let's get to phil lebeau with the latest in chicago. phil. >> melissa, lots of shaking up going on in the executive suites at united airlines. let's start off with the ceo and chairman, jeff smisek. he's out. as are two of his lieutenants, neni foxhall. mark anderson was senior vp of corporate and government affairs p they have both stepped down as well. essentially, this all boils down to what's been going on with a federal investigation involving united airlines and the former chairman of the new york new jersey port authority. don't want to get too deep in the weeds here but let's go back to 2011 when united was extending or in discussions to extend its lease at newark, which is one of its hubs. shortly after those discussions were taking place united added daily service -- i shouldn't say daily service. added service between newark and columbia, south carolina which was near the home or a second home of the chairman of the port authority. and for some time there has been an investigation into why united added this service. was this a

phil lebeau, thank you so much. when we come back on squawk alley, as xi jinping talks about cyber attacks. the pope making his way from washington to new york. some call him the social pope, and we'll give you the staggering numbers about his social reach. as law and order svu kicks into its 17th season, we'll speak with the pecktive producer on that long-running series. dow is now down 52. we're back in a minute. >>> a hooj issue such as economic reform and cyber crime on the heels of this week's apple store hack. in fact, over 300 apps in apple's app store have taken a deeper dive into cyber security and what this means for consumers. brian the chief security officer -- it's also with us. brian, when you look at the way that the threat matrix, the sorts of security threats that you are looking at have changed over the past two or three years, what has risen the fastest? >> i think the biggest thing is the persistence of the threat. we talk a lot about sophistication and persistence. some attacks clearly are sophi

phil lebeau, "nightly business report", mobile, alabama. >>> investors cheer good phone numbs from apple. that's where well-gin tonight's market focus. the tech giant announcing sales of the new i foiismt 6 2k7 k and 6s plus the company tee pre-orders, the phones will go on sale september 25th. shares roses to 115.31. >>> a report from "barron's" weighed a alibaba today. it questioned the accuracy of some of the claims alibaba has made about user count and shopper spending. alibaba responded in a statement saying we take strong issue about the reporting and feel compelled to set the record straight. it went on to defend itself against the allegations. shares tumbled. >>> and shares of russia's version of google rose today. this is russian authorities ruled google was abusing the market position in the country and would face penalty. yandex saw its stock pop. >>> shares of raptor pharmaceuticfarm su pharmaceuticals went the other way after the company said it would stop developing its liver treatment. they settled at $7.52. >>> solara holdings will be acquired by an affiliate of vista equ

phil lebeau is also there. phil, i'm sure the company doesn't want to address this, but do you think they will at the event tonight? >> i think michael horn, who is the ceo of volkswagen of america, will at least touch on the subject during prepared remarks at this event where they're going to be unveiling the refreshed version of the passat. now, whether or not he takes questions from reporters isn entirely different question. i suspect that he may duck those questions and he may just briefly touch on it during prepared remarks. >> phil, they said they're going to halt the sales of certain models involved in recall. obviously, these would be the new cars. how unusual a move isthat? >> very unusual. it's only done when automakers realize if we sell this model we are breaking the law, we know that there is a defect or a severe problem with a particular vehicle and it is not being sold in good faith. what's interesting about this is how long this goes before they can resume sales of those models. again, it's only

phil lebeau tells us what is driving the results and which brands outperformed. >> as expected, august turned out to be a red hot month for auto sales with almost every automaker reporting better than expected sales. take a look at the largest automakers and while these numbers may not seem impressive, a gain of 5.4% from ford was actually double what most were expecting. and even toyota, a decline of 8.8%, many were expecting sales to drop 12%. what was selling last month? same thing that has been selling basically for the last six months. trucks and suvs. jeep sales up 18% last month. and you look at general motors, this is a perfect example of a company that is in the sweet spot of the market right now. truck and suv sales both up double digits last month. and the average transaction price up $660 for general motors topping $34,000. one reason why jen not togenera has been posting strong numbers, expected to continue following the report of august sales being relatively strong. it sets up what many are expecting to be a strong fall and winter for auto sales. the pace of sales being

