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Fahrvergnugen

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1938 ad for the “KDF-Wagen,” the Beetle’s first incar­na­tion

COMMENT: In the 1990’s, Volk­swa­gen craft­ed an Amer­i­can adver­tis­ing cam­paign that fea­tured the Ger­man word “Fahrvergnu­gen” to entice peo­ple to buy its cars.

Now, VW has found a potent legal strat­egy for shield­ing its exec­u­tives from poten­tial lia­bil­ity in the diesel emis­sions scan­dal: just cite Germany’s pri­vacy laws to avoid pro­vid­ing emails or any oth­er com­mu­ni­ca­tions to US inves­ti­ga­tors.

We also note that VW exec­u­tives have long con­duct­ed their busi­ness affairs in such a way as to avoid mobile phones being used for sur­veil­lance. When the issue of mass data col­lec­tion by NSA and GCHQ became at the end of the 1990’s, indus­tri­al espi­onage was the focal point of inves­ti­ga­tion and Ger­many’s appar­ent pique. 

Volk­swa­gen’s behav­ior sug­gests that the com­pa­ny was aware of the NSA’s activ­i­ties long before Eddie the Friend­ly Spook (Snow­den) embarked on his “op.”

Mar­tin Bor­mann (right) with Himm­ler

We note that Fer­di­nand Piech, the chair­man of the board of VW, resigned in April of last year, per­haps know­ing of the emis­sions scan­dal that was about to emerge.

Volk­swa­gen evolved from the first “bee­tle” car, termed the KDF-Wagen–“strength through joy” car. Designed by Fer­di­nand Porsche, whose grand­son-in-law head­ed the firm until recent­ly, the bee­tle was a major pro­pa­gan­da tool for the Reich.

As is the case with the oth­er Ger­man “core cor­po­ra­tions,” Volk­swa­gen is con­trolled by the Bor­mann cap­i­tal net­work. Rep­re­sen­ta­tives of the firm were present at the August, 1944 meet­ing in Stras­bourg (France), where plans for the Bor­mann direct­ed flight-cap­i­tal pro­gram and sub­se­quent post­war “Ger­man eco­nom­ic mir­a­cle.”

“VW Refus­es to Give Amer­i­can States Doc­u­ments in Emis­sions Inquiries” by Dan­ny Hakim and Jack Ewing; The New York Times; 1/9/2016.

Cit­ing Ger­man pri­vacy laws, Volk­swa­gen has refused to pro­vide emails or oth­er com­mu­ni­ca­tions among its exec­u­tives to attor­neys gen­eral in the Unit­ed States, imped­ing Amer­i­can inves­ti­ga­tions into the company’s emis­sions-cheat­ing scan­dal, accord­ing to offi­cials in sev­eral states.

The rev­e­la­tion sig­nals a turn­ing point in the now open­ly frac­tious rela­tions between Volk­swa­gen and Amer­i­can inves­ti­ga­tors, after claims by the Jus­tice Depart­ment, in its own inquiry this week, that the com­pany had recent­ly “imped­ed and obstruct­ed” reg­u­la­tors and pro­vided “mis­lead­ing infor­ma­tion.”

Sig­nif­i­cantly, inves­ti­ga­tors say, Volkswagen’s actions lim­it their abil­ity to iden­tify which employ­ees knew about or sanc­tioned the decep­tions. Find­ing the peo­ple respon­si­ble for the cheat­ing is impor­tant to the law­suits: Penal­ties would be greater if the states and oth­ers pur­su­ing Volk­swa­gen in court could prove that top exec­u­tives were aware of or direct­ed the activ­i­ty.

Our patience with Volk­swa­gen is wear­ing thin,” New York’s attor­ney gen­eral, Eric T. Schnei­der­man, said. “Volkswagen’s coop­er­a­tion with the states’ inves­ti­ga­tion has been spot­ty — and frankly, more of the kind one expects from a com­pany in denial than one seek­ing to leave behind a cul­ture of admit­ted decep­tion.”

He was one of sev­eral attor­neys gen­eral to express dis­sat­is­fac­tion in response to inquiries from The New York Times.

“I find it frus­trat­ing that, despite pub­lic state­ments pro­fess­ing coop­er­a­tion and an expressed desire to resolve the var­i­ous inves­ti­ga­tions that it faces fol­low­ing its cal­cu­lated decep­tion, Volk­swa­gen is, in fact, resist­ing coop­er­a­tion by cit­ing Ger­man law,” said Connecticut’s attor­ney gen­eral, George Jepsen. “We will seek to use any means avail­able to us to con­duct a thor­ough inves­ti­ga­tion.”

...

When he was named chief exec­u­tive short­ly after the scan­dal broke, Matthias Müller said “My most urgent task is to win back trust” and promised “max­i­mum trans­parency.” But open­ing up a com­pany known for its par­tic­u­larly insu­lar cul­ture has been a tall order.

Ger­man inves­ti­ga­tors are not mak­ing sim­i­lar com­plaints about Volk­swa­gen. Klaus Ziehe, a spokesman for pros­e­cu­tors in Braun­schweig, a city close to Volkswagen’s head­quar­ters in Wolfs­burg, said that under Ger­man law, pros­e­cu­tors were allowed to car­ry out raids of Volkswagen’s Wolfs­burg offices to gath­er pos­si­ble evi­dence that could include email exchanges. He did not elab­o­rate on what they had found.

“We are not and do not want to be depen­dent on that which Volk­swa­gen gives us,” Mr. Ziehe said in a writ­ten response to ques­tions. At the same time, he said, the com­pany had been work­ing with Ger­man inves­ti­ga­tors.

“We can’t com­plain about our coop­er­a­tion with the com­pany,” Mr. Ziehe said. “We have the impres­sion that we have received every­thing that we have specif­i­cally request­ed.”

Volk­swa­gen, in a state­ment, said it could not com­ment on con­tin­u­ing pro­ceed­ings.

Ger­many, a close ally of Amer­ica, is known for strict pri­vacy laws like its Fed­eral Data Pro­tec­tion Act, which lim­its access to data, par­tic­u­larly out­side the Euro­pean Union. And it is not the only Euro­pean coun­try with pri­vacy laws; sim­i­lar issues with Swiss laws have also ham­pered Amer­i­can inves­ti­ga­tors in their pur­suit of FIFA, soccer’s world gov­ern­ing body. Strains over data-shar­ing between the Unit­ed States and Europe also emerged after the spy­ing rev­e­la­tions linked to Edward J. Snow­den, the for­mer Nation­al Secu­rity Agency con­trac­tor.

Ger­many also has a his­tory of refus­ing to extra­dite its cit­i­zens to the Unit­ed States. Still, Amer­i­can inves­ti­ga­tors have dealt with Ger­man cor­po­ra­tions for many years and often reach ami­ca­ble set­tle­ments.

The Unit­ed States, where the scan­dal orig­i­nated, is seen as poten­tially con­duct­ing tougher inves­ti­ga­tions of Volk­swa­gen than Ger­many, where the car­maker is one of the nation’s largest employ­ers. Pros­e­cu­tors in Braun­schweig ini­tially said they would con­duct a for­mal inves­ti­ga­tion of Mar­tin Win­terkorn, V.W.’s for­mer chief exec­u­tive, but quick­ly back­tracked.

The Jus­tice Depart­ment, which filed a civ­il suit against Volk­swa­gen this week, has not ruled out fil­ing a crim­i­nal charge or tar­get­ing spe­cific exec­u­tives. A Jus­tice Depart­ment spokesman declined to say whether it was fac­ing obsta­cles in its own inquiry.

Lack­ing access to offi­cials at Volk­swa­gen head­quar­ters makes it more dif­fi­cult to deter­mine who was respon­si­ble for the wrong­do­ing, William H. Sor­rell, the Ver­mont attor­ney gen­eral, said in a recent inter­view in Burling­ton. “One of the things that’s impor­tant to the state and oth­ers in terms of look­ing at the egre­gious­ness or seri­ous­ness of the con­duct is who at Volk­swa­gen knew what and when,” Mr. Sor­rell said.

“It doesn’t make this attor­ney gen­eral feel all warm and fuzzy,” he said, that infor­ma­tion “has been com­ing out as grad­u­ally as it has been.”

Mr. Schneiderman’s office declined to com­ment on whether Amer­i­can inves­ti­ga­tors were col­lab­o­rat­ing with Ger­man pros­e­cu­tors. In declin­ing to turn over evi­dence to Amer­i­can inves­ti­ga­tors, Volk­swa­gen has prin­ci­pally cit­ed the Ger­man Fed­eral Data Pro­tec­tion Act, an aide said in an email, as well as the Ger­man Con­sti­tu­tion, the Euro­pean Con­ven­tion on Human Rights, deci­sions of the Ger­man Con­sti­tu­tional Court and the Euro­pean Court of Human Rights, “and (for good mea­sure) pro­vi­sions of the Ger­man Crim­i­nal Code.”

Volk­swa­gen has main­tained that a rel­a­tively small num­ber of engi­neers and man­agers were respon­si­ble for the cheat­ing. None of the nine Volk­swa­gen exec­u­tives who have been sus­pended in con­nec­tion with the scan­dal were mem­bers of the man­age­ment board. But sev­eral, like Wolf­gang Hatz, who head­ed engine and trans­mis­sion devel­op­ment, report­ed direct­ly to mem­bers of the board.

The rev­e­la­tions may raise ques­tions about the com­mit­ment of Mr. Müller to clean­ing house. He was a pro­tégé of Mr. Win­terkorn and has close ties to a num­ber of the cen­tral fig­ures in the inves­ti­ga­tion. He was V.W.’s head of prod­uct plan­ning when the cheat­ing took place.

In a tac­it admis­sion by Volk­swa­gen that it needs to smooth tense rela­tions with Amer­i­can offi­cials, Mr. Müller will meet with Gina McCarthy, the E.P.A. admin­is­tra­tor, on Wednes­day at the company’s request, a spokes­woman for the agency said.

Offi­cials at the office of the Texas attor­ney gen­eral had no imme­di­ate com­ment. The Cal­i­for­nia attor­ney general’s office declined to com­ment.

The Envi­ron­men­tal Pro­tec­tion Agency, along with reg­u­la­tors in Cana­da and Cal­i­for­nia, have also accused Volk­swa­gen of installing devices to cheat on emis­sions tests on more vehi­cles than acknowl­edged, a claim Volk­swa­gen dis­putes.

Ger­many has faced crit­i­cism in the past for laws that place a high­er val­ue on per­sonal pri­vacy than pub­lic inter­est. Ger­man con­fi­den­tial­ity laws may have pre­vented doc­tors from inform­ing the Ger­man air­line Lufthansa that one of its pilots, Andreas Lub­itz, was under­go­ing treat­ment for depres­sion. In March, Mr. Lub­itz delib­er­ately crashed a pas­sen­ger jet oper­ated by the Lufthansa sub­sidiary Ger­man­wings into a moun­tain in France, killing him­self and 149 oth­ers who were aboard.

“In the E.U., data pro­tec­tion is a fun­da­men­tal right that is in the Euro­pean char­ter,” said Paul M. Schwartz, a law pro­fes­sor at the Uni­ver­sity of Cal­i­for­nia, Berke­ley and co-direc­tor of its Cen­ter for Law & Tech­nol­ogy. The Ger­man fed­eral con­sti­tu­tional court has also iden­ti­fied a right to “infor­ma­tional self-deter­mi­na­tion,” he said. Such laws are “real obsta­cles,” he said, adding, “Euro­peans real­ly take pri­vacy seri­ous­ly.”

Still, while Amer­i­can reg­u­la­tors have faced chal­lenges before from Euro­pean cor­po­ra­tions, the lev­el of frus­tra­tion in the Volk­swa­gen case is strik­ing. Philip Urof­sky, a part­ner at Shear­man & Ster­ling and for­mer assis­tant chief of the Jus­tice Department’s fraud sec­tion, said, “Obvi­ously, a Euro­pean com­pany ought to first and fore­most fol­low its own domes­tic laws.”

That said, pri­vacy laws have the poten­tial to be mis­used by com­pa­nies. “They frankly tie U.S. inves­ti­ga­tors’ hands, or even law firms doing inter­nal inves­ti­ga­tions, in ways that, in my per­sonal opin­ion, were not antic­i­pated or expect­ed,” Mr. Urof­sky said.

Such issues as the invok­ing of pri­vacy laws are “not fre­quent, but they’re also not unusu­al,” said Ben­jamin M. Lawskyfor­mer super­in­ten­dent of the New York Depart­ment of Finan­cial Ser­vices and a for­mer top offi­cial in the state attor­ney general’s office. But, he said, “it is the rare case that it ends up being a total obstruc­tion.”

Mr. Lawsky left the depart­ment last year, short­ly after it was involved in a a $2.5 bil­lion set­tle­ment with Deutsche Bank over alle­ga­tions that it had manip­u­lated inter­est rates.

While he did not want to draw analo­gies to his own pre­vi­ous cas­es, Mr. Lawsky called such issues frus­trat­ing. Still, he said, inves­ti­ga­tors some­times even­tu­ally find ways to get what they want — whether by get­ting the infor­ma­tion from Amer­i­can com­puter servers, through nego­ti­a­tions with com­pa­nies or in coop­er­a­tion with for­eign law enforce­ment.

“Often when you start dig­ging down, those rules are sub­ject to inter­pre­ta­tion,” he said. “If you real­ly push at how those rules have been inter­preted, you some­times can find ways to get around them.”

“Merkel’s Mobile Habit” by Chris Bryant; Finan­cial Times [Blogs]; 10/24/2013.

. . . . Ger­man cor­po­rate exec­u­tives have long assumed that their mobile phone calls could be mon­i­tored.

At com­pa­nies such as car­mak­er Volk­swa­gen and chem­i­cal com­pa­ny Evonik, it is stan­dard prac­tice for mobile phones to be left out­side pri­or to board­room dis­cus­sions or when in sen­si­tive meet­ings on for­eign trips.

“Our secu­ri­ty peo­ple col­lect up the mobile phones and put them to one side” Audi board mem­ber Ulrich Hack­en­berg told the FT last month. . . . 

“Design­ing Cars for Hitler: Volk­swa­gen and Porsche’s Nazi Roots” by Diet­mar Hawranek; Der Spiegel; 7/21/2009.

. . . . Porsche’s son-in-law, Anton Piëch, began man­ag­ing the plant in 1941. In his study “The Volk­swa­gen Plant and Its Work­ers in the Third Reich,” the Ger­man his­to­ri­an Hans Momm­sen writes: “In the sum­mer of 1943, Anton Piëch blunt­ly declared that he had to use cheap East­ern work­ers in order to ful­fill the Führer’s wish that the Volk­swa­gen be pro­duced for 990 Reichs­mark.”

In the ear­ly 1990s, this part of the his­to­ry of the VW Group caught up with Fer­di­nand Piëch, the son of the for­mer plant direc­tor Anton Piëch. Fer­di­nand Piëch, the head of Audi, was try­ing to rise to the top of the Volk­swa­gen Group.

Piëch, who had pushed aside a num­ber of exec­u­tives along his career path, had his share of ene­mies. Some of them spread the rumor that Piëch was inca­pable of being the head of VW, hint­ing at the head­lines it would pro­duce in the impor­tant US mar­ket if the son of the for­mer Wolfs­burg plant direc­tor, who had used forced labor­ers, became the head of the mod­ern-day VW Group.

Fer­di­nand Porsche him­self served Hitler dur­ing the war as the head of his tank com­mis­sion. He sup­port­ed Hitler’s pow­er and prof­it­ed from the regime. . . . An Allied inves­tiga­tive com­mis­sion lat­er declined to file charges against Porsche, although he, his son Fer­ry and his son-in-law Anton were impris­oned in France for sev­er­al months. . . .

Mar­tin Bor­mann: Nazi in Exile; Paul Man­ning; Copy­right 1981 [HC]; Lyle Stu­art Inc.; ISBN 0–8184-0309–8; p. 25.

. . . . Present were Dr. Kas­par rep­re­sent­ing Krupp, Dr. Tolle rep­re­sent­ing Rochling, Dr. Sin­ceren rep­re­sent­ing Messer­schmitt, Drs. Kopp, Vier, and Beer­wanger rep­re­sent­ing Rhein­metall, Cap­tain Haberko­rn and Dr. Ruhe rep­re­sent­ing Bussing, Drs. Ellen­may­er and Kar­dos rep­re­sent­ing Volk­swa­gen­werk, engi­neers Drose, Yanchew, and Kopp­shem rep­re­sent­ing var­i­ous fac­to­ries in Posen, Poland (Drose, Yanchew, & Co., Brown-Boveri, Herkuleswerke, Buschw­erke, and Stadtwerke); Dr. Mey­er, an offi­cial of the Ger­man Naval Min­istry in Paris; and Dr. Stross­ner of the Min­istry of Arma­ment, Paris. . . .

Mar­tin Bor­mann: Nazi in Exile; Paul Man­ning; Copy­right 1981 [HC]; Lyle Stu­art Inc.; ISBN 0–8184-0309–8; p. 281.

. . . . But it is just as true that the riv­er of wealth back into West Ger­many from assets sequestered by Mar­tin Bor­mann and the cor­po­ra­tions that par­tic­i­pat­ed in his bril­liant­ly con­ceived pro­gram of flight cap­i­tal was a major force in the recov­ery of the nation–and the best-kept secret in all of Ger­man his­to­ry. The return of cap­i­tal start­ed slow­ly. As fac­to­ries were rebuilt and revved up for pro­duc­tion, mon­ey from Swiss bank accounts rep­re­sent­ing their secret accounts flowed into the Rhineland. It was termed invest­ment mon­ey, and the first com­pa­nies to enjoy its impact were those with demand prod­ucts: auto­mo­biles, steel and chem­i­cals. Fer­di­nand Porsche, who designed the famed “Tiger” tank, redisigned Hitler’s “peo­ple’s car,” the Volk­swa­gen, and a new fac­to­ry was erect­ed to turn it out. . . .

