance Auto Parts moved up one spot on this year’s Fortune 500 list to No. 293. Advance Auto is the only Fortune 500 company headquartered in Roanoke. It recorded $9.7 billion in revenue in 2015, down 1.1 percent from the previous year. The list, compiled by Fortune magazine, ranks the top publicly traded companies in the U.S. based on gross revenue. (VirginiaBusiness.com)

Crews will build downtown Roanoke’s Amtrak platform starting this fall, one year before the expected start of passenger train service. Officials have said the $9.9 million platform will sit level with the train car’s floor to permit level boarding. Virginia Department of Rail and Public Transportation spokeswoman Bethany Wolfe said Amtrak plans to begin service in the “fall of 2017” between Roanoke and all its Northeast corridor stops. (The Roanoke Times)

State environmental regulators have cited Norfolk-based Norfolk Southern Corp. for an oil spill that happened when two trains collided last summer in Pulaski County. The railroad agreed to pay a fine of $25,000 as part of an agreement with the Department of Environmental Quality. Another $5,232  will go to reimburse the agency for its investigation of the spill. (The Roanoke Times)

Radford University was expected to lose its Small Business Development Center in June. The decision to close the center, operated by Radford’s College of Business and Economics, was to shift that college’s funds in ways that “would more substantially benefit [the college’s] 1,500 students,” Radford spokesman  Joe Carpenter said in an email. The center received half of its funding from the Virginia Small Business Development Network and federal funds and half from the university. (The Roanoke Times)

More workers are facing layoffs at the Dublin Volvo plant. Volvo’s only North American truck-making plant plans to enact layoffs at some time in August, adding  to the hundreds of regional jobs the company already cut earlier this year. Volvo spokesman John Mies confirmed the latest rounds of layoffs via email, explaining that the latest announced round of layoffs is tied to more expected drops in truck production. (The Roanoke Times)

CENTRAL VIRGINIA
Abbott, a nutritional-products manufacturing company, is planning a $34 million expansion, a move expected to create 56 new jobs in Campbell County. Paid for in part by the Virginia Tobacco Region Revitalization Commission, Abbott’s expansion will take place during the next three years. The company now has 500 employees in Altavista. (The Lynchburg News & Advance)

Blue Ridge Optics has invested $1 million in real estate and equipment to expand its operations in Bedford County, a move expected to create 15 jobs during the next three years. Blue Ridge Optics produces high-tech optic lenses used in aerospace engineering, medicine, surveillance and other military uses around the world. The company now has 22 employees in Bedford. (Work It, Lynchburg)

Bon Secours Richmond Health System has launched its Bon Secours Value Network, a self-insured program for small and medium-sized businesses in Central Virginia. Self-funded plans are usually reserved for large companies with hundreds of employees. Value Network expects to make these plans available to companies with 10 to 100 employees. (Richmond Times-Dispatch)

Richmond-based Dominion Virginia Power is reassessing options for its offshore research project after being dropped from a Department of Energy program, making it ineligible for $40 million in funding. Dominion said the DOE withdrew the funding because the company could not guarantee the project would be in service by 2020. (VirginiaBusiness.com)

Atlanta-based consulting firm Thought Logic has opened an office in Richmond. The 2-year-old consulting firm has leased 3,600 square feet in Shockoe Slip. It plans to start hiring this summer, with a goal of having 100 Richmond-area employees in three to five years. (Richmond Times-Dispatch)

Richmond-based Union Bank & Trust has completed its acquisition of Old Dominion Capital Management Inc., a Charlottesville-based registered investment advisory firm with nearly $300 million in assets under management. Old Dominion will operate as a subsidiary of the bank from its offices in Charlottesville and Alexandria. (Richmond Times-Dispatch)

Richmond-based menswear brand Ledbury is relocating its downtown headquarters and store from Shockoe Bottom to 315 W. Broad St. in the city’s Arts District. Ledbury will move into the three-floor, 11,700-square-foot space in August. At street level, the first-floor storefront will open to a 2,000-square-foot retail store, slated to open in September. The second and third floors will be reserved for the Ledbury  offices. (VirginiaBusiness.com)