phil lebeau has been following the story and joins us now. il, the epa is alleging that volkswagen rigged those cars so they could pass the clean air test. how did they allege that they did that? >> these vehicles had what's called a defeat device as part of the software in the vehicle which unless you're looking for it you're not going to see it. it allows a vehicle to pass emission tests, but otherwise it will not have to meet those standards as it's going about driving around on the roads. and as a result what you're looking at is a situation where the epa says volkswagen has 482,000 vehicles basically that were rigged to pass clean air tests and in fact they did not meet those emission standards. by the way, the epa says that volkswagen has essentially admitted to this happening. we will probably see some type of a recall remedy announced in the relatively short term because they're going to have to fix these vehicles. >> so fundamentally, what i hear you saying here is that they tricked the system so that they could beat the test but in r

phil lebeau reports. >> reporter: as the scandal involving rigged diesel engines grows at volkswagen, the embattled automaker is preparing for a new ceo. sources say mattias mueller, who has run porsche the last five years, will be tabbed to take over volkswagen. his elevation will come as other executives at vw leave the company. how many and what knowledge they may have had about the rigged engine software remains to be seen, but it's clear regulators in europe and around the world are just starting to ask questions including here in the u.s. where the researcher who uncovered the deception in vw's diesel engines says the amount of pollution the cars were actually spitting out was substantially higher than what vw had been advertising. >> we saw the large differences in numbers. that's when we knew that the vehicle was exhibiting off-cycle emission behavior. >> reporter: meanwhile, volkswagen dealers here in the u.s. are still unable to sell several clean diesel models. and the negative press may be keeping customers away from dealerships. truecar says volkswagen is the only major a

that's the latest regarding volkswagen. >> phil lebeau.ne of the worst performing it stocks today was goldman sachs. earlier today, the ceo lloyd blankfein announced he haslem foema, an illness his doctors say is a highly curable form of the disease. he underwent a series of tests after not feeling well this summer. and had a biopsy last week, which revealed the cancer. >>> still ahead, with all those health insurance mergers, will it hurt consumers? what industry executives said today under oath. health care deductibles are rising as wages barely budge. that's the conclusion of a new study by the kaiser family foundation. a health policy research group. since 2010, deductibles have risen more than six times faster than workers' earnings and almost three times as fast as premiums during that same time. >> for that report on health care deductibles comes as the chief executives of etna anthem defend their proposed merge in other words front of a senate panel. some lawmakers are concerned consolidation among some of the nation's biggest carr

phil lebeau, "nightly business report," chicago. >>> american airlines resumed flights after computer problems briefly grounded some flights. the flights affected were at three airports, chicago's o'hare, dallas/fort worth, and miami. 300 flights were delayed and the ground stop lasted two hours. americans apologized for the inscreens and says the issue was not hacking related. >>> verizon warns about future earnings. the company says earnings may plateau next year because of changing consumer habits. still, the ceo believes the company will outperform despite the competition. >> so, is there impact? is there innovation? yeah, i think that's the mark of a healthy industry. but we've been able to hold our own. and grow, and deliver profitability. >> shares fell 2% to $45.23. >>> on to rite aid now, a down day for that drugstore chain. it missed on the bottom line. the sales did before cast. it also trimmed its guidance for the full year. shares slid 11% to $7.66. the generic drug make preego urged shareholders to reject milan's unsolicited take over of the firm saying they undervalued

phil lebeau, thank you for now. have much more on this break united airlines shake-up when we come right back here on "the closing bell." >>> welcome back. just having a close look here at what is happening with yahoo! shares after hours. a key part of yahoo!'s divestiture of alibaba is that it would get some tax advantages for shareholders. now, the irs has to rule on that. it looks as though there has been a decision in which the irs is determining not to grant a requested ruling. here's a look at shares of yahoo!. they're down after hours. if i'm reading this right, it's by about 4 1/2%. if this is interpreted as not being in favor of giving yahoo! this actual spinoff tax break, obviously that's a big potential negative for the shares. and even for the deal itself. but, mike, it's not so clear whether we can go so far as to say this has been determined yet. >> no, we can't. and of course it's my company. so i don't want it get too deep in speculating about what's going on here but that's my interpretation. >> sar