Discussion

16 comments for “Fahrvergnugen”

  1. Auto indus­try lob­by­ists are prob­a­bly burn­ing the mid­night diesel right now: The EU’s ‘no cheat­ing required’ emis­sions-test­ing dream regime for the man­u­fac­tur­ers might final­ly require cheat­ing:

    The Verge
    EU pro­pos­es stricter emis­sions test­ing after VW scan­dal

    New frame­work would give EU more pow­er over the test­ing process

    By James Vin­cent on Jan­u­ary 27, 2016 09:00 am

    The Euro­pean Union has announced plans for a “major over­haul” of car emis­sions test­ing fol­low­ing the Volk­swa­gen scan­dal, with new laws that would give it more con­trol across the EU. The new­ly-pro­posed frame­work aims to ensure that vehi­cles meet stan­dards by mak­ing test­ing cen­ters more inde­pen­dent. Pre­vi­ous­ly, cen­ters com­pet­ed for work from man­u­fac­tur­ers who paid them direct­ly. Under the new pro­to­col, fees would instead be col­lect­ed by EU mem­ber states and dis­bursed. This, says EU law­mak­ers, will help “avoid finan­cial links” between man­u­fac­tur­ers and the com­pa­nies respon­si­ble for approv­ing their cars for the mar­ket.

    The plan would com­ple­ment a sep­a­rate pro­pos­al to intro­duce “real dri­ving emis­sions” tests — tests that occur when the car is on the road, not in a cen­ter. Vot­ing on the pro­pos­al is set to go ahead next week, although the Euro­pean Par­lia­men­t’s envi­ron­men­tal com­mit­tee has rec­om­mend­ed that law­mak­ers reject the bill for being too easy on man­u­fac­tur­ers. The law orig­i­nal­ly allowed a max­i­mum over­shoot of 60 per­cent of the EU emis­sions lim­it, but this was lat­er raised to 110 per­cent. (Tests sug­gest on-road emis­sions are actu­al­ly 400 to 500 per­cent high­er than the lim­it.) The US Envi­ron­men­tal Pro­tec­tion Agency began expand­ing its own real world emis­sions test­ing last year.

    The new­ly-pro­posed EU test­ing frame­work would also include more sur­veil­lance of cars already on the mar­ket, includ­ing spot-checks “to detect non-com­pli­ance at an ear­ly stage.” To enforce stan­dards, the EU would have pow­ers to “sus­pend, restrict, or with­draw” licens­es giv­en to car test­ing cen­ters, and the abil­i­ty to fine man­u­fac­tur­ers as much as €30,000 per vehi­cle if they’re caught break­ing emis­sions stan­dards. The new frame­work still requires approval from EU mem­ber states and the Euro­pean Par­lia­ment if it is to become law.

    “The plan would com­ple­ment a sep­a­rate pro­pos­al to intro­duce “real dri­ving emis­sions” tests — tests that occur when the car is on the road, not in a cen­ter. Vot­ing on the pro­pos­al is set to go ahead next week, although the Euro­pean Par­lia­men­t’s envi­ron­men­tal com­mit­tee has rec­om­mend­ed that law­mak­ers reject the bill for being too easy on man­u­fac­tur­ers. The law orig­i­nal­ly allowed a max­i­mum over­shoot of 60 per­cent of the EU emis­sions lim­it, but this was lat­er raised to 110 per­cent. (Tests sug­gest on-road emis­sions are actu­al­ly 400 to 500 per­cent high­er than the lim­it.)”
    Yep, the EU now has a chance to show that it’s seri­ous about actu­al­ly reg­u­lat­ed auto emis­sions. Or, rather, had a chance:

    AFP
    EU law­mak­ers back diesel test loop­holes despite VW scan­dal

    Feb­ru­ary 3, 2016 9:37 AM

    Stras­bourg (France) (AFP) — EU law­mak­ers on Wednes­day waved through plans to allow diesel car mak­ers to exceed pol­lu­tion lim­its, in a big vic­to­ry for the auto indus­try after the Volk­swa­gen scan­dal.

    The Euro­pean Com­mis­sion, the exec­u­tive arm of the EU’s 28 mem­ber states, announced the new lim­its in Octo­ber as the VW scan­dal raged, part of plans to adopt more real­is­tic pol­lu­tion mon­i­tor­ing based on real road con­di­tions instead of lab­o­ra­to­ry tests.

    But the pro­pos­als con­tained major loop­holes for car-mak­ers that were nego­ti­at­ed secret­ly by experts from mem­ber states, anger­ing envi­ron­men­tal­ists who react­ed with a major push to block the new lim­its at the Euro­pean Par­lia­ment.

    MEPs vot­ed 323 in favour of leav­ing the loop­holes — known as “con­for­mi­ty fac­tors” — with 317 MEPS vot­ing against them. There were 60 absten­tions.

    The com­mis­sion has been accused of ignor­ing evi­dence that Ger­many’s Volk­swa­gen was mas­sive­ly cheat­ing to pass pol­lu­tion tests, a rev­e­la­tion made by US reg­u­la­tors.

    It said in an email that it wel­comed par­lia­men­t’s green light, hail­ing it as a much need­ed tran­si­tion to tougher “real-dri­ving” pol­lu­tion tests.

    “By bet­ter reflect­ing the actu­al lev­el of emis­sions in real dri­ving con­di­tions, these tests will reduce the net amount of air pol­lu­tion emit­ted by diesel cars,” com­mis­sion spokes­woman Lucia Caudet said in an email.

    The com­mis­sion said Wednes­day that a raft of reforms announced last week would tight­en the screws on pol­lu­tion.

    Europe’s auto indus­try, which employs 12 mil­lion peo­ple, insist­ed the new lim­its were unprece­dent­ed.

    “This reg­u­la­tion will be a major chal­lenge for the indus­try, with new and more strin­gent test­ing stan­dards that will be extreme­ly dif­fi­cult to reach in a short space of time,” said Erik Jon­naert, head of the Brus­sels-based car lob­by ACEA .

    “How­ev­er auto­mo­bile man­u­fac­tur­ers wel­come the much-need­ed clar­i­ty, and are eager to move for­ward by imple­ment­ing the new test­ing con­di­tions as soon the reg­u­la­tion is adopt­ed,” he said.

    Under the com­mis­sion’s plan, from Sep­tem­ber 2017 new diesel mod­els would be allowed to exceed the EU’s offi­cial nitro­gen oxide lim­it by more than dou­ble.

    From 2020, the dis­crep­an­cy would fall to 50 per­cent more than the lim­it, indef­i­nite­ly.

    ...

    “From 2020, the dis­crep­an­cy would fall to 50 per­cent more than the lim­it, indef­i­nite­ly.”
    Well, the even­tu­al 50 per­cent waiv­er is indeed bet­ter than the 500 per­cent over the safe­ty guide­lines that these cars are cur­rent­ly rou­tine­ly exceed­ing. Still, for a con­ti­nent where half the cars run on diesel, capit­u­lat­ing to indus­try lob­by­ing in the wake of this scan­dal and giv­ing an indef­i­nite waiv­er to exceed lim­its that are seemed to be “safe” by 50 per­cent isn’t the breath of fresh air the EU needs.

    Posted by Pterrafractyl | February 4, 2016, 11:35 am
  2. Ever since it became clear that VW might be unable to actu­al­ly fix many of its diesel-fuel cars to get them into com­pli­ance with US reg­u­la­tions, one of the big ques­tions how been whether or not the fines and costs of doing busi­ness in the US would be so sig­nif­i­cant that the com­pa­ny would just pull out of the US mar­ket alto­geth­er. Well, EPA found a pos­si­ble com­pro­mise solu­tion and it’s going to be inter­est­ing to hear the response from Ger­man pol­i­cy-mak­ers who are under­stand­ably con­cerned about what the VW scan­dal will do to Ger­man jobs: The EPA wants VW to “make up” for what it did by pro­duc­ing elec­tric vehi­cles in the US:

    Reuters

    EPA asks Volk­swa­gen to make elec­tric cars in U.S.: Welt am Son­ntag

    Sun Feb 21, 2016 7:27am EST

    FRANKFURT

    U.S. author­i­ties have asked the Ger­man car­mak­er Volk­swa­gen (VOWG_p.DE) to pro­duce elec­tric vehi­cles in the Unit­ed States as a way of mak­ing up for its rig­ging of emis­sion tests, the Ger­man news­pa­per Welt am Son­ntag report­ed.

    The U.S. Envi­ron­men­tal Pro­tec­tion Agency is cur­rent­ly in talks with Volk­swa­gen with the aim of agree­ing on a fix for near­ly 600,000 diesel vehi­cles that emit up to 40 times legal pol­lu­tion lim­its.

    The paper, which gave no source for its report, said the EPA was ask­ing VW to pro­duce elec­tric vehi­cles at its plant in Chat­tanooga, Ten­nessee, and to help build a net­work of charg­ing sta­tions for elec­tric vehi­cles in the Unit­ed States.

    Some of Volk­swa­gen’s cars already fea­ture elec­tric or hybrid motors. It was not clear from Welt am Son­ntag’s report whether the EPA was ask­ing VW to pro­duce new mod­els or exist­ing ones.

    Five months after the emis­sions scan­dal broke in the Unit­ed States, Europe’s lead­ing car­mak­er has yet to come up with a tech­ni­cal fix for almost 600,000 diesel cars, and is fac­ing a grow­ing num­ber of legal claims.

    “Talks with the EPA are ongo­ing and we are not com­ment­ing on the con­tents and state of the nego­ti­a­tions,” a VW spokesman said. EPA declined to com­ment.

    Mean­while, week­ly tabloid Bild am Son­ntag said Hans Dieter Poet­sch, the chair­man of Volk­swa­gen’s super­vi­so­ry board, was sum­moned by Ger­man trans­port min­is­ter Alexan­der Dobrindt on Feb. 16 to give an update on the car­mak­er’s progress in tack­ling the cri­sis.

    Accord­ing to the arti­cle, Poet­sch pledged Volk­swa­gen would do every­thing to solve the cri­sis, regard­less of how that might impact indi­vid­u­als and posi­tions at the com­pa­ny.

    A spokesman for Volk­swa­gen con­firmed that Poet­sch and Thomas Steg, head of group gov­ern­ment rela­tions at VW, updat­ed Dobrindt on Feb. 16 on the sta­tus quo of its inter­nal inves­ti­ga­tion, but declined to give details about the nature of dis­cus­sions.

    ...

    “The paper, which gave no source for its report, said the EPA was ask­ing VW to pro­duce elec­tric vehi­cles at its plant in Chat­tanooga, Ten­nessee, and to help build a net­work of charg­ing sta­tions for elec­tric vehi­cles in the Unit­ed States.”
    Well, man­u­fac­tur­ing elec­tric cars in the US and help­ing to build a net­work of charg­ing sta­tions would be a pret­ty slick pub­lic rela­tions move. We’ll see if the US’s pro­pos­al, if real, includes a dra­mat­ic reduc­tion in VW’s fines as part of the deal. While it would be absurd to com­plete­ly elim­i­nate a fine, it’s still a poten­tial­ly use­ful prece­dent for deal­ing with mas­sive cor­po­rate envi­ron­men­tal crimes: if your com­pa­ny is caught with a busi­ness mod­el that trash­es the envi­ron­ment, it has to make a long-term com­mit­ment towards build­ing the green infra­struc­ture of tomor­row that would make its ille­gal pol­lu­tion unnec­es­sary in the first place. Too bad the EPA did­n’t make BP agree to a sim­i­lar plan. And while this pro­pos­al would no doubt gen­er­ate con­cerns over poten­tial­ly lost Ger­man jobs, it’s worth recall­ing that a large num­ber of those future elec­tric car man­u­fac­tur­ing jobs are already lost no mat­ter where the cars are built.

    So it will be inter­est­ing to see if any­thing comes from this pro­pos­al. Espe­cial­ly as the inves­ti­ga­tion drags on, because if it turns out that VW’s exec­u­tives were all ful­ly aware for years about what was going on and the scan­dal gets even worse, who knows, maybe VW real­ly will just give up on the US mar­ket for now and pull out alto­geth­er. But if VW’s rep­u­ta­tion is only par­tial­ly dam­aged, but not so much that it’s worth pulling out of the US entire­ly, well, then some­thing like a big ‘green’ makeover for VW by accept­ing the EPA’s deal could be exact­ly what the com­pa­ny needs. A lot depends on how deep the scan­dal goes:

    Reuters
    Volk­swa­gen probe finds manip­u­la­tion was open secret in depart­ment: news­pa­per

    FRANKFURT
    Sat Jan 23, 2016 6:29am EST

    Volk­swa­gen’s (VOWG_p.DE) devel­op­ment of soft­ware to cheat diesel-emis­sions tests was an open secret in its engine devel­op­ment depart­ment, Ger­many’s Sued­deutsche Zeitung news­pa­per said on Fri­day, cit­ing results from VW’s inter­nal inves­ti­ga­tion.

    Many man­agers and staff deal­ing with emis­sions prob­lems in the depart­ment knew of or were involved in devel­op­ing the “defeat devices”, said the news­pa­per, which researched the mat­ter with region­al broad­cast­ers NDR and WDR.

    A cul­ture of col­lec­tive secre­cy pre­vailed with­in the depart­ment, where the instal­la­tion of the defeat soft­ware that would cause the car­mak­er’s biggest ever cor­po­rate cri­sis was open­ly dis­cussed as long ago as 2006, Sued­deutsche said.

    But it said there were excep­tions: a whistle­blow­er, who was him­self involved in the decep­tion and has been giv­ing evi­dence to inves­ti­ga­tors hired by Volk­swa­gen, alert­ed a senior man­ag­er out­side the depart­ment in 2011.

    This man­ag­er, how­ev­er, did not react, the news­pa­per said.

    Staff mem­bers in engine devel­op­ment felt pres­sure from the man­age­ment board to find a cost effec­tive solu­tion to devel­op clean diesel engines for the U.S. mar­ket.

    Rather than telling Volk­swa­gen’s man­age­ment board the rules could not be adhered to, staff mem­bers in engine devel­op­ment decid­ed to push ahead with manip­u­la­tion, Sued­deutsche report­ed.

    “With­in the com­pa­ny there was a cul­ture of ‘we can do every­thing’, so to say some­thing can­not be done, was not accept­able,” Sued­deutsche Zeitung said, quot­ing the VW inter­nal report which includ­ed tes­ti­mo­ny from a staff mem­ber who took part in the fraud.

    “Instead of com­ing clean to the man­age­ment board that it can­not be done, it was decid­ed to com­mit fraud,” Sued­deutsche report­ed in its Sat­ur­day edi­tion.

    Staff in engine devel­op­ment took com­fort from the fact that reg­u­la­tors would not be able to detect the fraud using con­ven­tion­al exam­i­na­tion tech­niques, the paper fur­ther said.

    Engine man­age­ment soft­ware deliv­ered by Bosch was then manip­u­lat­ed in Wolfs­burg, where Volk­swa­gen has its head­quar­ters, Sued­deutsche Zeitung said.

    Manip­u­la­tion start­ed in Novem­ber 2006, Sued­deutsche Zeitung said.

    Volk­swa­gen has said that to the best of its knowl­edge only a small cir­cle of peo­ple knew about the manip­u­la­tion, which Europe’s biggest car­mak­er admit­ted to U.S. envi­ron­men­tal author­i­ties in Sep­tem­ber last year.

    It has said it is not aware of any involve­ment by top man­age­ment or super­vi­so­ry board mem­bers in the affair, which top­pled its chief exec­u­tive last year and is like­ly to cost bil­lions of dol­lars for recalls, tech­ni­cal fix­es and law­suits.

    A Volk­swa­gen spokesman declined to com­ment on Fri­day on what he called “spec­u­la­tion”, say­ing the inves­ti­ga­tion — for which Volk­swa­gen has hired U.S. law firm Jones Day — was con­tin­u­ing.

    ...

    Volk­swa­gen ini­ti­at­ed an amnesty pro­gram last year for wit­ness­es who could shed light on the scan­dal, promis­ing not to fire employ­ees who came for­ward with infor­ma­tion by Nov. 30.

    The car­mak­er plans to give the first pub­lic results of its inves­ti­ga­tion at the annu­al share­hold­ers’ meet­ing in April.

    “Many man­agers and staff deal­ing with emis­sions prob­lems in the depart­ment knew of or were involved in devel­op­ing the “defeat devices”, said the news­pa­per, which researched the mat­ter with region­al broad­cast­ers NDR and WDR.”
    That sure does­n’t look good for VW, but note that the top man­age­ment con­tin­ues to be spared in this assess­ment:

    ...
    Volk­swa­gen has said that to the best of its knowl­edge only a small cir­cle of peo­ple knew about the manip­u­la­tion, which Europe’s biggest car­mak­er admit­ted to U.S. envi­ron­men­tal author­i­ties in Sep­tem­ber last year.

    It has said it is not aware of any involve­ment by top man­age­ment or super­vi­so­ry board mem­bers in the affair, which top­pled its chief exec­u­tive last year and is like­ly to cost bil­lions of dol­lars for recalls, tech­ni­cal fix­es and law­suits.
    ...

    “It has said it is not aware of any involve­ment by top man­age­ment or super­vi­so­ry board mem­bers in the affair.”
    At least that was offi­cial com­pa­ny pol­i­cy as of that Jan­u­ary report. And since it seems rather implau­si­ble that none of those exec­u­tive knew con­sid­er­ing that “many man­agers and staff deal­ing with emis­sions prob­lems” knew or were involved with devel­op­ing and installing the “defeat devices” since 2006, it’s going to be extra inter­est­ing to see if many more whis­tle-blow­ers emerge once names start get­ting names and indi­vid­u­als start get­ting thrown under the bus.

    Although, who knows, maybe VW’s top exec­u­tives will man­age to make it through the entire scan­dal suc­cess­ful­ly assert­ing their long-run igno­rance:

    The Wall Street Jour­nal
    VW Memo Warned of Emis­sion Issues in 2014
    A memo refers to a defeat device in dis­cussing the results of emis­sions tests from U.S. envi­ron­men­tal author­i­ties

    By William Boston
    Feb. 15, 2016 4:39 p.m. ET

    BERLIN—A senior Volk­swa­gen AG exec­u­tive com­mis­sioned with trou­bleshoot­ing and known inter­nal­ly as “the fire­man” warned the company’s top man­age­ment in May 2014 about an impend­ing inves­ti­ga­tion by U.S. envi­ron­men­tal author­i­ties into whether the Ger­man car mak­er was using “test recog­ni­tion” on some of its diesel engines.