NORTHERN VIRGINIA
CSC plans to merge with Hewlett Packard Enterprise’s Enterprise Services segment, creating a $26 billion IT services company. The merger is expected to be complete by the end of March 2017, subject to shareholder and regulatory approvals. The combined company will serve more than 5,000 clients in 70 countries. The company expects its headquarters to remain in Tysons, according to a CSC spokesman. It has not been determined whether the merger will affect employment levels at the two companies. (VirginiaBusiness.com)

Hilton Worldwide Holdings Inc. named its real estate investment trust Park Hotels & Resorts as the McLean hospitality giant’s board approved spinning off its real estate and timeshare businesses. The timeshare business will be called Hilton Grand Vacations. The company now is a step closer to splitting into three publicly traded companies. The new entities expected to begin trading by the end of the year. (Washington Business Journal)

Gov. Terry McAuliffe announced in June that a site in Fauquier County has been selected for a planned 120-bed veterans care center. Construction of the new facility is planned to start in late 2017 and be completed in late 2019. The Northern Virginia Veterans Care Center will be the commonwealth’s third veterans care center, joining ones in Richmond and Roanoke. A fourth center also is planned for Hampton Roads. (News release)

Baltimore-based Segall Group, a retail real estate firm, is opening a Washington, D.C., regional office in Rosslyn. Segall Group, which was established in 2008, has also promoted Joe Fleischmann to principal and lead of the Rosslyn office. He will be responsible for the company’s growth in the region and the expansion of its brand. Fleischmann plans to recruit several retail brokers and support staff for the office. (VirginiaBusiness.com)

Walmart is seeking approval for an employee training center adjacent to its store in Fredericksburg’s Central Park. The site plan, submitted to the city by architecture and engineering firm Harrison French and Associates on behalf of Walmart Stores Inc., is undergoing internal evaluation. Walmart spokesman Kory Lundberg said three centers — in Dallas, Fort Smith, Ark., and Fayetteville, Ark. — have already opened. Walmart plans 200 of the centers in or near existing stores by the end of 2017. (The Free Lance-Star)

People – July 2016

EASTERN VIRGINIA
Julie Richardson Agnew has been named to the board of directors of West Point-based C&F Financial Corp. Agnew is an associate professor of finance and economics and director of the Boehly Center for Excellence in Finance at the College of William and Mary. (VirginiaBusiness.com)

Teresa L. ‘Terrie’ Edwards, president of Sentara Leigh Hospital in Norfolk, has been promoted to corporate vice president for the Sentara Peninsula and Western Tidewater regions. (VirginiaBusiness.com)

Newport News-based PBMares LLP has named Rob Klingensmith director of wealth management at PBMares Wealth Management LLC. Klingensmith was CEO of Pilatus Bank in Ta’Xbiex, Malta. (VirginiaBusiness.com)

Reeves W. Mahoney has been named to the Chesapeake Bay Bridge and Tunnel Commission. He is senior managing member at Mahoney Nashatka Richmond PLLC in Virginia Beach. (News release)

Lisa Paw has joined Timmons Group in Hampton Roads as a project engineer in the office’s land development group.  (Daily Press)

The Colonial Williamsburg Foundation has named James “Jim” Thomas vice president of development. Thomas was vice president for development and alumni relations and executive director of the Western Michigan University Foundation. (VirginiaBusiness.com)

SHENANDOAH VALLEY
Robert DiCenzo will serve as the new dean of Shenandoah University’s Bernard J. Dunn School of Pharmacy in Winchester. DiCenzo replaces Alan McKay, who retired in May after 21 years with the university. DiCenzo was professor of pharmacy practice and interim dean of the School of Pharmacy and Pharmaceutical Sciences at the Albany College of Pharmacy and Health Sciences in New York. (The Winchester Star)