let's get a view from phil lebeau. he joins us on the phone from a.m. la b alabama. , a significant move for airbus? >> very significant. when you look at what airbus has laid outgoing back a couple of years ago where the backlog of orders became so strong that at some point they knew they would have to increase production. the logical step for airbus was to add a final assembly plant in north america. it helps on a couple of areas, not only financially. giving an interview with the german publication over the weekend saying, look, we believe cost wise it's actually going to be lower cost for us to produce the a320 in the united states versus adding another plant in europe but more importantly for airbus this plant gives them a greater foothold in north america, not only for landing more commercial orders in the future but keeping them focused on trying to get into more of the defense contracts that are offered here in the united states. for the longest period of time they have primarily been losing out to boeing and if you look at the latest deal at the most clear ex

phil lebeau joining us.ion of who may want to step into what you could arguably call a hornet's nest and become the ceo of vw? >> it is a hornet's nest, but ts still the world's largest automaker at least by sales volume in the first half of this year. so it's not as though they're taking over a job where everyone is like, stay clear of here. it is a company that has a lot of potential but they're in the midst of a terrible mess right now. just within the last couple hours executive committee from volkswagen came out and now said martin winterkorn has resigned as ceo of volkswagen. you've got more executives expected to follow according to our colleagues at cnbc in europe who have been talking with sources and the new ceo will be named on friday, and announcing -- and in announcing the resignation of martin winterkorn the executive committee said, this is the most interesting thing, in the view of the executive committee, criminal proceedings may be relevant due to the irregularities and they're talking abou

our phil lebeau. walter isaacson on the united board. long has this investigation been going on? >> i hate to say it, but i can't talk about that. i can talk about oscar who is a wonderful person who has deep experience in both the transportation sector, consumer products, was there at pepsi and coke. as you heard him say both on the analyst call but in a wonderful memo, he said to employees, he's going to focus on customer service. he's going to focus on being innovative. he has a reputation, a great reputation for being innovativi. >> is united itself under investigation? >> this is something i'm not going to go down -- >> i know -- it's public and not public. but it was just so shocking for people, especially that had a cfo leave and i think go to paypal or something like that recently, and now the departure of these top executives, many people wondering, again, what's the back story? and how much of that can you tell us at this point? >> i think right now, the real story is focusing on a guy i've known for quite a while. >> oscar? >>

electric model s coming up. >>> the driverless google car hitting the road today. >> and cnbc's phil lebeau front row seat or maybe a back seat, i don't know, joins us now with his take on what may be the future of driving, phil? >> hi, guys. thank you we're here on the google campus joined by chris the director of the google self-driving prototype car program here at google and as we're talking with you we will roll video of the drive we've gone on in the google prototype. this ride today, this is all about giving people a little better perspective on where we are when it comes to self-driving cars. give us some sense of how far away we are from this becoming an everyday reality? >> it's been amazing to see how the technology has developed over the last few years. we don't really have a set timeline because the first and foremost this is about safety and we don't want to rush that. but our team's goal is that my 12-year-old son won't have to get his driver's license because he will get places in cars like this. >> when i was in the car, one thing that stood out, we couldn't show the front

we'll get the official number in a couple of hours, carl, back to you. >>> thanks so much, phil lebeauith auto sales. take a look at u.s. stocks, our selloff is accelerating after paring back losses from earlier. the dow down close to %. nasdaq down 1.5%. it was pointed out that volume is relatively unspectacular, should we make too much of that? >> i can tell you for a fact a good many traders who were not supposed to be in, came in for trading. and smartest money that i've worked with in 30 years, the only orders i had today were buy orders. so it is, it is we're trying to absorb, based on what we've been presented, the facts of the slowdown in china and the data we saw don't justify what's happening here today. there has to be something else or this is another huge overreaction. we're back to around the levels we were tuesday/wednesday. not unexpected with the volatility. we knew that was going to come with this. for the first day of the month it's a little surprising. >> some people are talking about the volume. it's not as big as it was last week that followed options expiration.