    The warn­ing, com­mu­ni­cat­ed in a note to then-Chief Exec­u­tive Mar­tin Win­terko­rn, came from Bernd Got­tweis, a qual­i­ty-con­trol exec­u­tive who ran a team of prod­uct sleuths that Volk­swa­gen man­age­ment dis­patched around the world to put out qual­i­ty flare-ups before they grew into a full-fledged blaze.

    The memo makes the first known ref­er­ence to a defeat device in the inves­ti­ga­tion into Volkswagen’s emis­sions-cheat­ing scan­dal and might sug­gest that the company’s top exec­u­tives knew more than they are say­ing now. It isn’t known whether Mr. Win­terko­rn saw the memo.

    “There was a short memo from Mr. Got­tweis about this issue, but it would be a mis­take to assume that it was clear back then that we knew it was cheat­ing soft­ware. That was not clear,” a per­son famil­iar with the sit­u­a­tion said. “We don’t know if Win­terko­rn read the memo or not.”

    Mr. Win­terko­rn couldn’t be reached through his attor­ney for com­ment.

    The exis­tence of Mr. Gottweis’s memo was report­ed by the week­ly Bild am Son­ntag news­pa­per on Sun­day. The news­pa­per claims to have inter­nal Volk­swa­gen doc­u­ments that turned up dur­ing the inves­ti­ga­tion led by U.S. law firm Jones Day, and quotes from the memo, which it says Mr. Win­terko­rn received on May 23, 2014. Bild said the memo was part of a pack­age of doc­u­ments that Mr. Win­terko­rn took home over that week­end.

    Volk­swa­gen became aware in April 2014 that a study con­duct­ed by emis­sions experts at West Vir­ginia Uni­ver­si­ty dis­cov­ered that Volk­swa­gen diesel-pow­ered Pas­sat and Jet­ta mod­els spewed more than 30 times the allow­able lev­els of nitro­gen oxide, or NOx, emis­sions dur­ing nor­mal dri­ving, even though the vehi­cles passed lab­o­ra­to­ry tests.

    The aca­d­e­mics shared their data with the Cal­i­for­nia Air Resources Board, which began try­ing to fig­ure out why the NOx emis­sions were so high.

    In the memo, Mr. Got­tweis dis­cussed the emis­sions tests from U.S. envi­ron­men­tal author­i­ties and said Volk­swa­gen engi­neers in the U.S. were at a loss to explain the prob­lem.

    “No plau­si­ble expla­na­tion for the dra­mat­i­cal­ly increased NOx emis­sions can be giv­en to the author­i­ties,” Mr. Got­tweis wrote, accord­ing to Bild, which claims to have copies of the doc­u­ments. “It is to be assumed that the author­i­ties will sub­se­quent­ly exam­ine VW sys­tems to deter­mine if Volk­swa­gen has installed test recog­ni­tion into the engine con­trol soft­ware (a so-called defeat device).”

    The Ger­man car mak­er admit­ted in August that the NOx emis­sions were masked by soft­ware that shut down emis­sions con­trol when the cars were on the road.

    In Sep­tem­ber, after the Envi­ron­men­tal Pro­tec­tion Agency dis­closed the emis­sions fraud, Volk­swa­gen admit­ted installing the soft­ware on near­ly 11 mil­lion vehi­cles world-wide.

    The com­pa­ny faces reg­u­la­to­ry and crim­i­nal inves­ti­ga­tions and civ­il lit­i­ga­tion in the U.S. and Europe, and up to $46 bil­lion in poten­tial fines.

    ...

    Dur­ing his years of ser­vice, he was in charge of a group called the Com­mit­tee for Prod­uct Secu­ri­ty, a team known with­in Volk­swa­gen as the “Fire Depart­ment” that includ­ed engi­neers, lawyers and oth­er spe­cial­ists who were called into action to put out prod­uct fires.

    “The memo makes the first known ref­er­ence to a defeat device in the inves­ti­ga­tion into Volkswagen’s emis­sions-cheat­ing scan­dal and might sug­gest that the company’s top exec­u­tives knew more than they are say­ing now. It isn’t known whether Mr. Win­terko­rn saw the memo.”
    2014 is appar­ent­ly when VW’s man­age­ment found out about what was then an eight year old open secret. At least that’s the state of the inves­ti­ga­tion at this point and that’s prob­a­bly about as far as the inves­ti­ga­tion is going to get unless some more whis­tle-blow­ers emerge. So it’s look­ing like we might see VW resolve this scan­dal by plac­ing vir­tu­al­ly all of the blame on low­er-lev­el employ­ees, pay­ing some big fines, and maybe open­ing an elec­tri­cal car plant in the US. Of course, one com­pli­ca­tion with accept­ing the EPA’s pro­pos­al to open a plant is that oth­er coun­tries might say, “hey, we want a plant here too!” For instance, might South Korea want a VW auto plant? If so, they’re in a good posi­tion to request one:

    Reuters
    South Kore­an pros­e­cu­tors raid Volk­swa­gen office in emis­sions probe

    Feb­ru­ary 18, 2016 10:52 PM

    SEOUL (Reuters) — South Kore­an pros­e­cu­tors on Fri­day searched the local office of Volk­swa­gen AG (VOWG_p.DE) and sis­ter firm Audi AG (NSUG.DE) as part of a probe into an emis­sions case, a spokesman for the Ger­man car­mak­ers’ local unit said, con­firm­ing media reports.

    Volk­swa­gen and Audi face a flur­ry of legal com­plaints glob­al­ly after Volk­swa­gen admit­ted in Sep­tem­ber to fal­si­fy­ing U.S. emis­sions tests on some of its diesel cars.

    Yon­hap News Agency said inves­ti­ga­tors from the Seoul Supreme Pros­e­cu­tors’ Office raid­ed the office and the house of an uniden­ti­fied senior com­pa­ny offi­cial on Fri­day. They seized emails exchanged with head­quar­ters and doc­u­ments on emis­sions ver­i­fi­ca­tion and vehi­cle cer­ti­fi­ca­tion, the report said.

    ...

    The coun­try’s envi­ron­ment min­istry last month filed a crim­i­nal com­plaint against the South Kore­an unit of Volkswagen/Audi and two com­pa­ny offi­cials, say­ing that their vehi­cles do not meet per­mis­si­ble emis­sion lev­els required by law..

    Under South Kore­an envi­ron­men­tal law, a guilty con­vic­tion could result in a prison term of up to sev­en years and a fine of up to 100 mil­lion won ($81,253), the min­istry has said.

    Volk­swa­gen and Audi top the import­ed car sales rank­ings in South Korea, the sec­ond-biggest Asian mar­ket for diesel cars after India.

    “Volk­swa­gen and Audi top the import­ed car sales rank­ings in South Korea, the sec­ond-biggest Asian mar­ket for diesel cars after India.”
    It sounds like South Korea could use a shiny new VW plant.

    Posted by Pterrafractyl | February 22, 2016, 7:19 pm
  3. LOL!:

    Reuters

    Ger­man econ­o­my min­istry says trusts VW to clear up emis­sions scan­dal

    Mon Mar 7, 2016 6:34am EST

    BERLIN

    Ger­many’s Econ­o­my Min­istry is count­ing on an inter­nal inves­ti­ga­tion at car­mak­er Volk­swa­gen to get to the bot­tom of a scan­dal over the rig­ging of emis­sions tests, a spokes­woman for the min­istry said.

    “We trust that the com­pa­ny is leav­ing no stone unturned,” Tan­ja Ale­many Sanchez de León told a gov­ern­ment news con­fer­ence on Mon­day.

    Ger­man week­ly Bild am Son­ntag had report­ed on Sun­day that the cur­rent chair­man and the chief exec­u­tive of Volk­swa­gen were alert­ed by the for­mer CEO to the use of illic­it emis­sions-con­trol soft­ware in the Unit­ed States two weeks before the car­mak­er dis­closed the scale of its manip­u­la­tions.

    “Ger­many’s Econ­o­my Min­istry is count­ing on an inter­nal inves­ti­ga­tion at car­mak­er Volk­swa­gen to get to the bot­tom of a scan­dal over the rig­ging of emis­sions tests, a spokes­woman for the min­istry said.”
    Yep. At this point, the best shot at get­ting any sort of answer to the VW diesel mys­tery is for a group of med­dling mys­tery-solv­ing kids to show up. *fin­gers crossed!*

    Posted by Pterrafractyl | March 7, 2016, 8:43 am
  4. The chief pros­e­cu­tor in Ger­many inves­ti­gat­ing VW over the diesel emis­sions fraud announced that the num­ber of sus­pects under inves­ti­ga­tion increased from 6 to 17. If course, since none of 17 are actu­al board mem­bers (cur­rent or for­mer), it’s prob­a­bly more accu­rate to say that 11 more low­er-lev­el employ­ees just got thrown under the VW Bus:

    Inter­na­tion­al Busi­ness Times

    Volk­swa­gen Emis­sions Scan­dal: More Employ­ees Tar­get­ed In Probe; CEO Warns Of ‘Sub­stan­tial And Painful’ Finan­cial Dam­age

    By Suman Varan­dani On 03/08/16 AT 6:46 AM

    The num­ber of sus­pects under inves­ti­ga­tion over the mas­sive Volk­swa­gen emis­sions scan­dal has increased from six to 17, Ger­man pros­e­cu­tors said Tues­day. The news comes as Volk­swa­gen CEO Matthias Mueller told employ­ees gath­ered at the Wolfs­burg head­quar­ters that the emis­sions-cheat­ing scan­dal will inflict “sub­stan­tial and painful” finan­cial dam­age on the car­mak­er.

    Chief pros­e­cu­tor Klaus Ziehe told Agence France-Presse that “no for­mer or cur­rent board mem­bers” were among the 17 employ­ees under inves­ti­ga­tion. The automak­er had admit­ted in Sep­tem­ber last year that it rigged emis­sion tests by equip­ping diesel vehi­cles with “defeat device.” About 11 mil­lion cars have been glob­al­ly affect­ed by the emis­sions scan­dal, of which 8.5 mil­lion cars are in Europe.

    Pros­e­cu­tors in Braun­schweig are inves­ti­gat­ing the sus­pects as the automak­er is based in Wolfs­burg, in the region­al state of Low­er Sax­ony, which falls under Braunschweig’s juris­dic­tion, accord­ing to reports.

    Mueller said Tues­day that the emis­sions-cheat­ing scan­dal will keep Volk­swa­gen busy “for a long time,” adding that the Ger­man car­mak­er has made no attempts to con­ceal its wrong­do­ings.

    ...

    Mean­while, as the probe into the Volk­swa­gen scan­dal widens, the automaker’s sec­ond-largest share­hold­er said that more “unpleas­ant news” might emerge.

    “We will this year prob­a­bly every now and then be con­front­ed with unpleas­ant news relat­ed to diesel­gate,” Stephan Weil, prime min­is­ter of Low­er Sax­ony, which holds 20 per­cent of Volkswagen’s com­mon shares, said Tues­day, accord­ing to Reuters. “The dam­age will, on bal­ance, not be minor, as much as that can already be said today but Volk­swa­gen luck­i­ly has a strong eco­nom­ic sub­stance,” Weil told the gath­er­ing at the head­quar­ters that was attend­ed by thou­sands of work­ers.

    He also report­ed­ly said that Low­er Sax­ony has “no rea­son” to alter its com­mit­ment to Volk­swa­gen.

    “Mean­while, as the probe into the Volk­swa­gen scan­dal widens, the automaker’s sec­ond-largest share­hold­er said that more “unpleas­ant news” might emerge.
    That’s def­i­nite­ly “unpleas­ant news” for VW’s employ­ees. It’s going to be a bumpy ride.

    Posted by Pterrafractyl | March 8, 2016, 11:35 am
  5. The head of VW North Amer­i­ca resigned last week. It was guar­an­teed to be at least some­what omi­nous giv­en the over­all con­text of the VW cri­sis and ongo­ing inves­ti­ga­tion. But it was a lit­tle more omi­nous than nec­es­sary by the fact that it was imme­di­ate no rea­son was giv­en for his depar­ture:

    The Guardian

    Michael Horn, VW’s US pres­i­dent, resigns ‘effec­tive imme­di­ate­ly’

    Volk­swa­gen did not explain why Horn was leav­ing the com­pa­ny now, six months after com­pa­ny was caught using soft­ware to cheat on reg­u­la­tors’ tests

    Rupert Neate in New York

    Wednes­day 9 March 2016 18.11 EST

    The head of Volk­swa­gen in the US resigned “effec­tive imme­di­ate­ly” on Wednes­day night as the com­pa­ny strug­gles to agree on a set­tle­ment with the US gov­ern­ment over its emis­sions cheat­ing scan­dal.

    Michael Horn, who had served as VW’s US pres­i­dent and chief exec­u­tive since 2014, was not quot­ed in the company’s three-para­graph state­ment announc­ing his imme­di­ate exit from the firm after more than 25 years of ser­vice.

    VW said Horn’s res­ig­na­tion was by “mutu­al agree­ment” and he would be “leav­ing to pur­sue oth­er oppor­tu­ni­ties effec­tive imme­di­ate­ly”.

    The com­pa­ny did not explain why Horn was leav­ing the com­pa­ny now – six months after VW was caught using “default device” soft­ware to sys­tem­at­i­cal­ly cheat on US reg­u­la­tors’ tests.

    Mar­tin Win­terko­rn, the glob­al CEO of VW, resigned in Sep­tem­ber 2015 in the near-imme­di­ate after­math of the scan­dal, which has wiped bil­lions of euros of VW’s mar­ket val­ue and left the com­pa­ny fac­ing fines of as much as $20bn and a crim­i­nal inves­ti­ga­tion by the US Depart­ment of Jus­tice.

    It was revealed last week that Win­terko­rn was told about the ille­gal emis­sions cri­sis more than a year before the com­pa­ny admit­ted it to reg­u­la­tors.

    Horn has at times appeared frus­trat­ed with the Ger­man company’s han­dling of the cri­sis. When he was called before the US Con­gress in Octo­ber, he denied any pri­or knowl­edge of the soft­ware, and said its instal­la­tion was not a cor­po­rate deci­sion. “I agree it’s very hard to believe,” he told law­mak­ers. “Per­son­al­ly, I strug­gle too.”

    ...

    “The com­pa­ny did not explain why Horn was leav­ing the com­pa­ny now – six months after VW was caught using “default device” soft­ware to sys­tem­at­i­cal­ly cheat on US reg­u­la­tors’ tests.”
    Hmm...what could it be? Might the sud­den unex­plained res­ig­na­tion have some­thing to do what the new whistle­blow­er law­suit from an employ­ee in Michi­gan alleg­ing the destruc­tion of doc­u­ments? It seems pos­si­ble:

    Asso­ci­at­ed Press
    Ex-Work­er Says VW Destroyed Doc­u­ments, Obstruct­ed Jus­tice

    By tom krish­er, ap auto writer

    DETROIT — Mar 14, 2016, 3:51 PM ET

    Volk­swa­gen delet­ed doc­u­ments and obstruct­ed jus­tice after the U.S. Envi­ron­men­tal Pro­tec­tion accused the com­pa­ny of cheat­ing on emis­sions tests, a for­mer employ­ee alleged in a law­suit.

    Daniel Dono­van says in a whistle­blow­er case that he was wrong­ful­ly fired Dec. 6, 2015 after refus­ing to par­tic­i­pate in the dele­tions and report­ing them to a super­vi­sor. The law­suit says that the evi­dence dele­tion con­tin­ued for three days after the Sept. 18 alle­ga­tions from the EPA and despite a hold order from the Jus­tice Depart­ment.

    VW has admit­ted that it pro­grammed about 600,000 diesel-pow­ered cars in the U.S. to turn on pol­lu­tion con­trols dur­ing EPA tread­mill tests and turn them off when the cars were on the road. The agency alleges that the cars emit as much as 40 times the allow­able amount of nitro­gen oxide, which can cause res­pi­ra­to­ry prob­lems.

    The Jus­tice Depart­ment is inves­ti­gat­ing poten­tial crim­i­nal charges against VW, and the com­pa­ny has been nego­ti­at­ing with the EPA and Cal­i­for­nia reg­u­la­tors to come up with repairs. VW faces a March 24 dead­line from a fed­er­al judge to reach agree­ment on the fix­es.

    Dono­van worked as a tech­nol­o­gy employ­ee with VW’s gen­er­al coun­sel office who was respon­si­ble for elec­tron­ic infor­ma­tion man­age­ment in injury and prod­uct lia­bil­i­ty cas­es. The law­suit said he was fired “because of his refusal to par­tic­i­pate in a course of action that would spoilate evi­dence and obstruct jus­tice” in the EPA and Jus­tice Depart­ment probes.

    But VW said Mon­day that Dono­van’s depar­ture from the com­pa­ny was not relat­ed to the diesel emis­sions issue. “We believe his claim of wrong­ful ter­mi­na­tion is with­out mer­it,” the com­pa­ny said Mon­day in a state­ment.

    Dono­van, who worked in VW’s Michi­gan offices, alleges that the com­pa­ny’s infor­ma­tion tech­nol­o­gy depart­ment did not stop delet­ing items until Sept. 21, so Dono­van report­ed his con­cerns to his super­vi­sor, accord­ing to the March 8 law­suit filed with the Oak­land Coun­ty Cir­cuit Court in Pon­ti­ac, Michi­gan. It also says the depart­ment was not pre­serv­ing back­up disks.

    Dono­van was fired because VW of Amer­i­ca believed he was about to report the dele­tions and obstruc­tion of jus­tice to the EPA, Jus­tice Depart­ment or the FBI, accord­ing to the com­plaint. It was unclear whether Dono­van, of sub­ur­ban Detroit, spoke with fed­er­al inves­ti­ga­tors. His attor­ney, Sam Mor­gan, would not com­ment and said his client did­n’t want to speak about it either. A mes­sage was left for the U.S. Attor­ney’s Office in Detroit.

    The law­suit alleges that the com­pa­ny vio­lat­ed the Michi­gan Whistle­blow­ers’ pro­tec­tion act.

    Obstruc­tion of jus­tice by destroy­ing evi­dence can have seri­ous con­se­quences for com­pa­nies, but also can be dif­fi­cult to pros­e­cute. In 2002, account­ing firm Arthur Ander­sen was found guilty of shred­ding doc­u­ments involv­ing its audit­ing of defunct ener­gy firm Enron Corp. in order to thwart a fed­er­al account­ing probe. The firm, which with­ered after the Enron case, was placed on five years of pro­ba­tion and fined $500,000. But its con­vic­tion was over­turned by the Supreme Court in 2005, which ruled the judge’s instruc­tions to the jury were too vague for jurors to deter­mine cor­rect­ly whether Ander­sen obstruct­ed jus­tice.