Mitch Moore has been promoted to senior vice president at Shenandoah University. Moore will continue his duties as vice president for advancement. The last person to hold the senior vice president position was Bryon Grigsby, who left Shenandoah in June 2013 to assume the presidency at his alma mater, Moravian College and Moravian Theological Seminary in Bethlehem, Pa. (The Winchester Star)

The United Way of Front Royal-Warren County has announced that Lee Smith-Osina has retired as executive director. Merry-Lynn Sheetz has stepped in to run the day-to-day operations until a new executive director is hired. Sheetz currently serves as the executive administrative assistant. (News release)

SOUTHERN VIRGINIA
Brian Carlton has been named editor of the Martinsville Bulletin. He takes over from former editor Brandon Walker, who left in March. Carlton, 35, was managing editor of the News Virginian in Waynesboro. Both papers are part of BH Media. (Martinsville Bulletin)

Marc Crouse has been named executive director of STEP Inc., a community action agency that provides services in Franklin, Patrick, Henry, Pittsylvania and Bedford counties and the cities of Martinsville and Danville. He assumes the position after the retirement of Bill Loope, who had led the agency since late 2013. Crouse was director of administration, compliance and human resources for the Martinsville-Henry County Coalition for Health and Wellness. (Martinsville Bulletin)

The Pittsylvania County Community Action Inc.’s board of directors has appointed Everlena Ross as permanent executive director. Ross has worked for PCCA since 1988 in various positions, including interim executive director after the retirement of Sherman Saunders. (Danville Register & Bee)

David W. Stafford of Danville has joined Martinsville Smiles family dental practice. Stafford has practiced dentistry in Danville for the past three years. (Martinsville Bulletin)

SOUTHWEST VIRGINIA
Beth Doughty was named one of North America’s top 50 economic developers of 2016 by Consultant Connect. Doughty returned to the Roanoke Regional Partnership in March 2008 after nine years as president of the Roanoke Regional Chamber of Commerce. (The Roanoke Times)

James Chapman has been elected as rector of the board of visitors at Virginia Tech for the 2016-2017 academic and fiscal years. Chapman is a senior partner in the law firm of Crenshaw, Ware & Martin in Norfolk. (The Roanoke Times)

The Roanoke Higher Education Center’s first and only leader is retiring after nearly 17 years. Tom McKeon will work through the end of the year. A successor will be named before he retires. (The Roanoke Times)

Maria Belen Cassera has been appointed to the National Institutes of Health Center for Scientific Review. She is an assistant professor of biochemistry in the College of Agriculture and Life Sciences at Virginia Tech. (News release)

Larry D. Yates named to the Breaks Interstate Park Commission. He is the mayor of Haysi in Dickenson County. (News release)

The Bank of Fincastle in Botetourt County has hired four new managers, Cindy T. Bailey, marketing specialist; Peter C. Sackett, special assets manager; Natalie T. Sigmon, director of human resources; and Lisa C. Abbatello, assistant vice president and loan operations manager. (News release)

CENTRAL VIRGINIA
Sweet Briar College has named William Allen Jr. vice president for enrollment management. Allen was dean of enrollment services at West Virginia University Institute.  (VirginiaBusiness.com)

Charlie Brennan and Dara Day have joined Richmond-based Davenport & Co. Brennan, a first vice president and retirement and investment consultant, was with RidgeWorth Investments. Day, vice president and national account manager, has extensive experience with distribution partners. (News release)

Kim Kacani and George Moore have been named senior vice presidents at HHHunt Communities in Glen Allen. Kacani has worked for HHHunt Communities for more than two decades. Moore has worked with the company for nearly two decades. (VirginiaBusiness.com) 

Paige Mudd has been named executive editor and vice president of news at the Richmond Times-Dispatch a year after becoming the newspaper’s first female editor in its 166-year history. Michael Polucci, the newspaper’s outside advertising sales manager, was promoted to chief marketing and product development officer. (Richmond Times-Dispatch)