phil lebeau with more. >> brian, within the last hour it's been a number of developments coming out of germany. the headquarters for volkswagen where ceo martin winterkorn announced his resignation essentially saying is he shocked by the developments over the last week involving the emissions scandal. he offered his resignation to step down. the board didn't stop him. they said it's not just economics, but the loss of trust that they're worried about right now. trust coming from customers not only in the u.s., but around the world. a successor to winterkorn is expected to be named on friday, and along those lines our folks in europe have been talking with senior executives at volkswagen who are saying they expect more vw executives to depart over the next couple of days as the scandal continues to take a toll in the management ranks at vw. shareholders, whether it's because winterkorn is out or because they're sensing, look, the stock has really been beaten down, got a bump today and went higher. take a look at the suppliers who might be impacted by a fall-off in revenue and in sales f

cnbc's phil lebeau. >> what happens next. are you driving a vehicle no longer in compliance with air rules. will you get a new vehicle. will the engine be modified. >> reporter: so many unknowns. volkswagen has apologized and is promising swift action. until then, drivers like nate silver are sitting idle. >> i'm waiting to see what they do to fix the problem. >> reporter: at the woodland's volkswagen location, they are not waiting. this year's affected models have been moved off the showroom floor to the back of the lot. janet shamlian, nbc news, houston. >>> we're back in a moment to pay a tribute to a legend who was as famous for his word play as his play on the field. >>> of the many clever sayings attributed to yankees' great yogi berra over his lifetime, this one comes to mind tonight. always go to other people's funerals, he said, otherwise they wouldn't come to yours. the world lost yogi last night at the age of 90. a man who knew how to win but also how to transcend the game. here is harry smith. >> yogi's blast into

cnbc's phil lebeau covers the airline business. >> the question is whether united added flights between newark, new jersey and columbia, south carolina as some sort of quid pro quo as part of the negotiation for extending its lease at newark airport. >> reporter: in a statement united airlines says the departures announced today are in connection with the company's previously disclosed internal investigation related to the federal investigation associated with the port authority of new york and new jersey. federal law enforcement sources tell nbc news tonight today's developments are an extension of the bridgegate scandal involving the port authority. david samson was forced out of the port authority last year amid that scandal. united's flights from newark to columbia ended three days later. smisek being replaced on a temporary basis for now by united board member oscar munoz, who's a former railroad executive. lester? >> all right, tom, thanks. >>> we're following brought late breaking news here. let's go to miguel almaguer. >> good evening. a close call in las vegas. a british airway

phil lebeau has our report on the resignation of volkswagen's ceo. >> reporter: the crisis involving rigged diesel emissions has claimed its first executive. martin vinterkorn has resigned saying he didn't knowingly do anything wrong. but the vw board said it may be possible there are criminal proceedings involving executives at the automaker. meanwhile vw's board will choose the next ceo on friday. herbert diest, mathias mueller, and rue better stiller are considered front-runnerers. their job will be to stabilize an automaker who has admitted it screwed up and sold clean diesel cars that really weren't clean. in fact, the epa says almost 500,000 vw diesel cars hive been out on the road emitting up to 40 times more pollution than allowed. consumers feel duped. >> i think it's appalling, honestly. i was shocked. the fact that they would put software in to cheat the smog testing is unbelievable. >> i don't think i'd buy a vw any time soon. >> before i thought of hem as the peak of the peak of automakers, really great, very trust worthy, good quality cars. now i'm just -- i don't know