    ...

    The scan­dal already has cost Volk­swa­gen’s CEO his job, and last week, VW oust­ed its top U.S. exec­u­tive.

    “Dono­van worked as a tech­nol­o­gy employ­ee with VW’s gen­er­al coun­sel office who was respon­si­ble for elec­tron­ic infor­ma­tion man­age­ment in injury and prod­uct lia­bil­i­ty cas­es. The law­suit said he was fired “because of his refusal to par­tic­i­pate in a course of action that would spoilate evi­dence and obstruct jus­tice” in the EPA and Jus­tice Depart­ment probes.”
    Keep in mind that VW declared amnesty for any employ­ees that came for­ward with infor­ma­tion on the emis­sions scan­dal. So it would appear that the amnesty only applies to the actu­al emis­sions scan­dal. Not the cov­er up of the scan­dal. Good to know.

    Posted by Pterrafractyl | March 14, 2016, 12:55 pm
  6. It looks like VW and the US gov­ern­ment are arriv­ing at a fix for US own­ers caught in the diesel­gate scan­dal. It’s prob­a­bly not the fix VW was hop­ing for, but since it remains very unclear how the com­pa­ny might of fix the affect­ed vehi­cles, and we’re hit­ting a dead­line for com­ing up with an agree­ment, this fix might be the only solu­tion left: VW is going to offer to buy back the vehi­cles:

    Reuters

    Exclu­sive: VW to offer to buy back near­ly 500,000 U.S. diesel cars — sources

    WASHINGTON | By David Shep­ard­son
    Wed Apr 20, 2016 6:37pm EDT

    Volk­swa­gen AG (VOWG_p.DE) and U.S. offi­cials have reached a frame­work deal under which the automak­er would offer to buy back almost 500,000 diesel cars that used sophis­ti­cat­ed soft­ware to evade U.S. emis­sion rules, two peo­ple briefed on the mat­ter said on Wednes­day.

    The Ger­man automak­er is expect­ed to tell a fed­er­al judge in San Fran­cis­co Thurs­day that it has agreed to offer to buy back up to 500,000 2.0‑liter diesel vehi­cles sold in the Unit­ed States that exceed­ed legal­ly allow­able emis­sion lev­els, the peo­ple said.

    That would include ver­sions of the Jet­ta sedan, the Golf com­pact and the Audi A3 sold since 2009. The buy­back offer does not apply to the big­ger, 80,000 3.0‑liter diesel vehi­cles also found to have exceed­ed U.S. pol­lu­tion lim­its, includ­ing Audi and Porsche SUV mod­els, the peo­ple said.

    ...

    As part of the set­tle­ment with U.S. author­i­ties includ­ing the Envi­ron­men­tal Pro­tec­tion Agency, Volk­swa­gen has also agreed to a com­pen­sa­tion fund for own­ers, a third per­son briefed on the terms said.

    The com­pen­sa­tion fund is expect­ed to rep­re­sent more than $1 bil­lion on top of the cost of buy­ing back the vehi­cles, but it is not clear how much each own­er might receive, the per­son said.

    Volk­swa­gen may also offer to repair pol­lut­ing diesel vehi­cles if U.S. reg­u­la­tors approve the pro­posed fix, the sources said..

    A VW spokes­woman, the EPA and the Jus­tice Depart­ment declined to com­ment Wednes­day.

    VW will pay cash com­pen­sa­tion to own­ers who either sell their vehi­cles back or get them fixed, one of the peo­ple briefed on the mat­ter said. Own­ers sell­ing back their vehi­cles will get an addi­tion­al cash pay­ment on top of receiv­ing the esti­mat­ed val­ue of the vehi­cles from before the emis­sions scan­dal became pub­lic in Sep­tem­ber 2015.

    Own­ers are expect­ed to have around two years to decide whether to sell back vehi­cles or get them repaired. It is not clear whether VW will be allowed to resell vehi­cles they buy back, the source said.

    The frame­work deal with U.S. offi­cials was reached after lengthy talks in recent days at the Wash­ing­ton law office of Robert Mueller. The for­mer FBI direc­tor is the court appoint­ed medi­a­tor named to help set­tle more than 500 civ­il suits filed against VW. The talks, which con­tin­ued over the week, includ­ed all the gov­ern­ment agen­cies and lead plain­tiffs attor­neys suing GM.

    Some ele­ments of the set­tle­ment are still being worked out and details are not expect­ed to be announced Thurs­day at a court hear­ing, the peo­ple briefed on the mat­ter said. The final deal could still change before it is offi­cial­ly announced, they said.

    U.S. Dis­trict Judge Charles Brey­er in March gave VW until Thurs­day “to announce a con­crete pro­pos­al for get­ting the pol­lut­ing vehi­cles off the road.”

    Brey­er said in March the “pro­pos­al may include a vehi­cle buy-back plan or a fix approved by the rel­e­vant reg­u­la­tors that allows the cars to remain on the road with cer­tain mod­i­fi­ca­tions.”

    A final set­tle­ment is also expect­ed to include an envi­ron­men­tal reme­di­a­tion fund to address excess pol­lu­tion emit­ted by the U.S. vehi­cles since 2009.

    It is not clear if the deal will resolve the U.S. Jus­tice Depart­men­t’s civ­il suit filed in Jan­u­ary against VW or if VW will agree to pay a civ­il penal­ty. VW also faces ongo­ing crim­i­nal inves­ti­ga­tions by the Jus­tice Depart­ment and oth­er pros­e­cu­tors around the world.

    Sep­a­rate­ly, Ger­many’s Die Welt news­pa­per report­ed Wednes­day that the deal to set­tle the case would involve it pay­ing each affect­ed cus­tomer $5,000. But a per­son briefed on the mat­ter told Reuters that no deci­sions on how indi­vid­ual com­pen­sa­tion will be award­ed have been made.

    ...

    “Own­ers are expect­ed to have around two years to decide whether to sell back vehi­cles or get them repaired. It is not clear whether VW will be allowed to resell vehi­cles they buy back, the source said.
    Uh, let’s hope VW has to actu­al­ly fix the vehi­cles if it’s going to resell them. Sure, if they can’t come up with a tech­ni­cal fix it’s pos­si­ble that VW will just dump the used vehi­cles on the Euro­pean mar­ket were emis­sion stan­dards are much weak­er. It’s an option that would­n’t be great for Europe’s air qual­i­ty, but just throw­ing those cars away is also a pret­ty mas­sive waste. New­er vehi­cles using mod­ern eco-friend­ly tech­nolo­gies might have reduced emis­sions over their life­times, but there’s still quite a few emis­sions that comes from build­ing them in the first place. And that’s part of why it’s going to be worth keep­ing in mind that it’s pos­si­ble we could end up with a sce­nario where a tech­ni­cal fix that actu­al­ly reduces the pol­lu­tion from these vehi­cles is pos­si­ble, but VW deems the fix to be too expen­sive for it to be worth it for them to prof­itably imple­ment the fix. And yet, under that sce­nario where it’s finan­cial­ly too expen­sive to fix, it still might be worth it to human­i­ty in gen­er­al to have those cars fixed from an envi­ron­men­tal stand­point because oth­er­wise the resources that went into build­ing all those those cars (500,000 in the US and poten­tial­ly many more else­where) just gets wast­ed and new resources need to be invest­ed into mak­ing replace­ment vehi­cles. VW does­n’t pay that broad­er envi­ron­men­tal cost. We all do.

    It’s all a reminder that, with the fate of all those taint­ed vehi­cles still an open ques­tion, we should prob­a­bly be on the look­out for sit­u­a­tions where the paths for­ward that make the most sense for a large com­pa­ny’s bot­tom line may not make sense for soci­ety. It’s the kind of sit­u­a­tion we should be famil­iar with at this point.

    Posted by Pterrafractyl | April 20, 2016, 5:30 pm
  7. Here’s a big ‘uh oh’ for VW’s exec­u­tives, and pos­si­bly for a whole lot of oth­er auto­mo­tive indus­try execs: Inves­ti­ga­tors found a VW Pow­er­Point pre­sen­ta­tion that, amaz­ing­ly, has­n’t been delet­ed in the last decade that’s basi­cal­ly a smok­ing gun. But if bad news for VW seems like it should be good news for the rest of the auto­mo­tive indus­try, that sort of depends on whether or not VW has a good legal strat­e­gy. Because, as the arti­cle below also points out, the game plan for min­i­miz­ing the mas­sive puni­tive dam­ages VW is fac­ing from US reg­u­la­tors is to max­i­mize the num­ber of oth­er cul­prits by argu­ing that the entire indus­try is doing the same thing:

    The New York Times

    VW Pre­sen­ta­tion in ’06 Showed How to Foil Emis­sions Tests

    By JACK EWING

    APRIL 26, 2016

    FRANKFURT — A Pow­er­Point pre­sen­ta­tion was pre­pared by a top tech­nol­o­gy exec­u­tive at Volk­swa­gen in 2006, lay­ing out in detail how the automak­er could cheat on emis­sions tests in the Unit­ed States.

    The pre­sen­ta­tion has been dis­cov­ered as part of the con­tin­u­ing inves­ti­ga­tions into Volk­swa­gen, accord­ing to two peo­ple who have seen the doc­u­ment and who spoke on the con­di­tion of anonymi­ty because of the legal action against the com­pa­ny. It pro­vides the most direct link yet to the gen­e­sis of the decep­tion at Volk­swa­gen, which admit­ted late last year that 11 mil­lion vehi­cles world­wide were equipped with soft­ware to cheat on tests that mea­sured pol­lu­tion in emis­sions.

    It is not known how wide­ly the pre­sen­ta­tion was dis­trib­uted at Volk­swa­gen. But its exis­tence, and the pro­pos­al it made to install the soft­ware, high­light a series of flawed deci­sions at the embat­tled car­mak­er sur­round­ing the emis­sions prob­lem.

    Those deci­sions exposed the com­pa­ny to bil­lions of dol­lars in fines as well as crim­i­nal inves­ti­ga­tions. Last Fri­day, Volk­swa­gen report­ed a record $6.2 bil­lion loss, after set­ting aside $18 bil­lion to cov­er the costs of fines, legal claims and recalls. As a first step in a broad­er set­tle­ment under nego­ti­a­tion, Volk­swa­gen agreed to fix or buy back 500,000 diesel vehi­cles in the Unit­ed States, begin­ning with mod­el year 2009.

    At var­i­ous junc­tures over the last decade, exec­u­tives at Volk­swa­gen ignored or under­played warn­ing signs.

    As the Pow­er­Point under­scored, peo­ple inside Volk­swa­gen were aware that its diesel engines were pol­lut­ing sig­nif­i­cant­ly more than allowed. Yet com­pa­ny exec­u­tives repeat­ed­ly reject­ed pro­pos­als to improve the emis­sions equip­ment, accord­ing to two Volk­swa­gen employ­ees present at meet­ings where the pro­pos­als were dis­cussed.

    Even when reg­u­la­tors start­ed ask­ing ques­tions in 2014, Volk­swa­gen con­tin­ued to install the cheat­ing soft­ware for more than a year. And the com­pa­ny fur­ther com­pound­ed its prob­lems by under­es­ti­mat­ing the poten­tial penal­ties and the risks to its rep­u­ta­tion, accord­ing to court doc­u­ments obtained by The New York Times.

    Volk­swa­gen declined to com­ment, cit­ing the con­tin­u­ing inves­ti­ga­tion. The com­pa­ny has said that top man­age­ment was not aware of the cheat­ing soft­ware, known as a defeat device. Ans­gar Rempp, a part­ner at Jones Day, the law firm head­ing Volkswagen’s inter­nal inquiry, also declined to com­ment.

    What is now clear is that the cur­rent cri­sis at Volk­swa­gen traces back to the Pow­er­Point pre­sen­ta­tion a decade ago.

    Volk­swa­gen engi­neers at the company’s research and devel­op­ment com­plex in Wolfs­burg real­ized that the emis­sions equip­ment in their newest diesel engine would wear out too quick­ly if it were cal­i­brat­ed to meet Amer­i­can pol­lu­tion stan­dards. The emis­sions rules in the Unit­ed States are more strin­gent than those in Europe.

    A tech­nol­o­gy expert at Volk­swa­gen offered a solu­tion in the Pow­er­Point pre­sen­ta­tion. Just a few pages long, the 2006 pre­sen­ta­tion includ­ed a graph that explained the process for test­ing the amount of pol­lu­tion spew­ing from a car. In a lab­o­ra­to­ry, reg­u­la­tors would try to repli­cate a vari­ety of con­di­tions on the road.

    The pat­tern of those tests, the pre­sen­ta­tion said, was entire­ly pre­dictable. And a piece of code embed­ded in the soft­ware that con­trolled the engine could rec­og­nize that pat­tern, acti­vat­ing equip­ment to reduce emis­sions just for test­ing pur­pos­es.

    Ele­ments of the pre­sen­ta­tion were report­ed ear­li­er by Süd­deutsche Zeitung news­pa­per and sev­er­al Ger­man broad­cast­ers. Under Ger­man pri­va­cy law, the exec­u­tive can­not be named.

    The soft­ware evolved over the years. It was lat­er upgrad­ed to detect oth­er tell­tale signs of a reg­u­la­to­ry test, like a steer­ing wheel that was not mov­ing, accord­ing to Felix Domke, a com­put­er expert and self-described hack­er who has ana­lyzed the soft­ware.

    Dur­ing reg­u­la­tors’ tests, the engine soft­ware would turn up the pol­lu­tion con­trols. When it was on the road, equip­ment designed to neu­tral­ize harm­ful nitro­gen oxides would turned down, result­ing in emis­sions that were up to 40 times the legal lim­it.

    Volk­swa­gen had a grow­ing aware­ness of that emis­sions dis­crep­an­cy in recent years.

    In a court fil­ing, the com­pa­ny lawyers, as part of a defense in a share­hold­er law­suit, sug­gest that the dis­crep­an­cy was com­mon knowl­edge with­in the indus­try. “The vehi­cles of all man­u­fac­tur­ers exceed var­i­ous emis­sions lim­its in nor­mal street use,” Volk­swa­gen lawyers said in a court fil­ing, which was obtained by The Times. They fur­ther argued that the dif­fer­ences between road emis­sions and lab emis­sions were tol­er­at­ed by reg­u­la­tors.

    The man­age­ment board led by Mar­tin Win­terko­rn, the chief exec­u­tive who resigned in Sep­tem­ber after the admis­sion of cheat­ing, repeat­ed­ly rebuffed low­er-rank­ing employ­ees who sub­mit­ted tech­ni­cal pro­pos­als for upgrad­ing the emis­sions con­trols, accord­ing to the two peo­ple who attend­ed meet­ings where the pro­pos­als were dis­cussed. The man­age­ment board reject­ed the pro­pos­als because of cost, the peo­ple said.

    Lawyers for Mr. Win­terko­rn did not respond to requests for com­ment.

    ...

    Court doc­u­ments filed in Ger­many by lawyers for Volk­swa­gen show how the com­pa­ny vast­ly under­es­ti­mat­ed the poten­tial penal­ties.

    After Amer­i­can offi­cials began ask­ing ques­tions about Volk­swa­gen emis­sions, com­pa­ny exec­u­tives, includ­ing Mr. Win­terko­rn, thought they could deal with the prob­lem qui­et­ly at a rel­a­tive­ly low cost, accord­ing to the court doc­u­ments that were obtained by The Times.

    An Amer­i­can law firm hired by Volk­swa­gen to exam­ine reg­u­la­to­ry issues, Kirk­land & Ellis, told the car­mak­er in an August 2015 memo that the pre­vi­ous record penal­ty was $100 mil­lion. The fine was imposed on Hyundai-Kia in 2014 for vio­lat­ing the lim­its on green­house gas emis­sions involv­ing 1.1 mil­lion vehi­cles, or near­ly twice as many cars as in Volkswagen’s case.

    At that lev­el, the penal­ties could have eas­i­ly been absorbed by Volk­swa­gen, which had sales of 213 bil­lion euros last year, or around $240 bil­lion. But the poten­tial fine for Volk­swa­gen is like­ly to dwarf the pre­vi­ous record, based on what the com­pa­ny has already set aside.

    Court doc­u­ments filed by Volk­swa­gen indi­cate that the tech­ni­cians thought the chances of being caught cheat­ing were slim when the decep­tion began in 2006. While tech­nol­o­gy to test cars under road con­di­tions was avail­able, it was not wide­ly used by reg­u­la­tors.

    “The seem­ing­ly small dan­ger of dis­cov­ery may have been a fac­tor in tempt­ing the VW engi­neers to make the imper­mis­si­ble soft­ware alter­ation,” Volk­swa­gen lawyers said in the court doc­u­ments.

    In recent years, the chances of dis­cov­ery increased. It became eas­i­er to buy emis­sions test­ing equip­ment from sup­pli­ers, and numer­ous envi­ron­men­tal groups or inde­pen­dent lab­o­ra­to­ries did so to show that many car­mak­ers were under­stat­ing diesel emis­sions.

    Signs of irreg­u­lar­i­ties in Volk­swa­gen cars were dis­cov­ered in 2014 by a non­prof­it group, the Inter­na­tion­al Coun­cil on Clean Trans­porta­tion, based on test­ing per­formed at West Vir­ginia Uni­ver­si­ty. Still, Volk­swa­gen con­tin­ued to install defeat devices in its cars, includ­ing some Audi and Porsche mod­els, until last year.

    Volk­swa­gen also under­played the poten­tial threat of the diesel prob­lems, as well as the wrath of Amer­i­can reg­u­la­tors. Mr. Win­terko­rn and oth­er top man­agers were used to def­er­en­tial treat­ment by gov­ern­ment offi­cials in Ger­many, where it is one of the largest employ­ers.

    After the Amer­i­can reg­u­la­tors start­ed look­ing into the emis­sions issue in 2014, the com­pa­ny didn’t give the prob­lem much weight.