Former Virginia Tech President Charles Steger has been elected to the board of directors of  Charlottesville-based Focused Ultrasound Foundation. (News release)

Commonwealth Commercial Partners LLC has named Kenneth S. Strickler president of the Richmond-based company. Mark Claud will continue to be  CEO. Strickler helped found Commonwealth Commercial’s asset management division (StreamCo LLC) in 2008. (VirginiaBusiness.com)

 

NORTHERN VIRGINIA
Ashburn-based government services firm FCi Federal has promoted its president, Scott Miller, to CEO. Miller joined FCi Federal in 2012. The company’s founder and former CEO, Sharon Virts, will become executive chairman. (Washington Business Journal)

Tom Pageler has been named chief risk officer and chief information security officer at Neustar in Sterling. Pageler was chief risk officer and chief information security officer at DocuSign in San Francisco. (VirginiaBusiness.com)

Alexandria-based Dominion Dental Services has named Michael Brashears director of sales. He was Delta Dental’s sales executive for the Baltimore area. (VirginiaBusiness.com)

Alexandria-based PenFed Credit Union announced that its chairman of the board, Ed Cody, has been selected for induction into the Defense Credit Union Council’s Hall of Honor. (News release)

Richard Sellers named to the Virginia Board of Agriculture and Consumer Services. He is senior vice president, public policy and education for the American Feed Industry Association in Arlington. (News release)

Out & About – July 2016

This month's Out & About features photos from the Virginia Chamber of Commerce , the Virginia Association of Counties and the Virginia Living Museum.

To share photos of your company's special events with Virginia Business, e-mail your high resolution images along with photo ids to {encode=”[email protected]” title=”Adrienne R. Watson”}.

Out & About June 2016

This month's Out & About features photos from The Virginia Chamber of Commerce's Fantastic 50 awards, the Virginia Maritime Association’s annual banquet, the Sorensen Institute Spring Gala and the Virginia Communications Hall of Fame.

To share photos of your company's special events with Virginia Business, e-mail your high resolution images along with photo ids to {encode=”[email protected]” title=”Adrienne R. Watson”}.

It’s a long road to Wise

This magazine takes me all across Virginia, figuratively as a reader and literally as its publisher.  I’m a participant in a multitude of business and economic development events.  During a two-week period last month, I found myself in Norfolk, Chantilly, Charlottesville, Richmond, Lexington, Irvington and Wise — in that order! That’s a lot of time crisscrossing the commonwealth.

The road to Wise started on a foggy morning in Richmond.  For those who don’t know Wise County, it’s in far Southwest Virginia.  As the crow flies, it’s closer to state capitals in Kentucky, Ohio, Tennessee, North Carolina, Georgia and West Virginia than it is to Richmond.

Driving west on I-64, a light rain started in Louisa County.  I hit my usual pit stops, the Fifth Street exit in Charlottesville for gas at the Sunoco, and the Starbucks in Waynesboro for coffee.  Traffic slowed in a shroud of fog atop Afton Mountain.  On the other side of the pass, the rain was gone, and a bit of blue began to peek out from behind the clouds.

Pushing on westward to Staunton and the I-81 merge, I then headed south.  I stopped at the Pink Cadillac off the Natural Bridge exit for a quick lunch.  Not the best taco salad I’ve ever eaten, but it beats most of what else is quickly available without leaving the interstate to drive into Roanoke.

Lots of folks complain about the number of trucks on I-81. I don’t mind them.  It’s good to see business on the move.  This section of the interstate follows the ridgeline of the Appalachians and includes some of the best scenery Virginia has to offer.

I-81 rolls on, passing Lexington, Roanoke, Christiansburg and the exits for Blacksburg and Floyd.  If it’s possible for a road to have a rhythm, this one is made up of the small towns ticking by — Dublin, Pulaski, Draper and Wytheville (home of my all-time favorite name for a newspaper, The Bland County Messenger).  Keep going past Rural Retreat (how idyllic!), Marion and Chilhowie (another favorite name, everyone should be able to say, “I’ve been to Chilhowie!”)