phil lebeau, "nightly business report," fort worth, texas. >> coming up, lesson plans. the big money behind a startup that wants to change education in america. >> in addition to the fed meeting that begins tomorrow, the consumer price index is out. the fed will be watching that. so is a measure of home builder sentiment with the index from the national association of home builders. fedex will release quarterly results. that is what to watch for wednesday. >>> the wife of the late steve jobs wants to improve the u.s. education system. maureen powell jobs is committing $50 million to create new high schools telling "the new york times" her project ames to modernize curriculums and develop new ways of teaching. she chairs an organization called xq america which will accept proposals, partner with winning teams and support at least five schools over the next five years. >>> she's not the only one spearheading an investment in education. other well-known nameses in technology and silicon valley are, as well. julia boorstin tells us about one startup drawing big name backers

. >> daniel, this is phil lebeau. you were part of the group that worked on uncovering the defeat devices on caterpillar trucks back in '98. you're familiar with this. give people some perspective on how sophisticated this software is in the volkswagen vehicles. in other words, this is not just something that could, you know, quickly be put in. there's some complexity here, correct? >> correct. i guess i should back up briefly. the 1998 consent decrees between the department of justice and the six settling heavy duty engine manufacturers, that was actually the. em manufacturers coming to us and after the fact we helped them develop this technology called nu submissions testing and helped verify that their post consent decree vehicles were in compliance actually. but onto the control strategies, you know, the strategies that manage the engine and that's very closely related to those strategies that are used to manage the after treatment devices, it's a very complex system and it's a trade-off between fuel economy, dura

phil lebeau joins us with more. hey phil. >> this is a big deal with what google is doing.he new head of the google car program will be john craft check. he joins google after previously being one of the top executives at true car. but where many people are familiar with john is from his term as the head of hyundai north america from 2006 to 2013 time frame and during his tenure, they had fantastic growth in the united states. prior to that he worked as one of the product chiefs at ford. so he is steeped in knowledge in the auto industry and the importance of this move for google is two-fold. one they bring a true car guy into the program. and that's not a knock against chris who is in charge of google's auto program. chris is a technical person. he approaches things in terms of where the future is. john comes into this as an auto industry veteran and more importantly he is a believer in the disruptive power of automous drive vehicles. it's unclear if google wants to license technology, licensing thenology or get into the licensing of automobiles but john krafcik is a very

phil lebeau is in alabama at the company's new plant. take it away, phil. >> thank you, simon. five or six years ago, if i would have told through will be a plant in south carolina and a plant in alabama building airplanes, most people would have said no way. it won't happen. now we have that with this new plant here by airbus. it's in mobile. it will be building four a320s a month when full production starts in 2017. 1,000 employees. they're about to have the ceremony in a couple minutes. full production coming in 2017. the reason this plant is crucial for airbus is because it has a huge backlog, especially of its most popular model, the narrow body a-320. the planes built here are only going to carriers in north america, some of them could be exported from here. look at the growth in orders that airbus has experienced over the last six years. a few minuteses ago we talked with the head of airbus and he talked about the company extending its delivery pace. >> first of all, it's to produce four aircraft a month at the end of 2017. this is a big challenge. then we want to be glo

phil lebeau was there. verything here, phil. >> i don't know if they're everything, but there's no doubt that the falcon wing doors on the model x are getting the most attention. in part because we've seen gull one doors before the falcon wing doors, people say will this really work? we will show you video that, yes, even in a narrow space these doors will work. here was the scene last night when elon musk at this event here in fremont, california turned over the keys to the first five buyers of the model x. they bought founder series edition model xs. each of these going for at least $132,000. by the way, they have more than 20,000 model x electric suvs z reservati reservations. if you ordered one, 8 to 12 months to get one. we had a chance to take one out on a limited test drive. production ramp begins right now. but it picks up in the fourth quarter. musk last night was he tasitant say how quickly that ramp up will continue. the challenges on the cost side, he spent time talking about that but also spoke