    Mr. Win­terko­rn received a two-page memo in Novem­ber 2014 that sum­ma­rized the tech­ni­cal prob­lems with Volk­swa­gen vehi­cles in var­i­ous loca­tions. Plans to recall about 500,000 diesel vehi­cles in the Unit­ed States because of the emis­sions issue were grant­ed a sin­gle terse para­graph at the bot­tom of the sec­ond page, accord­ing to the memo, which was obtained by The Times.

    The emis­sions prob­lem was not cor­rect­ed with the recall. And despite the reg­u­la­tors’ grow­ing impa­tience, Volk­swa­gen did not appear alarmed by the pos­si­ble con­se­quences.

    Dur­ing a meet­ing in July 2015 of high-rank­ing Volk­swa­gen man­agers to dis­cuss reg­u­la­to­ry issues around the world, diesel engines in the Unit­ed States was one item out of six on the agen­da. It was allo­cat­ed 10 min­utes, in a meet­ing that was set to last 1 hour and 45 min­utes, accord­ing to a copy of the agen­da obtained by The Times.

    On Sept. 3, 2015, Volk­swa­gen final­ly admit­ted to Amer­i­can reg­u­la­tors that diesel vehi­cles had a defeat device. Still, exec­u­tives were shocked at the response.

    Stu­art John­son, a Volk­swa­gen exec­u­tive respon­si­ble for rela­tions with Amer­i­can reg­u­la­tors, said in a memo in Jan­u­ary that the Envi­ron­men­tal Pro­tec­tion Agency gave him half an hour’s notice before announc­ing on Sept. 18 that the car­mak­er had admit­ted installing defeat devices in diesels.

    Although more than a year had passed since the E.P.A. first raised sus­pi­cions about Volk­swa­gen diesels, Mr. John­son said in a Jan. 19 inter­nal memo, which was obtained by The Times, that he believed that Volk­swa­gen still had four months “where we could dis­cuss the issue pri­vate­ly.”

    “I was very dis­ap­point­ed by this turn of events,” Mr. John­son wrote. He did not reply to a request for com­ment. A spokes­woman for Volk­swa­gen in the Unit­ed States declined to com­ment.

    In a court fil­ing, the com­pa­ny lawyers, as part of a defense in a share­hold­er law­suit, sug­gest that the dis­crep­an­cy was com­mon knowl­edge with­in the indus­try. “The vehi­cles of all man­u­fac­tur­ers exceed var­i­ous emis­sions lim­its in nor­mal street use,” Volk­swa­gen lawyers said in a court fil­ing, which was obtained by The Times. They fur­ther argued that the dif­fer­ences between road emis­sions and lab emis­sions were tol­er­at­ed by reg­u­la­tors.”
    Now, keep in mind that VW’s clean diesel vehi­cles were emit­ting up to 40 times the NOx legal lim­its, so unless the oth­er com­peti­tors in the diesel car mar­kets are engaged in sim­i­lar schemes, VW’s con­spir­a­cy scheme is prob­a­bly the worst offend­er we’re going to find in today’s pas­sen­ger vehi­cle “clean” diesel mar­ket. But also note the lan­guage VW’s lawyers are using in their defen­sive alle­ga­tions which is that “all” man­u­fac­tur­ers exceed “var­i­ous emis­sions lim­its in nor­mal street use”, and that means VW is try­ing to make their defense about diesel and gas emis­sions. Not all man­u­fac­tur­ers are com­pet­ing in the diesel vehi­cle mar­ket but every­one but Tes­la is in the gas vehi­cle mar­ket. So when VW charges that every­one else is cheat­ing too (and VW is prob­a­bly cor­rect on that account...espe­cial­ly when it comes to the diesel mar­ket), it’s doing every­one a favor. Every­one but the exec­u­tives at the major auto­mo­tive com­pa­nies, although the non-nihilist execs will also be get­ting a net favor.

    So if VW is basi­cal­ly mak­ing “every is doing it” a key part of its defense strat­e­gy, it begs the ques­tion: How much is it worth to the pub­lic good, in terms of VW pay­ing a com­pen­sa­tion for all that hid­den pol­lu­tion, to drag the rest of the glob­al auto­mo­tive indus­try into this? Prob­a­bly a lot more than the tens of bil­lions of dol­lars VW faces right now. If the VW scan­dal can morph into a auto indus­try scan­dal that cov­ers the full spec­trum of hid­ing the envi­ron­men­tal cost of cars and oth­er vehi­cles, isn’t that kind of price­less? And since it’s almost cer­tain that some sort of “deal” is going to be made at some point that sig­nif­i­cant­ly reduces the penal­ties, hope­ful­ly reg­u­la­tors are con­sid­er­ing a deal that involves rat­ting out the rest of the indus­try. Like smok­ing Pow­er­Points and evi­dence like that. It’s win, win! VW’s wins at its mega-scan­dal gets sub­sumed by a mega-er-scan­dal and every­one else wins if the world cuts down on wast­ing pre­cious resources on invest­ments into out­dat­ed infra­struc­ture like a fos­sil-fuel econ­o­my.

    The oppor­tu­ni­ty costs of not shift­ing to a green econ­o­my are grow­ing by the day and that why it’s impor­tant to remem­ber that the avoid­able pol­lu­tion of today’s fos­sil-fuel infra­struc­ture a “waste” both in terms of being a harm­ful waste prod­uct and an incred­i­bly impor­tant wast­ed oppor­tu­ni­ty. We could have had a green econ­o­my years ago if we actu­al­ly tried. Why not do it now? There’s real­ly no excuse. So let’s use VW’s “every­one is doing it” defense as an excuse to actu­al­ly do it. Smok­ing Pow­er­Points get bonus points and non-nihilist exec­u­tives at any com­pa­ny are wel­come to con­tribute. And yes, the pre­vi­ous­ly float­ed idea that VW should be required to help invest in the green trans­porta­tion infra­struc­ture of tomor­row in the US (like recharg­ing sta­tions for solar vehi­cles) as part of the set­tle­ment should still def­i­nite­ly be part of the final set­tle­ment regard­less of how many Indus­try-wide Pow­er­Points VW helps turn up. It’s just that all the oth­er man­u­fac­tur­ers should help make the same invest­ments at the same time, every­where, so human­i­ty can stops wast­ing resources on waste­ful infra­struc­ture that’s just going to have to get replaced ASAP. There’s no excuse for not doing that any­way, with or with­out this VW scan­dal, which is why we have no excuse for wast­ing this great excuse VW hand­ed us to do that which we’ve had no excuse for not doing all along about all this waste.

    Posted by Pterrafractyl | April 30, 2016, 1:24 pm
  8. Here’s a fun look at one of the rea­sons why Volk­swa­gen is hav­ing so much dif­fi­cul­ty find­ing employ­ees who will coop­er­ate with inter­nal inves­ti­ga­tors: because if the fol­low­ing anec­dote of an unre­lat­ed past inter­nal VW inves­ti­ga­tion is an accu­rate reflec­tion of how these things go it would be fool­ish to coop­er­ate since they’re bare­ly going to try to inves­ti­gate you any­way. Plus, there’s the whole ‘code of silence’ thing:

    Forbes

    Diesel­gate: Why Volk­swa­gen’s Inter­nal Inves­ti­ga­tors Can’t Find Coop­er­a­tive Wit­ness­es

    Bertel Schmitt,
    Con­trib­u­tor

    May 23, 2016 @ 08:10 AM

    “Silence” is a small­er bud­get movie by Mar­tin Scors­ese, to be released by the end of this year, if all goes well. The movie might be pre­empt­ed by a big bud­get real­i­ty show with the Ger­man title “Das Schweigen.” It’s the dra­ma of Volkswagen’s fruit­less search for the diesel­gate truth. Half a year since the scan­dal broke, very lit­tle truth was found, or so they say. What makes it so hard?

    Soon after the scan­dal broke, Volk­swa­gen decap­i­tat­ed its com­plete engi­neer­ing lead­er­ship, from CEO Win­terko­rn, and rock­star über-engi­neer Hack­en­berg, on down. In the months there­after, scores of man­agers were let go. The naïve observ­er would assume that Volk­swa­gen found and fired the cul­prits. In real­i­ty, or at least offi­cial­ly, the sacked exec­u­tives devel­oped a sud­den desire to retire, and they were sent off with such opu­lent sev­er­ance pack­ages that seek­ing fur­ther employ­ment would be a sil­ly idea. “Most of them prob­a­bly didn’t leave for under 10 mil­lion Euro,” told me a Volk­swa­gen exec­u­tive who is famil­iar with the for­mu­las used at the Ger­man automak­er in such an instance.

    The dia­mond-stud­ded plat­inum para­chutes caused inqui­etude in the remain­ing ranks. “If you do your job well, you get noth­ing,” grum­bled a high-rank­ing VW man­ag­er. “If I want the big mon­ey, I have to screw up real big.”

    Offi­cial­ly, none of the dis­missed had any­thing to do with diesel­gate. Any­one high up who might have signed off on defeat devices has left the com­pa­ny, but sup­pos­ed­ly, he didn’t do it. Mean­while, the search to find the alleged­ly guilty among the low­er ranks con­tin­ues. Hordes of lawyers have been hired for that search, ter­abytes of data have been sift­ed through, with lit­tle suc­cess, it seems. When Matthias Müller was installed as the new CEO of Volk­swa­gen AG, he flam­boy­ant­ly promised to “leave no stone unturned.” So far, save for a few hiber­nat­ing toads, noth­ing was found under the rocks.

    One of the many rea­sons for why Volkswagen’s inter­nal inves­ti­ga­tors have struck out so far is a “code of silence” that is repeat­ed­ly quot­ed in Ger­man media. The silence is not so much geared to keep­ing things under wraps – the cheat­ing at Volk­swa­gen and else­where has been an open secret for decades. Volkswagen’s usu­al­ly gos­sipy man­agers and engi­neers only tend to clam up when ques­tioned by the gumshoes of the company’s inter­nal integri­ty inspec­torate, the “Konz­ern­re­vi­sion,” or Depart­ment K‑GR for short. Among VW per­son­nel, the pop­u­lar­i­ty of Volk­swa­gen in-house ethics detec­tives ranks sev­er­al rungs low­er than that of Inter­nal Affairs in any cheap cop flick.

    The fol­low­ing sto­ry is unre­lat­ed to any diesel­gate shenani­gans, but it illus­trates how VW’s Geheime Konz­ern­polizei works.

    A few years ago, some­one must have tak­en a dis­lik­ing to Volkswagen’s chief res­i­dent in Malaysia, one of the more, well, “inter­est­ing” spots in Volkswagen’s vast empire. Local media was tipped off that the man­ag­er might be involved in crim­i­nal activ­i­ties. That would be easy in a coun­try that ranks between Fiji and Slo­va­kia on the world­wide cor­rup­tion scale, and where you can’t make cars with­out heavy gov­ern­ment involve­ment. The reporters con­tact­ed Volk­swa­gen, where they were told that noth­ing unto­ward was known. Inter­nal­ly, the ball start­ed to roll.

    A Konz­ern­polizei inves­ti­ga­tor embarked on the long and expen­sive trip to the exot­ic coun­try. Once arrived and ensconced in quar­ters appro­pri­ate to his rank, the detec­tive didn’t look into deal­ings with orga­nized crime or the pay­off of gov­ern­ment offi­cials, he pulled the manager’s expense reports instead. He then painstak­ing­ly con­tact­ed all peo­ple the man­ag­er had claimed to have treat­ed to lunch­es and din­ners, and asked them whether it was true.

    In the busi­ness, this is a tried, true, and usu­al­ly sure­fire way to bring just about any­body down. I still remem­ber being called into a meet­ing with the own­er of an adver­tis­ing agency where I worked. He praised us all for keep­ing the client hap­py and enter­tained, to the degree that “the same client was tak­en to din­ner by four dif­fer­ent peo­ple on the same evening – he must have been hun­gry.” We got the mes­sage, and hence­forth made sure that there was no such dupli­ca­tion when we enter­tained our girl­friends.

    The dis­patched detec­tive failed even with that sim­ple task. “Out of a hun­dred peo­ple he con­tact­ed, only two or three were not total­ly sure that they were treat­ed to din­ner,” told me a per­son close to the mat­ter. By run­ning the inquiries, the detec­tive, how­ev­er, suc­ceed­ed in let­ting all deci­sion mak­ers in the exot­ic mar­ket know that our man was under inves­ti­ga­tion.

    Back home in Wolfs­burg, the gumshoe typed up a con­fi­den­tial report that was so wide­ly cir­cu­lat­ed in the com­pa­ny that even an out­sider like me could see it. The tar­get of the inqui­si­tion was not on the dis­tri­b­u­tion list. In the report, the inquisi­tor stat­ed that “per­son­al enrich­ment” on part of the tar­get “could not be con­firmed.” Omi­nous­ly, the report con­tin­ued that there would be a sep­a­rate report by Volkswagen’s Secu­ri­ty Dept. con­cern­ing “accu­sa­tions regard­ing exter­nal activ­i­ties.” Despite hav­ing found no evi­dence, the report rec­om­mend­ed to “eval­u­ate and where appro­pri­ate ini­ti­ate labor-law relat­ed steps.”

    Said my Volk­swa­gen source: “Those ‘accu­sa­tions regard­ing exter­nal activ­i­ties’ are a Volk­swa­gen euphemism for con­tacts with orga­nized crime, drug run­ning, gun run­ning, traf­fick­ing of girls, that kind of thing. ‘Labor-law relat­ed steps’ trans­late into fir­ing the guy.” Noth­ing was heard about the man­ag­er med­dling with the mafia, but his rep­u­ta­tion was suf­fi­cient­ly sul­lied. The man­ag­er left his post in the exot­ic locale, and he is still work­ing for Volk­swa­gen.

    ...

    One of the many rea­sons for why Volkswagen’s inter­nal inves­ti­ga­tors have struck out so far is a “code of silence” that is repeat­ed­ly quot­ed in Ger­man media. The silence is not so much geared to keep­ing things under wraps – the cheat­ing at Volk­swa­gen and else­where has been an open secret for decades. Volkswagen’s usu­al­ly gos­sipy man­agers and engi­neers only tend to clam up when ques­tioned by the gumshoes of the company’s inter­nal integri­ty inspec­torate, the “Konz­ern­re­vi­sion,” or Depart­ment K‑GR for short. Among VW per­son­nel, the pop­u­lar­i­ty of Volk­swa­gen in-house ethics detec­tives ranks sev­er­al rungs low­er than that of Inter­nal Affairs in any cheap cop flick.
    So even when VW’s inter­nal inves­ti­ga­tors are a bunch of Key­stone Cops, every­one there still hates them. A ‘code of silence’ isn’t super sur­pris­ing but why all the hate? Tough crowd.

    Posted by Pterrafractyl | May 23, 2016, 5:47 pm
  9. VW just rolled out its big mea cul­pa plan intend­ed to put the diesel emis­sions scan­dal behind it: make VW a lead­ing elec­tric car man­u­fac­tur­er by 2025. While the plan has some crit­ics, you have to admit that for a com­pa­ny that was caught in a mas­sive emis­sions fraud scan­dal that could make con­sumers under­stand­ably wary of what’s com­ing out of their VW’s tailpipe, tran­si­tion­ing to cars with­out a tailpipe is prob­a­bly not a bad plan:

    Ars Tech­ni­ca

    After emis­sions scan­dal, VW’s roadmap for the future is aggres­sive on elec­tric
    The automak­er is eager to push ahead after it was caught cheat­ing on pol­lu­tion tests.

    by Megan Geuss — Jun 16, 2016 12:45pm CDT

    On Thurs­day, Volk­swa­gen Group CEO Matthias Müller put forth his vision for the com­pa­ny’s future into 2025. The plan is an aggres­sive one com­ing out of almost a year of intense pub­lic scruti­ny and reg­u­la­to­ry con­cerns fol­low­ing VW Group’s involve­ment in a high-pro­file emis­sions scan­dal.

    The com­pa­ny’s new strat­e­gy, which was approved by VW Group’s board of super­vi­sors, calls for the Ger­man automak­er to deliv­er 30 new elec­tric vehi­cles across Volk­swa­gen, Audi, Porsche, and its oth­er brands by 2025. “The Volk­swa­gen Group fore­casts that its own BEV [bat­tery-pow­ered elec­tric vehi­cle] sales will be between two and three mil­lion units in 2025, equiv­a­lent to some 20 to 25 per­cent of the total unit sales expect­ed at that time,” the com­pa­ny wrote in a press release.

    ...

    Volk­swa­gen’s cor­po­rate cul­ture has been blamed in part for the diesel emis­sions scan­dal. An obses­sive desire to push diesel for­ward as a clean alter­na­tive to gaso­line, the sto­ry goes, caused engi­neers to get des­per­ate try­ing to make cars that could pass the ever-tight­en­ing emis­sions stan­dards in the US and abroad. To Ger­man inves­ti­ga­tors, Volk­swa­gen Group’s chief exec­u­tives have said that they had noth­ing to do with the ille­gal soft­ware plant­ed on the fleet of diesels that began hit­ting the mar­ket in 2008. Instead, those execs blamed the soft­ware on “rogue engi­neers.” The inves­ti­ga­tion is still ongo­ing.

    With such ambi­tious goals for elec­tric vehi­cle adop­tion, one might won­der if the same kind of cor­ner-cut­ting that alleged­ly led to the diesel scan­dal could plague Volk­swa­gen Group’s new goal. In a quote to The Wall Street Jour­nal, Müller seemed con­fi­dent that the com­pa­ny would achieve its 2025 goals, but he did­n’t address claims that the com­pa­ny’s pre­vi­ous goals were eas­i­ly met due to a secret com­pet­i­tive hand­i­cap. “The (diesel) cri­sis has par­tial­ly altered the per­spec­tive on every­thing we have achieved in the past years,” the CEO said. “The fact is that we achieved the tar­gets we set in 2007 ahead of sched­ule or were at least on the way to doing so when the diesel issue hit us.”

    Beyond com­ment­ing on the diesel issue, VW Group added that it would be invest­ing in devel­op­ing units to lead the com­pa­ny on bat­tery tech­nol­o­gy, dig­i­tal­iza­tion, and autonomous dri­ving. “The aim is to license a com­pet­i­tive self-dri­ving sys­tem (SDS) devel­oped in-house by the end of the decade,” the com­pa­ny’s press release said. Volk­swa­gen has already made a few steps toward autonomous vehi­cle test­ing, hav­ing reg­is­tered for a spe­cial per­mit with the Cal­i­for­nia DMV to test cars on its roads.

