Mass. AG sues Volkswagen over emissions cheating

Attorney General Maura Healey opened a new front in the wide-ranging scandal enveloping Volkswagen AG, filing a lawsuit Tuesday that claims top executives at the German automaker knew of emissions problems with its diesel cars for years. Both the company’s former chief executive and the man promoted to replace him, Matthias Müller, were aware of emissions troubles on models of its Audi diesel cars as far back as 2006, according to lawsuits filed by Healey and the attorneys general of New York and Maryland. Yet for years Volkswagen allowed as many as 600,000 cars to be sold in the United States with devices that tricked emissions testing procedures and even proclaimed the cars as green and clean in its advertising. The suits filed by Healey, Attorney General Eric Schneiderman of New York, and Attorney General Brian Frosh of Maryland allege Volkswagen violated state environmental laws by selling cars that emitted far more pollutants than allowed. They seek damages that could easily reach hundreds of millions of dollars and may compound Volkswagen’s struggle to emerge from the so-called “diesel-gate” scandal. The company has just agreed to a record $14.7 billion settlement with federal regulators that requires it to buy back nearly a half-million cars in the United States, and a separate $570 million agreement in June with 44 states — including Massachusetts — over consumer fraud issues. Volkswagen is also negotiating with California over how best to repair the cars, and faces an ongoing federal criminal investigation. Volkswagen called the new lawsuits “regrettable,” and noted it has already made concessions to help repair the environmental damage from its cars. — TIM LOGAN


New, smaller Target opens
in Boston

The newest Target to open in Boston, on Commonwealth Avenue, is small — really, really small. The floor area of the new store, which opened Wednesday, is about one-10th the size of some Target locations. Situated near the Boston University campus, it will cater to students. If you’re looking for children’s clothes or DVDs, don’t bother, because it doesn’t sell them. Think of it more along the lines of an overgrown convenience store, sizewise. The new Target, the 29th in Greater Boston, measures just 16,100 square feet, compared to the typical location, which is about 130,000 square feet, a Target spokeswoman said. It sits about a mile from Target’s Fenway location, a multifloor behemoth at 160,000 square feet. — MEGAN WOOLHOUSE


Chief executive of Biogen to step down


The next chief executive of Biogen Inc. will inherit a company that is financially sound and a powerhouse in multiple sclerosis drugs. But the new leader will also be challenged by waning sales growth and limited near-term prospects for new blockbuster products. That was the view of analysts after the Cambridge company said Thursday that CEO George A. Scangos (left) will step down in coming months. Scangos, 68, is credited with leading a turnaround in the six years since he took the top job at the largest Massachusetts biotech company. Scangos said more than once over the past year that he had no plans to retire. In an interview, he said his decision grew out of discussions with the company’s board that “got concrete relatively recently.” Biogen has recently installed new senior research, commercial, and technical operations executives as it prepares for a transition to a new era. Scangos will stay until Biogen names a successor, a process that could take four to nine months. Many on Wall Street say Biogen needs to be more aggressive in buying smaller biotechs with drugs that can revive its growth prospects in the next five years, as it presses forward with developing high-risk therapies for Alzheimer’s, spinal muscular atrophy, and other neurodegenerative diseases for which there are few, if any, effective treatments. Biogen announced Scangos’s planned departure along with second-quarter financial results that showed revenue increasing 12 percent and earnings 22 percent from a year earlier. The company also said it would buy back up to $5 billion of its common stock over the next three years. — ROBERT WEISMAN


Baker wants MBTA pension fund to be managed
by state retirement system

Governor Charlie Baker said the MBTA pension fund, plagued by a widening gap between its assets and obligations, should be managed by the larger state retirement system. In a wide-ranging speech Wednesday, marking one year since a fiscal control board took over the Massachusetts Bay Transportation Authority, Baker said the $1.5 billion fund was in a “free fall” that could threaten its ability to pay retirement benefits for 11,700 current and former transit workers. “We believe the T’s pension system cannot survive as a standalone entity,” Baker said, noting that its assets had declined by $89 million in the past year alone. The pension fund has come under intense scrutiny in recent years for failing to disclose losses in a fraudulent hedge fund and running its operation in secrecy, despite receiving tens of millions of dollars annually from taxpayers. Baker said he will ask the Legislature next year to act so the MBTA fund can be managed by the $60 billion retirement system for the state’s public employees and teachers. Baker, speaking at the State House, highlighted a long list of areas in which the transit authority itself must still cut costs and boost performance, from its operating budget to worker abuse of overtime to problem-plagued contracts. Baker said the MBTA has not been underfunded, but “poorly led and horribly managed” — and is still in “very tough shape.” — BETH HEALY AND NICOLE DUNGCA


South Shore Hospital plans upgrades after failed merger with Partners

After a planned merger with Partners HealthCare failed last year, South Shore Hospital is trying to reinforce its place in the market with more than $200 million in facilities and software upgrades. The 370-bed Weymouth hospital has received $137 million in bond financing from the state’s economic development agency and plans to raise money from donations to help cover the remainder of the costs. South Shore is planning to add two floors to an existing building, constructing a new critical-care unit for patients needing complex care. It will convert the current critical-care unit into a medical and surgical area with 24 new beds.
That work is expected to cost $62 million. South Shore is also spending $160 million to launch an electronic health records system developed by Epic Systems Corp. of Verona, Wis. South Shore, a dominant provider south of Boston, had planned for several years to be acquired by Partners, the state’s largest health care system. But Partners abandoned the plan after state health officials and a judge voiced antitrust concerns, worried that the deal would have led to higher medical spending statewide. — PRIYANKA DAYAL MCCLUSKEY


EMC shareholders approve sale
to Dell

EMC Corp. shareholders voted overwhelmingly last week to approve the sale of the company to Dell Inc., a deal worth more than $60 billion that creates a behemoth supplier of equipment for corporate data centers. The buyout was endorsed by 98 percent of shareholders who voted during a brief meeting Tuesday at EMC’s Hopkinton headquarters. About 74 percent of the stockholders voted, EMC said. Longtime chief executive Joe Tucci, who will retire after the sale is complete, said the result “clearly supports our view that the combination of Dell and EMC will create a powerhouse in the technology industry.” Shareholders also approved a multimillion-dollar “golden parachute” payment package for Tucci and EMC’s other top executives. Tucci (left, with Michael Dell) could reap nearly $24 million in cash and stock, according to company regulatory filings. The Dell buyout ends decades of independent ownership for EMC, which grew from its founding in 1979 to become the most valuable technology company in Massachusetts. — CURT WOODWARD