let's check in with phil lebeau. phil, you're going to i'm sure talk about the american story. you were earlier this week in their brand new operations center down in ft. worth. does this have anything to do with that? >> we don't know if it has to do with the new operation center, but we know they're pretty busy right now because we have a ground stop for american flights but only at three of the hubs. those flights coming in or going out of dallas, chicago, and miami. earlier it was reported this was a nationwide ground stop. that is not true. ts not a nationwide ground stop for all american flights. only those flights going into or out of dallas, chicago, miami. it's our understanding that people are unable to check into their flights and, therefore, unable to board those flights. we've been told that perhaps, according to the faa, we could see the flights resume out of those hubs starting at 2:30 eastern time. we're in contact with american. we'll let you know a little bit more about what exactly is causing this ground stop, but, again, it's only at those three hubs. ts not

phil lebeau in chicago has more on that. >> the scandal rose at volkswagen, and now it involves the vw being accused of manipulating diesel engines in europe. here's the latest regard this scandal. the transport minister for germany says that volkswagen has admitted to the transportation ministry in germany that it is rigging engines in europe. meanwhile, vw is planning to name those responsible for what's been happening not only here in the united states, but potentially also in europe. that's expected to happen tomorrow. also, tomorrow there will be a board meeting, and we can tell you that it is expected that at that meeting vw of america's ceo michael horn is expected to be announcing -- they are expected to announce that he is leaving the company. cnbc has talked with sources in europe, and we've also seen the reports out of there. he is expected to leave. in addition, two other board members at the vw are expected to leave the company. meanwhile, bmw shares have been under pressure today. down as much as 6%, 6359%. basically because of a report out of germany questioning the dies

phil lebeau joins us with those details. >> last night, elon musk said, i think we might have gotten little carried away with the model x. the reason he says that is because there are a number of technological features in the suv that are getting a lot of attention. he delivered the first five model xs last night. these are editions that are a little bit special. for the first five customers who get them, the bis price is going to come closer to 80,000 eventually. people have been asking me all day, what happens if you're parked too close to another car? we saw them in action and they work. the big test now for tesla, the delivery and the ramp-up of production of the model x. and when you look at the deliveries of tesla vehicles over the last four years, it's an impressive ramp-up that we've seen here. an estimated 50,000 vehicles this year, but next year is a big jump. as you take a look at shares of tesla, we're also putting up mobile eye there. the censors and technology are a big part of not only the model x, but also the model s. we've talked about this at length. that is the fu

phil lebeau is speaking with american airlines ceo. hi, phil. >> tyler, i get this question from a lot of people. look, it's been a couple years since us airways and american airlines got together. the merger is complete, right? well, not entirely. they still have the vreservatio system to put together. that will happen next month. and this operations center is another big step. this is the new operations center. 1600 people work in this facility inside this facility. they are either dispatching or monitoring more than one million american flights every year. so this is really the nerve center for american airlines. this is the last step in the integration of american and us airways. take a look at the profit growth for american over the last four years. now if you go back to whether they were in bankruptcy and they lost, you know, a little over $1.5 billion, then they turned profitable. in the last couple years, it's ratcheted up thanks in large part to lower jet fuel. this year they're on pace to have record profitability but doug par

our phil lebeau has more on that. >> carl, they are in full damage control mode at volkswagen.ust a few minutes ago martin, the ceo of volkswagen issued a video statement out of germany essentially apologizing again for the diesel deception, if you will, saying i am endlessly sorry that we betrayed the trust of our customers. he goes on to say let me make this very clear, manipulation of vw must never happen again. this was a full apology. there was no further insight given into where things stand in terms of an investigation or how quickly things will be resolved. remember, earlier today, guys, volkswagen said that an estimated 11 million diesel engines around the world have some type of deviation in their software, and it's going to cost the company at least $7.2 billion to remedy this situation. that's a third quarter charge they'll be taking. again, an apology from martin winterkorn. no further details regarding this investigation. back to you. >> we'll watch that. phil, we know what's happened to their shares in frankfurt and how it's pressured some broader markets as well