    With such ambi­tious goals for elec­tric vehi­cle adop­tion, one might won­der if the same kind of cor­ner-cut­ting that alleged­ly led to the diesel scan­dal could plague Volk­swa­gen Group’s new goal. In a quote to The Wall Street Jour­nal, Müller seemed con­fi­dent that the com­pa­ny would achieve its 2025 goals, but he did­n’t address claims that the com­pa­ny’s pre­vi­ous goals were eas­i­ly met due to a secret com­pet­i­tive hand­i­cap. “The (diesel) cri­sis has par­tial­ly altered the per­spec­tive on every­thing we have achieved in the past years,” the CEO said. “The fact is that we achieved the tar­gets we set in 2007 ahead of sched­ule or were at least on the way to doing so when the diesel issue hit us.””
    That is a pret­ty good ques­tion: so how can car man­u­fac­tur­ers prof­itably cheat in the elec­tric vehi­cle mar­ket? Because you can be pret­ty sure at least some­one has been think­ing about that.

    Fake mileage that under­states the amount of elec­tric­i­ty con­sumed is one very pos­si­ble option. But also note that cost of elec­tric­i­ty will sud­den­ly replace the price of gas or diesel in the minds of con­sumers as a key fac­tor when decid­ing whether or not to pur­chase an elec­tric vehi­cle. And that means that as the auto indus­try tran­si­tions towards elec­tric vehi­cles, those elec­tric vehi­cle man­u­fac­tur­ers are going to have an incen­tive to ensure elec­tric­i­ty prices are as cheap as pos­si­ble.

    So if, for instance, a large num­ber of elec­tric cars were being pro­duced in a devel­op­ing coun­try with a heavy reliance on coal-pow­ered elec­tric­i­ty, elec­tric car man­u­fac­tur­ers could effec­tive­ly ‘cheat’ by lob­by­ing to ensure that exist­ing coal pow­er-plants stay open for as long as pos­si­ble to keep elec­tric­i­ty prices low. Who knows if it will come to that, but con­sid­er­ing that VW’s big elec­tric vehi­cle announce­ment includes the fact that Chi­na is the elec­tric vehi­cle mar­ket they’re plan­ning on invest­ing in the most, the ten­sion between elec­tric­i­ty prices and its poten­tial to impact elec­tric vehi­cle sales is going to be worth keep­ing in mind:

    Reuters

    VW bets on elec­tric cars, ser­vices to recov­er from cri­sis

    Thu Jun 16, 2016 12:51pm EDT

    By Andreas Cre­mer

    WOLFSBURG, Ger­many (Reuters) — Volk­swa­gen VOWG_p.DE will invest bil­lions of euros in elec­tric cars, ride-hail­ing and auto­mat­ed dri­ving to become a world leader in green trans­port by 2025, it said on Thurs­day, as it reshapes its busi­ness fol­low­ing its diesel emis­sions scan­dal.

    Europe’s biggest car­mak­er said it would fund “the biggest change process in the com­pa­ny’s his­to­ry” with an effi­cien­cy dri­ve, includ­ing inte­grat­ing com­po­nents busi­ness­es that cur­rent­ly employ 67,000 peo­ple in 26 loca­tions world­wide.

    But a lack of detail in the pro­gramme, dubbed “TOGETHER – Strat­e­gy 2025”, left some ana­lysts cold, and Volk­swa­gen (VW) shares fell as much as 4.3 per­cent.

    “The announce­ments by VW look great on paper but no one can say for sure how demand for elec­tric mobil­i­ty will devel­op,” said Com­merzbank ana­lyst Sascha Gom­mel.

    “There are wor­thy ele­ments among the plans but it’s prob­a­bly also a mar­ket­ing exer­cise by VW to tell the pub­lic that they have got­ten the mes­sage” to change after its scan­dal, said Gom­mel, who has a “hold” rec­om­men­da­tion on the stock.

    ...

    Mueller reaf­firmed VW’s expan­sion and invest­ment plans for North Amer­i­ca and Chi­na, adding he expect­ed Chi­na would be the main mar­ket for its new elec­tric cars.

    He also said VW was in talks with poten­tial part­ners to bol­ster its posi­tion in Chi­na’s grow­ing econ­o­my-car mar­ket, a cur­rent weak spot for the busi­ness.

    “Mueller reaf­firmed VW’s expan­sion and invest­ment plans for North Amer­i­ca and Chi­na, adding he expect­ed Chi­na would be the main mar­ket for its new elec­tric cars.
    Ok, so Chi­na is going to be the main mar­ket for its new cars. Great! It was always insane for world not to help a nation as heav­i­ly pop­u­lat­ed as Chi­na to not indus­tri­al­ize with green, renew­able tech­nol­o­gy in the first place. So if VW can assist in that tran­si­tion to a green infra­struc­ture, good. It’s a bet­ter way to make amends for the diesel scan­dal than sim­ply pay­ing a fine.

    But, again, this is only going to be a net ‘good’ deed as long as this flood of new Chi­nese elec­tric vehi­cles does­n’t actu­al­ly end up encour­ag­ing the use of Chi­na’s noto­ri­ous­ly dirty coal-fired pow­er-plants and end up mak­ing a bad sit­u­a­tion worse. Because as the arti­cle below makes clear, while elec­tric vehi­cles are indeed a crit­i­cal part of the solu­tion for mak­ing civ­i­liza­tion sus­tain­able, they could also become part of the prob­lem if the rest of the required solu­tions, like clean elec­tric­i­ty, aren’t imple­ment­ed simul­ta­ne­ous­ly:

    Reuters

    In coal-pow­ered Chi­na, elec­tric car surge fuels fear of wors­en­ing smog

    BEIJING | By Jake Spring

    Wed Jan 27, 2016 7:09am EST

    Automak­ers’ lat­est pro­jec­tions for rapid growth of Chi­na’s green car mar­ket have added to con­cerns of wors­en­ing smog as the uptake of elec­tric vehi­cles pow­ered by coal-fired grids races ahead of a switch to clean­er ener­gy.

    Volk­swa­gen AG (VOWG_p.DE) plans 15 new-ener­gy mod­els over 3–5 years, its Chi­na chief told a green car con­fer­ence in Bei­jing on Sat­ur­day, pre­dict­ing — like the gov­ern­ment — that Chi­nese pro­duc­tion of elec­tric and plug-in hybrid vehi­cles would grow almost six times to 2 mil­lion annu­al­ly by 2020.

    At the same event, BYD Co Ltd’s (002594.SZ) (1211.HK) chair­man told media that the Chi­nese automak­er’s elec­tric vehi­cle sales would dou­ble in each of the next three years.

    The gov­ern­ment has been pro­mot­ing elec­tric vehi­cles to cut the smog that fre­quent­ly envelops Chi­nese cities, help­ing sales quadru­ple last year and mak­ing Chi­na the biggest mar­ket, the finance min­is­ter said at the con­fer­ence. Less than 1 per­cent of pas­sen­ger cars are now new ener­gy, but the pace of growth rais­es their poten­tial to wors­en smog.

    A series of stud­ies by Tsinghua Uni­ver­si­ty, whose alum­ni includes the incum­bent pres­i­dent, showed elec­tric vehi­cles charged in Chi­na pro­duce two to five times as much par­tic­u­late mat­ter and chem­i­cals that con­tribute to smog ver­sus petrol-engine cars. Hybrid vehi­cles fare lit­tle bet­ter.

    “Inter­na­tion­al expe­ri­ence shows that clean­ing up the air does­n’t need to rely on elec­tric vehi­cles,” said Los Ange­les-based An Feng, direc­tor of the Inno­va­tion Cen­ter for Ener­gy and Trans­porta­tion. “Clean up the pow­er plants.”

    Chi­na plans to con­vert the grid to renew­able fuel or clean-coal tech­nol­o­gy as part of efforts to cut car­bon emis­sions by 60 per­cent by 2020.

    That will speed the green impact of elec­tric vehi­cles, said envi­ron­men­tal sci­ence pro­fes­sor Huo Hong at the elite Tsinghua uni­ver­si­ty. But that goal will be “real­ly dif­fi­cult to achieve.”

    Tsinghua’s stud­ies call into ques­tion the wis­dom of aggres­sive­ly pro­mot­ing vehi­cles which the uni­ver­si­ty said could not be con­sid­ered envi­ron­men­tal­ly friend­ly for at least a decade in many areas of Chi­na unless grid reform accel­er­ates.

    Chi­na’s indus­try, envi­ron­ment and sci­ence min­istries, which devise most new ener­gy vehi­cle poli­cies, did not respond to requests for com­ment. BYD and Volk­swa­gen declined to imme­di­ate­ly com­ment.

    POLICY MISMATCH

    To pro­mote new-ener­gy vehi­cles, the gov­ern­ment has offered var­i­ous incen­tives in recent years includ­ing tax breaks, and set tar­gets such as hav­ing 5 mil­lion new-ener­gy vehi­cles on the road by 2020 — more than 8 times the cur­rent num­ber.

    Author­i­ties in some cities par­tic­u­lar­ly affect­ed by smog have gone fur­ther. Bei­jing and Tian­jin, for instance, have exempt­ed new-ener­gy vehi­cles from lim­its on the num­ber of new cars grant­ed license plates, and exempt­ed them from dri­ving restric­tions that oth­er cars face on cer­tain days of the week.

    This month, the indus­tri­al Hebei province decreed that all new res­i­den­tial com­plex­es must have car-charg­ing facil­i­ties.

    ...

    But Bei­jing, Tian­jin and Hebei are all more than 90 per­cent reliant on coal for ener­gy, Tsinghua’s research showed.

    Huo and aca­d­e­mics point out that, at the very least, the pro­lif­er­a­tion of elec­tric vehi­cles push­es more sources of pol­lu­tion away from heav­i­ly pop­u­lat­ed urban cen­ters.

    What­ev­er the impact, Qin Lihong, pres­i­dent of start­up elec­tric automak­er Nex­tEV, said clean­ing the grid would be the quick­est route to clear skies.

    “It’s much eas­i­er for soci­ety to make hun­dreds of pow­er plants bet­ter than change the hun­dreds of mil­lions of cars in thou­sands of cities,” he said.

    “A series of stud­ies by Tsinghua Uni­ver­si­ty, whose alum­ni includes the incum­bent pres­i­dent, showed elec­tric vehi­cles charged in Chi­na pro­duce two to five times as much par­tic­u­late mat­ter and chem­i­cals that con­tribute to smog ver­sus petrol-engine cars. Hybrid vehi­cles fare lit­tle bet­ter.”
    Well, let’s hope Chi­na’s plans to con­vert the grid to renew­able fuel or clean-coal tech­nol­o­gy as part of efforts to cut car­bon emis­sions by 60 per­cent by 2020 go accord­ing to plan. Rapid­ly. But since there’s a good chance it won’t go to plan and take much longer to make that tran­si­tion, it’s also going to be worth keep­ing in mind that if VW, and any oth­er auto man­u­fac­tur­er, wants to tout elec­tric vehi­cles as a sign of their eco-friend­li­ness these man­u­fac­tur­ers had bet­ter become major lob­by­ists for green elec­tric­i­ty. And why not? It would be great brand­ing. Plus, they could even push for gov­ern­ment sub­si­dies for green elec­tric­i­ty and, sure, every­one would know they’re doing that in order to make their elec­tric cars more cost effi­cient for con­sumers, but who cares. In the con­text of a glob­al envi­ron­men­tal cri­sis, being known as a lob­by­ing for green elec­tric­i­ty sub­si­dies would be great brand­ing too.

    So in addi­tion to hop­ing Chi­na makes its green elec­tric­i­ty goals in time, let’s also hope the auto indus­try, and not just VW, rec­og­nizes the incred­i­ble oppor­tu­ni­ty the whole indus­try has to rebrand itself as a major part of the solu­tion to this glob­al envi­ron­men­tal cri­sis by turn­ing itself into a glob­al lob­by for pub­lic and pri­vate invest­ments in green elec­tric­i­ty gen­er­a­tion every­where. Not just in Chi­na. Because Chi­na’s clean car conun­drum isn’t lim­it­ed to Chi­na.

    Posted by Pterrafractyl | June 17, 2016, 1:49 pm
  10. Is VW’s ‘diesel­gate’ scan­dal about to become a much wider indus­try-wide scan­dal? It’s look­ing like it now that Ger­many has asked the EU to inves­ti­gate diesel emis­sions cheat­ing in Fiat Chrysler’s vehi­cles. And while this move is prob­a­bly moti­vat­ed, in part, on shoring up the rep­u­ta­tion of Ger­many’s auto indus­try (rel­a­tive­ly speak­ing), a big indus­try-wide crack­down on emis­sions cheat­ing has always been one of the best pos­si­ble out­comes once VW’s scan­dal emerged. So let’s hope this is just the begin­ning of a big round of mutu­al recrim­i­na­tions and there’s all sorts of oth­er inves­ti­ga­tions into still-undis­cov­ered emis­sion cheat­ing “devices” on the way. Fight! Fight! Fight!:

    Reuters

    Ger­many goes to EU with accu­sa­tion of Fiat emis­sions cheat­ing

    Thu Sep 1, 2016 2:35pm EDT

    Ger­many’s Trans­port Min­istry has asked the Euro­pean Com­mis­sion to inves­ti­gate exhaust emis­sions of Fiat Chrysler (FCHA.MI) vehi­cles for poten­tial ille­gal manip­u­la­tion devices, Ger­man gov­ern­ment doc­u­ments showed on Thurs­day.

    Ger­many’s motor vehi­cle author­i­ty KBA began test­ing the vehi­cles of sev­er­al man­u­fac­tur­ers, includ­ing Fiat, after Volk­swa­gen’s (VOWG_p.DE) admis­sion in Sep­tem­ber last year that it had cheat­ed emis­sions tests with motor-man­age­ment soft­ware.

    The direct approach to the Euro­pean Union exec­u­tive comes after the Ger­man trans­port min­istry raised con­cerns over Fiat vehi­cles with Ital­ian author­i­ties ear­li­er this year and a sub­se­quent rejec­tion by Ital­ian author­i­ties of claims that Fiat and Chrysler vehi­cles used ille­gal exhaust manip­u­la­tion devices.

    This week’s let­ter to the Euro­pean Com­mis­sion, which was seen by Reuters, said that tests by Ger­man author­i­ties on the Fiat 500X, Fiat Doblo and Jeep Rene­gade could prove the “ille­gal use of a device to switch off exhaust treat­ment sys­tems” and urged the Com­mis­sion to con­sult with Ital­ian author­i­ties to resolve the issue.

    A Fiat spokes­woman said on Thurs­day that the com­pa­ny’s cars con­form to cur­rent emis­sions rules and do not con­tain defeat devices.

    The Com­mis­sion, mean­while, said that it is the respon­si­bil­i­ty of the Ital­ian author­i­ties to rem­e­dy wrong­do­ings.

    “It is first and fore­most a dia­logue between the two mem­ber states con­cerned, with an oblig­a­tion to keep the Com­mis­sion informed and the pos­si­bil­i­ty for the Com­mis­sion to facil­i­tate a solu­tion if no agree­ment can be found,” the Com­mis­sion said in a state­ment.

    A source at the Ital­ian infra­struc­ture min­istry, which includes the nation­al motor vehi­cle author­i­ty, said Italy had not received any com­mu­ni­ca­tion from the Ger­man gov­ern­ment on the mat­ter.

    The source said Ital­ian tests had shown Fiat 500 cars con­formed to emis­sions rules and did not con­tain defeat devices, adding that the KBA had nev­er said it dis­agreed with Italy’s find­ings.

    As part of a widen­ing clam­p­down on health-threat­en­ing nitro­gen oxide (NOx) pol­lu­tion lev­els in the wake of the VW scan­dal, the KBA test­ed 53 dif­fer­ent vehi­cles and found that car­mak­ers were mak­ing lib­er­al use of what they described as a “ther­mal win­dow”.

    ...

    ““It is first and fore­most a dia­logue between the two mem­ber states con­cerned, with an oblig­a­tion to keep the Com­mis­sion informed and the pos­si­bil­i­ty for the Com­mis­sion to facil­i­tate a solu­tion if no agree­ment can be found,” the Com­mis­sion said in a state­ment.”

    So Ger­many brings charges to the EU Com­mis­sions, and the EU Com­mis­sions responds by telling Ger­many and Italy to work it out them­selves and the EU Com­mis­sion will only get involved if no com­mon agree­ment can be found. And the Ital­ian inves­ti­ga­tors claim they don’t see an emis­sions prob­lem at all. Assum­ing they don’t arrive at an agree­ment it appears the next phased a diesel­gate is going to cen­ter around Italy and Ger­many lobbying/pressuring the EU Com­mis­sion. The same EU Com­mis­sions that knew about the cheat­ing for years and did noth­ing due, in large part, to pres­sure from the auto indus­try, pri­mar­i­ly the Ger­man auto indus­try. That should be inter­est­ing.

    And if Ger­many suc­ceeds, it’s going to be a reminder to the whole EU that, giv­en the very uneven nature of the EU’s pow­er struc­ture, one of the best ways to clean up cor­rup­tion in the EU’s reg­u­la­to­ry agen­cies is for a big Ger­man scan­dal to take place in some sec­tor, at which point the mutu­al recrim­i­na­tions that will start hap­pen­ing and hope­ful­ly the rest of the nation­al indus­tries will get cleaned up too. It’s also a remind that the EU is a strange union.

    Posted by Pterrafractyl | September 2, 2016, 2:33 pm
  11. It’s offi­cial: VW is pay­ing the largest auto-scan­dal set­tle­ment in US his­to­ry:

    Los Ange­les Times

    The biggest auto-scan­dal set­tle­ment in U.S. his­to­ry was just approved. VW buy­backs start soon

    James F. Peltz

    Octobe 25,2016, 2:45 PM

    A fed­er­al judge has approved a $14.7‑billion set­tle­ment in the Volk­swa­gen emis­sions-cheat­ing case, the largest auto-scan­dal set­tle­ment in U.S. his­to­ry.