The long ride south ended at the Abingdon exit, turning west on Route 58.  This is the same highway that begins in Virginia Beach and crosses the entirety of Southern Virginia to its westernmost tip.

For much of that distance, U.S. 58 features two lanes, lots of curves, lots of trucks and a long-standing reputation for highway danger.  But that’s not so much the case by the time the road gets west of Abingdon. 

In this part of the state, one sees the benefit of an industrial heritage, the need to move coal trucks eastward from the mines.  The need to haul coal has intersected with Virginia’s complex and arcane highway funding formulas to produce in Route 58 a road that is the equivalent of an interstate. It is a divided highway with two lanes each way and cloverleaf  exits.

Thanks to coal, Southwest Virginia has solid transportation infrastructure. Furthermore traffic congestion is non-existent, especially when compared with much of the rest of the commonwealth.

But still, the Southwest is rugged mountain country.  Following my car’s GPS I headed west, distracting myself from the long ride with phone calls.  When I got off the phone, the GPS kicked back in exhorting me to “Please make a U-turn.”  Obviously, I’d gone a bit off route.  Paying attention to directions and getting off the four-lane highway, the road began to narrow.

After taking a right turn, the road narrowed even more, winding up and down.  This was fun road for a lone driver, but it would have made a passenger with even the strongest stomach queasy.  Pulling hard uphill around a curve, a big yellow school bus suddenly appeared in the opposite lane.  The car barely shot between the passing bus and a steep roadside ditch. Whew!

Deep into beautiful farm country, the road finally began to widen, eventually to the point of having room for a yellow line again. Another short stretch of U.S. 58 took me past the Dominion Virginia City Hybrid Energy Center, then through a big cut in the rock (you know it when you see it) to St. Paul, and onward into the town of Coeburn. 
Next, it was up over Tacoma Mountain Road.  After another tire burning climb and brake-beating descent, I finally pulled up in front of the Inn at Wise, six-and-a-half hours after leaving Richmond.

Wise County is also the home of University of Virginia’s College at Wise.  I was there to attend the 2016 Southwest Virginia Economic Forum.  This part of Virginia is ground zero for the much-maligned coal industry.  The people are hard working and they are also working hard to reinvent the local economy.

More than 300 attended the forum; that’s bigger than some economic events I’ve been to in Richmond.  Much credit is due to U.Va.-Wise for serving as a place-making convener.

If you haven’t been to Southwest Virginia, you should visit.  It’s a beautiful place, full of friendly people and opportunity.  The drive may be long, but it’s well worth it.  You might even find yourself wanting to locate a business there.

Reagan’s policy initiatives led to era of economic prosperity

To the Editor:

I realize that Bernie Niemeier’s publisher’s column in your May issue [“Who’s the real Trojan horse?”] was intended to be light, tongue-in-cheek fare.  But buried in the middle of it was this statement:

“[T]rickle-down economics, popularized during the Reagan era, have never performed as promised.  If anything, they’ve contributed to economic inequality.”
If I had heard this from a Democratic Party spokesman, I would just roll my eyes and move on.  From the publisher of the state’s leading business publication, however, I expect more objectivity.

While the economy has indeed performed poorly for going on 16 years now, the period from 1982-1999 — the period ignited by Reagan’s policy initiatives — was one of the strongest, sustained periods of economic expansion in this nation’s history.  There is a wealth of objective economic data proving that the greatest beneficiaries of this were the middle and working classes, who saw benefits directly, not as scraps falling from the tables of the upper crust.  I am sure most of your readers would join me in hoping that we will see that kind of success recur in our lifetimes.

You should also know that “trickle-down economics” is a pejorative term, used during the 1980s by Reagan’s opponents.  Using that term is not persuasive.  It merely identifies the writer as a partisan, not an objective commentator. 

Most of the article was a joke, by design.  The attempt to revise history to massage Mr. Niemeier’s personal political beliefs was not funny.