    The deal, approved Tues­day, gives about 475,000 own­ers of Volk­swa­gens and Aud­is with 2‑liter diesel engines the oppor­tu­ni­ty to have their cars bought back or mod­i­fied by Volk­swa­gen and to seek addi­tion­al cash com­pen­sa­tion. It also pro­vides bil­lions of dol­lars to sup­port envi­ron­men­tal pro­grams, reduce emis­sions and pro­mote zero-emis­sions vehi­cles.

    U.S. Dis­trict Judge Charles Brey­er in San Fran­cis­co, who has over­seen the lit­i­ga­tion against the Ger­man automak­er, approved the set­tle­ment that was pro­posed in July. He called the deal “fair, rea­son­able and ade­quate.”

    The VW scan­dal erupt­ed a year ago when Volk­swa­gen admit­ted that it had installed “cheat devices” on diesel-pow­ered cars from 2009 through 2015. The devices enabled the vehi­cles’ engines to emit less pol­lu­tants dur­ing emis­sions tests than dur­ing nor­mal road use.

    The scan­dal involved near­ly 600,000 cars in the Unit­ed States, includ­ing about 71,000 in Cal­i­for­nia, and 11 mil­lion Volk­swa­gen vehi­cles world­wide.

    Volk­swa­gen said Tues­day that it would start to imple­ment the U.S. set­tle­ment imme­di­ate­ly and that it was hir­ing 900 peo­ple to help with the buy­backs, includ­ing one employ­ee to be sta­tioned at each of its 652 U.S. deal­er­ships.

    The automak­er also has a web­site, vwcourtsettlement.com, with details about the set­tle­ment and instruc­tions for peo­ple who own or lease affect­ed cars. Terms of the set­tle­ment and a list of the vehi­cles involved also are avail­able at on the court’s web­site.

    The set­tle­ment “is an impor­tant mile­stone in our jour­ney to make things right in the Unit­ed States,” Hin­rich Woe­bck­en, chief exec­u­tive of Volk­swa­gen Group of Amer­i­ca Inc., said in a state­ment.

    Under the set­tle­ment, own­ers of cer­tain 2‑liter diesel cars made by Volk­swa­gen in the mod­el years 2009 through 2015 will receive between $12,500 and $44,000 from the automak­er to buy back their cars. Leas­es of those vehi­cles may be ter­mi­nat­ed with­out penal­ty, and lease­hold­ers also may seek cash pay­ments.

    Instead of hav­ing their cars bought back, dri­vers can choose to have VW mod­i­fy their vehi­cles to meet emis­sions stan­dards — once that method is approved by the Cal­i­for­nia Air Resources Board and the Envi­ron­men­tal Pro­tec­tion Agency. Fed­er­al offi­cials said such a mod­i­fi­ca­tion does not yet exist, though the com­pa­ny is work­ing on a fix.

    Regard­less of whether they choose the buy­back or mod­i­fi­ca­tion option, own­ers also will receive a cash pay­ment of at least $5,100 and as much as $10,000, depend­ing on the mod­el.

    The 475,000 cars affect­ed by the agree­ment include Volkswagen’s pop­u­lar Bee­tles, Golfs, Jet­tas and Pas­sats. Some Audi A3s also are cov­ered.

    The agree­ment does not cov­er about 90,000 cars with 3.0‑liter engines that also had the cheat­ing soft­ware. Volk­swa­gen, reg­u­la­tors and con­sumers’ lawyers are still nego­ti­at­ing a pos­si­ble set­tle­ment for those vehi­cles.

    Under the deal, Volk­swa­gen will pay $2.7 bil­lion into a trust to sup­port envi­ron­men­tal pro­grams and reduce emis­sions, as well as shell out $2 bil­lion over a 10-year peri­od to invest in and pro­mote zero-emis­sions vehi­cles.

    Volk­swa­gen over­all is to spend up to $10 bil­lion to buy back or mod­i­fy the VW and Audi 2.0‑liter diesel vehi­cles in the Unit­ed States and to give addi­tion­al com­pen­sa­tion to car own­ers and lessees. The final fig­ure depends on how many peo­ple take advan­tage of the offer.

    “The funds won’t ful­ly com­pen­sate own­ers who thought they were buy­ing a bet­ter vehi­cle, but it is a strong step toward ensur­ing Volk­swa­gen won’t try to cheat again,” Kathryn Phillips, direc­tor of Sier­ra Club in Cal­i­for­nia, said in a state­ment. “Volk­swa­gen chose to poi­son our fam­i­lies with dan­ger­ous pol­lu­tion just to pad its pock­et­book.”

    ...

    “Instead of hav­ing their cars bought back, dri­vers can choose to have VW mod­i­fy their vehi­cles to meet emis­sions stan­dards — once that method is approved by the Cal­i­for­nia Air Resources Board and the Envi­ron­men­tal Pro­tec­tion Agency. Fed­er­al offi­cials said such a mod­i­fi­ca­tion does not yet exist, though the com­pa­ny is work­ing on a fix.”

    Well, let’s hope VW fig­ures out an actu­al fix for the vehi­cles. Because they’re pre­sum­ably going to be dri­ven by some­one, whether its the cur­rent own­ers or the future own­ers who buy these cars on the glob­al used car mar­ket that’s about to get flood­ed with cheap used diesel vehi­cles. It’ll be a pret­ty big prob­lem if no fix is avail­able. And not just for VW’s woes in the US. Because don’t for­get that the num­ber of impact­ed VW diesel vehi­cles in US mar­ket is dwarfed by the VW diesel mar­ket in the EU. And as we learned last month, fix­ing the vehi­cles is the only offer VW is mak­ing to its EU cus­tomers:

    Reuters

    EU Com­mis­sion says VW pledged to fix all cars in Europe by late 2017

    Wed Sep 21, 2016 | 1:43pm EDT

    Volk­swa­gen pledged to fix all cars equipped with illic­it engine soft­ware in Europe by autumn 2017, the Euro­pean Com­mis­sion said on Wednes­day after talks with the car­mak­er to ensure it is doing enough for affect­ed clients.

    At a meet­ing with con­sumer Com­mis­sion­er Vera Jouro­va, VW board mem­ber Fran­cis­co Javier Gar­cia Sanz com­mit­ted to a plan to inform cus­tomers by year’s end of the need for a tech­ni­cal fix to bring diesel cars into line with EU caps on tox­ic nitro­gen oxide (NOx) emis­sions, Jourova’s spokesman said.

    The Ger­man car­mak­er also com­mit­ted “to have all cars repaired by autumn 2017,” spokesman Chris­t­ian Wigand said, adding the car­mark­er would offer clients “proof of con­for­mi­ty.”

    VW has admit­ted that it installed improp­er soft­ware that deac­ti­vat­ed pol­lu­tion con­trols on more than 11 mil­lion diesel vehi­cles sold world­wide.

    EU offi­cials have called on the Ger­man car­mak­er to do more to com­pen­sate Euro­pean clients since its $15 bil­lion set­tle­ment in the Unit­ed States for using the cheat soft­ware, say­ing it is unfair for them to be treat­ed dif­fer­ent­ly.

    “Volk­swa­gen com­mit­ted to an EU-wide action plan today, which is an impor­tant step towards a fair treat­ment of con­sumers,” Jouro­va said in a state­ment.

    Volk­swa­gen has reject­ed sug­ges­tions it may have breached EU con­sumer rules and said it does not see the need to com­pen­sate affect­ed car own­ers.

    Europe’s largest automak­er is mak­ing slow progress on fix­ing cars in Europe, hav­ing repaired less than 10 per­cent of the 8.5 mil­lion affect­ed mod­els in Europe.

    It said the major­i­ty of the cars in Europe can be repaired this year, but an unspec­i­fied num­ber will have to wait.

    ...

    “EU offi­cials have called on the Ger­man car­mak­er to do more to com­pen­sate Euro­pean clients since its $15 bil­lion set­tle­ment in the Unit­ed States for using the cheat soft­ware, say­ing it is unfair for them to be treat­ed dif­fer­ent­ly.”

    That was the EU’s response a month ago before we learned the final amount of the US fine: Euro­pean cus­tomers deserve com­pen­sa­tion too. But as we just saw, VW dis­agrees with that assess­ment:

    ...

    Volk­swa­gen has reject­ed sug­ges­tions it may have breached EU con­sumer rules and said it does not see the need to com­pen­sate affect­ed car own­ers.

    ...

    And as reports back in Jan­u­ary indi­cat­ed, whether or not EU offi­cials share VW’s assess­ment of its cul­pa­bil­i­ty towards EU con­sumers, basi­cal­ly no one is expect­ing a sig­nif­i­cant EU fine at all because the legal frame­work does­n’t real­ly exist to do it:

    Reuters

    Fac­ing U.S. storm, VW set for eas­i­er ride in Europe on emis­sions scan­dal

    By Bar­bara Lewis and Kirstin Rid­ley | BRUSSELS/LONDON
    Sat Jan 9, 2016 | 2:38pm EST

    Volk­swa­gen (VOWG_p.DE) is unlike­ly to face U.S.-style fines in Europe over its emis­sions scan­dal because of a soft­er reg­u­la­to­ry regime and its home coun­try Ger­many’s deter­mi­na­tion to pro­tect its car indus­try, EU sources and legal experts say.

    The car­mak­er has been embroiled in cri­sis since last Sep­tem­ber, when it admit­ted it had cheat­ed U.S. emis­sions tests using soft­ware known as “defeat devices”.

    The U.S. Jus­tice Depart­ment is suing the Ger­man com­pa­ny for up to $46 bil­lion for alleged­ly vio­lat­ing envi­ron­men­tal laws — though some legal experts expect the final set­tle­ment to be far low­er.

    Oth­er coun­tries have also act­ed — Brazil and South Korea, for exam­ple, have both imposed fines of well over $10 mil­lion on VW for cheat­ing on emis­sions.

    But although VW says 8.5 mil­lion of the 11 mil­lion vehi­cles world-wide that con­tain banned soft­ware are in Europe, no Euro­pean nation­al author­i­ty has ordered any penal­ties so far.

    EU sources and lawyers say it would be sur­prise if the firm received any sig­nif­i­cant fines in the Euro­pean Union.

    While the bloc out­lawed defeat devices in 2007, there are no defined penal­ties for using such soft­ware to mask emis­sions. Under U.S. law, by con­trast, car­mak­ers must iden­ti­fy and describe any emis­sions con­trol devices, mean­ing they can be pur­sued for omis­sion or wrong­ful dec­la­ra­tion, widen­ing the scope for puni­tive action.

    EU states are also reluc­tant to mete out tough finan­cial penal­ties, because of an unwrit­ten rule in the 28-mem­ber club that some nation­al inter­ests are sacred, accord­ing to the EU sources — and Ger­many’s car indus­try has tra­di­tion­al­ly been one of them.

    VW, Europe’s biggest motor man­u­fac­tur­er, employs more than 750,000 peo­ple in Ger­many, and has been a sym­bol of the nation’s engi­neer­ing prowess. VW, Daim­ler and BMW, Ger­many’s big three Ger­man car­mak­ers, hauled in rev­enues of 413 bil­lion euros in 2014, far big­ger than the Ger­man fed­er­al bud­get, which stood at just under 300 bil­lion.

    Even if the Euro­pean Com­mis­sion want­ed to impose penal­ties on VW, its pow­ers are curbed. The EU exec­u­tive can direct­ly only impose finan­cial sanc­tions on trade and com­pe­ti­tion issues. Lucas Bergkamp, a part­ner at law firm Hunton and Williams in Brus­sels, said any change to that “would be a huge step”.

    “In gen­er­al when com­pa­nies are already in great dif­fi­cul­ties due to some cri­sis, Euro­pean gov­ern­ments tend to be under­stand­ing and will not nec­es­sar­i­ly seek the impo­si­tion of all pos­si­ble penal­ties,” he said, adding he could not com­ment on VW specif­i­cal­ly.

    VW also declined to com­ment on any­thing per­tain­ing to pos­si­ble fines in Europe.

    LAWSUIT THREAT

    Britain has said it could pros­e­cute a vehi­cle man­u­fac­tur­er if there were proof it knew or was reck­less when sup­ply­ing false infor­ma­tion, for which there is an unlim­it­ed fine on con­vic­tion.

    But prov­ing reck­less­ness is a high hur­dle — it remains unclear who at Volk­swa­gen knew what and when, while the com­pa­ny itself has blamed a small cadre of employ­ees.

    Lawyers say a big­ger finan­cial threat to VW than any EU reg­u­la­to­ry fines is like­ly to come from pri­vate lit­i­ga­tion. Lawyers are gath­er­ing investors for group actions in Europe and hun­dreds of law­suits on behalf of enraged dri­vers have been filed in the Unit­ed States.r

    The VW scan­dal has exposed the weak­ness­es of the reg­u­la­to­ry sys­tem in Europe, where there is no EU-wide author­i­ty with over­sight of car test­ing — like the U.S. Envi­ron­men­tal Pro­tec­tion Agency (EPA) — but instead a patch­work of 28 nation­al agen­cies with vary­ing stan­dards.

    A vehi­cle approved in one coun­try can be sold across the bloc, which envi­ron­men­tal cam­paign­ers say allows car­mak­ers to take their pick from nation­al reg­u­la­tors.

    How­ev­er Euro­pean Com­mis­sion pro­pos­als, expect­ed over the com­ing weeks, will add some teeth to the EU reg­u­la­to­ry regime and penal­ties for exces­sive emis­sions could start to bite around the start of the next decade.

    Some mem­bers of the Euro­pean Par­lia­ment and envi­ron­ment cam­paign­ers want an inde­pen­dent EU-wide reg­u­la­tor, along the lines of the EPA.

    Euro­pean Com­mis­sion spokes­woman Lucia Caudet did not entire­ly rule out estab­lish­ing such a body, but said there were oth­er ways to improve over­sight.

    “All options are on the table, but greater over­sight can be achieved with­out the need for anoth­er EU agency,” she said, adding it was too soon to give detail of a pro­pos­al expect­ed “in the com­ing weeks”.

    The Inter­na­tion­al Coun­cil on Clean Trans­porta­tion (ICCT), which alert­ed the EPA to Volk­swa­gen’s use of defeat devices to trick reg­u­la­tors, has said manda­to­ry, inde­pen­dent test­ing of cars once they are in use is cru­cial to good reg­u­la­tion.

    EU PLAN

    EU sources said the Euro­pean Com­mis­sion pro­pos­al was expect­ed to ensure greater inde­pen­dence of the pri­vate firms that test car emis­sions in the bloc, which typ­i­cal­ly have worked very close­ly with the nation­al reg­u­la­tors.

    The pro­pos­al, which would then face around 18 months of vet­ting from the Euro­pean Par­lia­ment and mem­ber states before it can become law, could also hand pow­ers to the Euro­pean Com­mis­sion to ver­i­fy that cars on the mar­ket con­form with stan­dards and to exact clear penal­ties if they do not.

    The sources said the plan from the EU exec­u­tive would be viewed as far too ambi­tious by some mem­ber states and not ambi­tious enough by mem­bers of the Euro­pean Par­lia­ment.

    The par­lia­ment has set up an inquiry into whether the Euro­pean Com­mis­sion has done enough to police the car indus­try, but the Com­mis­sion also faces counter-pres­sure from the indus­try and mem­ber states.

    Even at the height of the VW scan­dal, in Octo­ber last year Ger­many led the dilu­tion of sep­a­rate new rules to restrict how much pol­lu­tants cars are allowed to emit above offi­cial lim­its, EU sources said.

    ...

    “EU sources and lawyers say it would be sur­prise if the firm received any sig­nif­i­cant fines in the Euro­pean Union.”

    That was Jan­u­ary. And here we are with a his­tor­i­cal­ly large fine in the US and basi­cal­ly noth­ing but a VW pledge to fix the cars in the EU. Sur­prise. And that’s why it’s prob­a­bly not very sur­pris­ing that the EU’s mes­sage to VW in the wake of this his­toric set­tle­ment in the US is to strong­ly ask VW to please guar­an­teed that it can come up with a fix:

    Reuters UK

    EU offi­cial urges VW to do more for Euro­pean cus­tomers affect­ed by Diesel­gate

    Mon Oct 24, 2016 | 4:34pm BST

    Euro­pean Union con­sumer cham­pi­on Vera Jouro­va has sought to ramp up pres­sure on Volk­swa­gen (VOWG_p.DE) to com­pen­sate Euro­pean own­ers of diesel vehi­cles rigged to cheat pol­lu­tion con­trols and asked it for guar­an­tees that its tech­ni­cal fix will work.

    Jouro­va, the EU’s com­mis­sion­er for con­sumer affairs, has writ­ten to VW offi­cial Fran­cis­co Javier Gar­cia Sanz ask­ing for proof that the car­mak­er can ful­fil a pledge to make vehi­cles com­ply with lim­its on nitro­gen oxide (NOx) fumes by autumn 2017, a Com­mis­sion offi­cial told Reuters on Mon­day.

    “We need VW to guar­an­tee, in a legal­ly bind­ing way and with­out any time lim­it, that the repairs will work and do not have any neg­a­tive impact,” the offi­cial said.

    The let­ter is in response to plans pre­sent­ed by Gar­cia Sanz last month to address harm caused to VW’s Euro­pean clients with a fix the com­pa­ny says will bring vehi­cles in line with EU law.

    VW admit­ted to U.S. reg­u­la­tors last year that it installed illic­it soft­ware on more than 11 mil­lion diesel vehi­cles sold world­wide.

    The major­i­ty of the affect­ed vehi­cles are in Europe and Jourova’s let­ter shows the grow­ing frus­tra­tion among EU offi­cials over the gap in VW’s approach to Euro­pean cus­tomers while offer­ing cash pay­outs to U.S. own­ers of its cars.

    VW has so far set aside about $18 bil­lion to cov­er the cost of vehi­cle refits and a set­tle­ment with U.S. author­i­ties. It also faces dam­ages claims from investors over its dis­clo­sure of the emis­sions cheat­ing.

    Jourova’s let­ter called on the Ger­man car­mak­er to offer to repur­chase some vehi­cles, the offi­cial said.

    PATCHWORK REGULATION

    The com­mis­sion­er said that VW could be in breach EU con­sumer law and repeat­ed calls for vol­un­tary com­pen­sa­tion because Euro­pean con­sumers are stymied by their inabil­i­ty to file Unit­ed States-style class-action law­suits in many EU nations and by weak­er EU rules on defeat devices.