Brad Marrs
Richmond

 

Mega-region proposal would create more auto-oriented sprawl 

To the Editor:

I suppose it is well not to have high expectations from a business magazine, which, after all, is about promoting business. But I guess I had higher expectations from Virginia Business than a uni-dimensional piece for a new mega-region between Hampton Roads and Richmond [“A big league move?” March issue], perhaps because of its excellent coverage of the urban renaissance in Norfolk, Richmond and elsewhere, and its recognition of the benefits.

The mega-region you outline appears to be little more than massive, auto-oriented suburban sprawl destroying the farms, forests and natural lands currently existing in eastern Henrico, Charles City, New Kent and what is left of James City and York counties’ non-sprawled areas.  Why do this? Little justification is offered other than the claim that Virginia’s economy needs a boost because of defense cuts and the larger region will have more political leverage.

Nothing is said of smart growth, alternative transportation or quality of life. Nor is there any recognition that a lot of businesses are not just looking for a plot of green space near an interstate interchange to cheaply destroy but want a region that is attractive — culturally, recreationally and beauty-wise — to educated young people that are uninterested in a region offering little but banal auto arteries lined by corporate chain big boxes, fast-food franchises, convenience stores and isolated auto subdivisions. Nor is there any discussion of economic costs, e.g., will the Historic Triangle’s national reputation and tourism be damaged by the vast auto sprawl you advocate, or how will the resulting environmental degradation affect us (what will become of the James River or Chesapeake Bay as forests are cut down and more tainted storm water pours into the watershed?).

Nor are alternatives discussed — why not better revitalize urban Newport News and Hampton, as well as continue Norfolk’s and Richmond’s renaissances? Why not get a higher-speed rail link going, with frequent trains — between Main Street Station in Richmond, downtown Norfolk and downtown Newport News — connected to a region-wide, light-rail system that goes most everywhere in Hampton Roads? Now that‘s a vision with the potential to create lots of good jobs for both regions.

I fear the vision you espouse is all about a lot of easy money for influential landowners, lawyers, accountants, developers, bankers and other entrenched interests, who see the damaging pathways of the past as more certain and obtainable in the near term than alternatives.

Mark Perreault
Norfolk

Followups – June 2016

VDOT announces $125 million in Richmond-area paving projects

The Virginia Department of Transportation says the paving program for its Richmond District is the largest ever for the region, in terms of lane miles and total spending.

The district will spend $125 million in resurfacing 1,540 lane miles of state-maintained roads, according to the Richmond Times-Dispatch.

The Richmond district is responsible for about 18,000 miles of roads. It oversees maintenance and construction in Amelia, Brunswick, Charles City, Chesterfield, Dinwiddie, Goochland, Hanover, Henrico, Lunenburg, Mecklenburg, New Kent, Nottoway, Powhatan and Prince George counties and the cities of Richmond, Colonial Heights, Hopewell and Petersburg.

The newspaper reported that $27 million will be spent on local interstate sections, including 78 miles of asphalt paving and 18 lane miles of concrete repairs, on sections of Interstates 95, 295, 85 and 195.

May’s issue of Virginia Business included an interview with Virginia Secretary of Transportation Aubrey Layne, who discussed the commonwealth’s new formula for transportation funding.

 

Volkswagen to pay $8.8 billion to repair or buy back diesel vehicles

Volkswagen Group expects to spend about $8.8 billion to repair or buy back diesel vehicles affected by an emissions software scandal.
Volkswagen Group of America is based in Herndon.

USA Today reports that the German automaker has struck a tentative civil settlement with the U.S. government, California authorities and consumers over the episode, which affects 11 million vehicles worldwide.

The settlement gives U.S. owners the option of buybacks or compensation. The agreement also includes a requirement to invest in environmentally friendly vehicles.
Volkswagen estimates that the total bill for the scandal will top $18 billion.

Volkswagen engineers installed “defeat device” software in its diesel vehicles. The software lowered emissions during testing but allowed higher emissions during normal driving to give the cars more power.