    Her let­ter to VW said that the com­pa­ny had an oblig­a­tion to ensure its diesel fix does not leave con­sumers out of pock­et in terms of fuel effi­cien­cy and engine life.

    VW, which has pre­vi­ous­ly reject­ed sug­ges­tions it may have breached EU con­sumer rules, says it is meet­ing legal require­ments and that cus­tomers will receive cer­ti­fi­ca­tion to show their vehi­cles con­form with emis­sions require­ments.

    The com­pa­ny said on Mon­day that it has pro­vid­ed Jouro­va with assur­ance that it would inten­si­fy dia­logue with con­sumers if the need aris­es.

    Jouro­va, who sources said is due to meet again with Gar­cia on Thurs­day, has urged con­sumer groups to organ­ise law­suits based on alle­ga­tions that VW duped con­sumers by pro­mot­ing their cars as envi­ron­men­tal­ly friend­ly.

    While the EU has lit­tle lever­age in the domain of con­sumer law, the EU’s Indus­try Com­mis­sion­er has threat­ened legal action against EU nations if they fail to enforce EU laws on air qual­i­ty.

    “The major­i­ty of the affect­ed vehi­cles are in Europe and Jourova’s let­ter shows the grow­ing frus­tra­tion among EU offi­cials over the gap in VW’s approach to Euro­pean cus­tomers while offer­ing cash pay­outs to U.S. own­ers of its cars”

    Yeah, you can imag­ine how VW’s EU cus­tomers might be a lit­tle miffed by the his­tor­i­cal­ly large US fine vs the EU’s “please fix this” over­all stance. Espe­cial­ly after see­ing respons­es like this from VW:

    ...

    The com­pa­ny said on Mon­day that it has pro­vid­ed Jouro­va with assur­ance that it would inten­si­fy dia­logue with con­sumers if the need aris­es.

    ...

    Yes, VW’s response to the EU’s will be hap­py to “inten­si­fy dia­logue with con­sumers” if the need aris­es. That should fix every­thing.

    Posted by Pterrafractyl | October 25, 2016, 6:41 pm
  12. Here’s some­thing to watch with the VW diesel scan­dal: while VW was appar­ent­ly hop­ing to resolve its set­tle­ment with the US before the Trump admin­is­tra­tion begins, it does­n’t look like that’s going to hap­pen. And that rais­es a lot of ques­tions. Espe­cial­ly after the US just arrest­ed a VW exec­u­tive in Flori­da.

    First, note the pro­fessed hope of VW imme­di­ate­ly fol­low­ing the elec­tion. It was most­ly hope that Trump’s win won’t bring any addi­tion­al neg­a­tive con­se­quences for VW’s set­tle­ment:

    Bloomberg
    Tech­nol­o­gy

    VW Wary Trump Elec­tion May Dis­rupt Diesel-Set­tle­ment Talks

    by Christoph Rauwald
    and Elis­a­beth Behrmann

    Novem­ber 9, 2016, 6:34 AM CST Novem­ber 9, 2016, 9:41 AM CST

    * CEO Mueller hopes vote doesn’t por­tend ‘neg­a­tive con­se­quences’
    * Volk­swa­gen near­ing ‘con­sent decree’ with U.S. author­i­ties

    Volk­swa­gen AG expressed con­cern that Don­ald Trump’s elec­tion as U.S. pres­i­dent could dis­rupt talks to reach a set­tle­ment with U.S. author­i­ties over the Ger­man automaker’s cheat­ing on emis­sions tests for diesel cars.

    “I hope the elec­tion result won’t have more neg­a­tive con­se­quences for Volk­swa­gen,” Chief Exec­u­tive Offi­cer Matthias Mueller said Wednes­day at a con­fer­ence host­ed by Ger­man dai­ly Han­dels­blatt in Munich. “I think we’re at a point where a ‘con­sent decree’ could be reached, but that’s the Depart­ment of Justice’s deci­sion, not mine.”

    While Volk­swa­gen has agreed to a $14.7 bil­lion civ­il set­tle­ment cov­er­ing 480,000 cars with 2.0‑liter diesel engines, the com­pa­ny still faces crim­i­nal penal­ties and has yet to reach a deal on about 80,000 cars with taint­ed 3.0‑liter motors. A delay in the talks would pro­long the scan­dal and com­pli­cate Volkswagen’s efforts to emerge from the cri­sis, which erupt­ed in Sep­tem­ber 2015.

    “The elec­tion of Don­ald Trump caus­es me great con­cern,” Stephan Weil, prime min­is­ter of the Ger­man state of Low­er Sax­ony and mem­ber of Volkswagen’s super­vi­so­ry board, said in an e‑mailed state­ment. “Trump’s first task should be to bridge the exist­ing divides — that he him­self deep­ened dur­ing the past weeks — and car­ry out his duties with pru­dence and care.”

    ...

    ““I hope the elec­tion result won’t have more neg­a­tive con­se­quences for Volk­swa­gen,” Chief Exec­u­tive Offi­cer Matthias Mueller said Wednes­day at a con­fer­ence host­ed by Ger­man dai­ly Han­dels­blatt in Munich. “I think we’re at a point where a ‘con­sent decree’ could be reached, but that’s the Depart­ment of Justice’s deci­sion, not mine.””

    So right after the US elec­tions we hear a kind of cau­tious opti­mism for VW about the tra­jec­to­ry of the inves­ti­ga­tion cou­pled with a vague con­cern over how a Trump admin­is­tra­tion might impact the set­tle­ment if it’s not con­clud­ed in time. The was Novem­ber. By ear­ly Decem­ber, how­ev­er, things weren’t look­ing so good for VW’s exec­u­tives:

    Bloomberg News

    VW’s Ger­man Execs Gird to Face Ques­tions From U.S. Author­i­ties

    By Tom Schoen­berg and Alan Katz
    Decem­ber 5, 2016

    Dozens of Volk­swa­gen AG offi­cials in Ger­many have hired U.S. crim­i­nal defense lawyers as the Jus­tice Depart­ment ramps up meet­ings with man­agers to gath­er evi­dence that may lead to charges against exec­u­tives, peo­ple famil­iar with the mat­ter said.

    U.S. author­i­ties have trav­eled to Ger­many to arrange inter­views with man­agers and seek coop­er­a­tion in their probe of the automaker’s efforts to sub­vert anti-pol­lu­tion rules, the peo­ple said. With some inter­views yet to take place, it makes it less like­ly, they said, that pros­e­cu­tors will be able to reach a res­o­lu­tion with the com­pa­ny by the close of the Oba­ma admin­is­tra­tion as some offi­cials had hoped.

    That activ­i­ty, and the Jus­tice Department’s efforts to inter­view exec­u­tives on for­eign soil, shows the U.S. is keep­ing pres­sure on the automak­er after it admit­ted last year that it had rigged its diesel engines to low­er their emis­sions dur­ing test­ing.

    The U.S. has already helped bro­ker a civ­il set­tle­ment that will cost the Wolfs­burg, Ger­many, com­pa­ny more than $16 bil­lion in fines and penal­ties. The Jus­tice Depart­ment, char­ac­ter­iz­ing the diesel cheat­ing as a 10-year con­spir­a­cy to deceive envi­ron­men­tal offi­cials, has said it will pur­sue crim­i­nal charges against not only the com­pa­ny but also indi­vid­u­als.

    Envi­ron­men­tal Cap­stone

    The two-pronged approach would make good on the department’s 2015 call for pros­e­cu­tors to focus on the indi­vid­u­als behind cor­po­rate mis­deeds, a pol­i­cy draft­ed after crit­i­cism that it had entered into multi­bil­lion-dol­lar cor­po­rate set­tle­ments while fail­ing to pros­e­cute the peo­ple respon­si­ble. The case could also serve as a cap­stone to the envi­ron­men­tal-enforce­ment cas­es pur­sued under the Oba­ma admin­is­tra­tion, which includes the $25 bil­lion in crim­i­nal fines and civ­il penal­ties paid by BP Plc for the Deep­wa­ter Hori­zon oil spill.

    Peter Carr, a Jus­tice Depart­ment spokesman, declined to com­ment.

    “Volk­swa­gen con­tin­ues to coop­er­ate with the Depart­ment of Jus­tice as we work to resolve remain­ing mat­ters in the Unit­ed States,” Eric Fel­ber, a spokesman, said in an e‑mailed state­ment.

    The U.S. inves­ti­ga­tors have urged some of the VW employ­ees to come to the U.S., where they can be inter­viewed away from Ger­man pros­e­cu­tors, who are build­ing their own cas­es against com­pa­ny offi­cials, said one of the peo­ple.

    U.S. pros­e­cu­tors may seek coop­er­a­tion from some of the employ­ees to tes­ti­fy against those above them in the orga­ni­za­tion, the peo­ple said, as is typ­i­cal with such cas­es. In Sep­tem­ber, U.S. pros­e­cu­tors secured a guilty plea and coop­er­a­tion from a for­mer VW soft­ware engi­neer who report­ed to Ger­man exec­u­tives.

    Winterkorn’s Exit

    Beyond that engi­neer, it isn’t clear who, if any­one, may face charges in the inves­ti­ga­tion into fraud and Clean Air Act vio­la­tions. Nor is it clear whether for­mer Chief Exec­u­tive Mar­tin Win­terko­rn, who was forced out as a result of the scan­dal, or the company’s most senior exec­u­tives who make up what is known as the man­age­ment board, are a focus of the U.S. probe. Win­terko­rn took respon­si­bil­i­ty for the scan­dal when he resigned in Sep­tem­ber 2015 but said he wasn’t aware of any wrong­do­ing on his part.

    For a primer on Volkswagen’s Diesel Emis­sions Scan­dal, click here

    VW has said top man­age­ment were unaware of the deci­sion to install the soft­ware to cheat emis­sions tests. “The then and cur­rent board of man­age­ment of Volk­swa­gen AG had, at any rate, no knowl­edge of the use of unlaw­ful engine-man­age­ment soft­ware at the time,” Volk­swa­gen wrote in its annu­al report for 2015, a state­ment it has cit­ed in response to sub­se­quent inquiries.

    Ger­man pros­e­cu­tors have said that they have no evi­dence that shows that Volkswagen’s top lead­er­ship approved the diesel-cheat­ing pro­gram. Ger­man author­i­ties are inves­ti­gat­ing whether Win­terko­rn and Chair­man Hans Dieter Poet­sch were too slow to inform the mar­ket about the inves­ti­ga­tion into the cheat­ing devices.

    “Based on care­ful exam­i­na­tion by inter­nal and exter­nal legal experts, the Com­pa­ny reaf­firms its belief that the Volk­swa­gen Board of Man­age­ment duly ful­filled its dis­clo­sure oblig­a­tion under Ger­man cap­i­tal mar­kets law,” Volk­swa­gen said in a Nov. 6 state­ment respond­ing to the alle­ga­tions against Poet­sch. Poet­sch him­self hasn’t made any pub­lic state­ment about that inves­ti­ga­tion or the U.S. crim­i­nal probe.

    Unfin­ished Busi­ness

    The activ­i­ty in the U.S. crim­i­nal case may dash expec­ta­tions set by VW’s chief exec­u­tive offi­cer Matthias Mueller, who said last month that he would like to secure a crim­i­nal set­tle­ment with the U.S. before the new U.S. pres­i­dent takes office on Jan. 20.

    Any unfin­ished busi­ness in the VW mat­ter would pass to the admin­is­tra­tion of pres­i­dent-elect Don­ald Trump, who has said he would name U.S. Sen­a­tor Jeff Ses­sions as attor­ney gen­er­al. At a Sen­ate hear­ing six years ago, Ses­sions, a for­mer fed­er­al pros­e­cu­tor from Alaba­ma, said he wouldn’t back away from charg­ing a major com­pa­ny if there was evi­dence of crim­i­nal con­duct.

    At the time, the Jus­tice Depart­ment was inves­ti­gat­ing BP over the Deep­wa­ter Hori­zon spill. Ses­sions warned that the depart­ment shouldn’t be swayed by con­cerns about whether crim­i­nal charges could harm peo­ple who depend­ed on the com­pa­ny for jobs. “They are not too big too fail,” he said.

    No Extra­di­tions

    The U.S., should it choose to pur­sue charges against exec­u­tives in Ger­many, could face chal­lenges. The U.S. can charge indi­vid­u­als even if Ger­man author­i­ties issue their own indict­ments. But get­ting exec­u­tives to stand tri­al in the U.S. could be dif­fi­cult. Germany’s con­sti­tu­tion doesn’t allow cit­i­zens to be extra­dit­ed out­side the Euro­pean Union. The Jus­tice Depart­ment is explor­ing its options to get exec­u­tives to the U.S., accord­ing to one of the peo­ple famil­iar with the mater.

    In one sce­nario, the U.S. could put pres­sure on the com­pa­ny as set­tle­ment dis­cus­sions advance by fil­ing charges against indi­vid­ual exec­u­tives, issu­ing arrest war­rants and send­ing enforce­ment requests through Inter­pol via the so-called red-notice sys­tem. At the least, that could restrict exec­u­tives from trav­el out­side Ger­many for fear of being detained and flown to the U.S. Inves­ti­ga­tors have already used this tech­nique in inves­ti­ga­tions of glob­al banks for rig­ging bench­mark inter­est rates.

    ...

    The U.S., should it choose to pur­sue charges against exec­u­tives in Ger­many, could face chal­lenges. The U.S. can charge indi­vid­u­als even if Ger­man author­i­ties issue their own indict­ments. But get­ting exec­u­tives to stand tri­al in the U.S. could be dif­fi­cult. Germany’s con­sti­tu­tion doesn’t allow cit­i­zens to be extra­dit­ed out­side the Euro­pean Union. The Jus­tice Depart­ment is explor­ing its options to get exec­u­tives to the U.S., accord­ing to one of the peo­ple famil­iar with the mater”

    Pos­si­ble exec­u­tive extra­di­tions from Ger­many to the US. Uh oh. And note the con­trast with the find­ings of Ger­man pros­e­cu­tors that VW’s exec­u­tives did noth­ing wrong:

    ...
    VW has said top man­age­ment were unaware of the deci­sion to install the soft­ware to cheat emis­sions tests. “The then and cur­rent board of man­age­ment of Volk­swa­gen AG had, at any rate, no knowl­edge of the use of unlaw­ful engine-man­age­ment soft­ware at the time,” Volk­swa­gen wrote in its annu­al report for 2015, a state­ment it has cit­ed in response to sub­se­quent inquiries.

    Ger­man pros­e­cu­tors have said that they have no evi­dence that shows that Volkswagen’s top lead­er­ship approved the diesel-cheat­ing pro­gram. Ger­man author­i­ties are inves­ti­gat­ing whether Win­terko­rn and Chair­man Hans Dieter Poet­sch were too slow to inform the mar­ket about the inves­ti­ga­tion into the cheat­ing devices.

    “Based on care­ful exam­i­na­tion by inter­nal and exter­nal legal experts, the Com­pa­ny reaf­firms its belief that the Volk­swa­gen Board of Man­age­ment duly ful­filled its dis­clo­sure oblig­a­tion under Ger­man cap­i­tal mar­kets law,” Volk­swa­gen said in a Nov. 6 state­ment respond­ing to the alle­ga­tions against Poet­sch. Poet­sch him­self hasn’t made any pub­lic state­ment about that inves­ti­ga­tion or the U.S. crim­i­nal probe.

    ...

    At this point you have to won­der just how much VW is actu­al­ly fear­ing a Trump admin­is­tra­tion as opposed to hop­ing it comes in and saves them. After all, exec­u­tive extra­di­tions aren’t some­thing you see very often in a the inves­ti­ga­tion of a mega-cor­po­ra­tion’s mega-scan­dal. Usu­al­ly it’s just a fine, if that.

    But also note the sen­ti­ments expressed by the like­ly next Attor­ney Gen­er­al, Jeff Ses­sions, when it came to charg­ing large cor­po­ra­tions with crim­i­nal charges when the Jus­tice Depart­ment was inves­ti­gat­ing BP:

    ...

    The activ­i­ty in the U.S. crim­i­nal case may dash expec­ta­tions set by VW’s chief exec­u­tive offi­cer Matthias Mueller, who said last month that he would like to secure a crim­i­nal set­tle­ment with the U.S. before the new U.S. pres­i­dent takes office on Jan. 20.

    Any unfin­ished busi­ness in the VW mat­ter would pass to the admin­is­tra­tion of pres­i­dent-elect Don­ald Trump, who has said he would name U.S. Sen­a­tor Jeff Ses­sions as attor­ney gen­er­al. At a Sen­ate hear­ing six years ago, Ses­sions, a for­mer fed­er­al pros­e­cu­tor from Alaba­ma, said he wouldn’t back away from charg­ing a major com­pa­ny if there was evi­dence of crim­i­nal con­duct.

    At the time, the Jus­tice Depart­ment was inves­ti­gat­ing BP over the Deep­wa­ter Hori­zon spill. Ses­sions warned that the depart­ment shouldn’t be swayed by con­cerns about whether crim­i­nal charges could harm peo­ple who depend­ed on the com­pa­ny for jobs. “They are not too big too fail,” he said.

    ...

    Any unfin­ished busi­ness in the VW mat­ter would pass to the admin­is­tra­tion of pres­i­dent-elect Don­ald Trump, who has said he would name U.S. Sen­a­tor Jeff Ses­sions as attor­ney gen­er­al. At a Sen­ate hear­ing six years ago, Ses­sions, a for­mer fed­er­al pros­e­cu­tor from Alaba­ma, said he wouldn’t back away from charg­ing a major com­pa­ny if there was evi­dence of crim­i­nal con­duct.”

    So if Ses­sions sticks to those sen­ti­ments, he should be pret­ty tough on VW, includ­ing issu­ing crim­i­nal charges. We’ll see what he actu­al­ly does, but that’s what he should do based on his past state­ments. Espe­cial­ly after the arrest of the for­mer top emis­sions com­pli­ance man­ag­er for Volk­swa­gen in the US that just hap­pened today:

    The New York Times

    F.B.I. Arrests Volk­swa­gen Exec­u­tive on Con­spir­a­cy Charge in Emis­sions Scan­dal

    By ADAM GOLDMAN, HIROKO TABUCHI and JACK EWING
    JAN. 9, 2017

    The F.B.I. has arrest­ed a Volk­swa­gen exec­u­tive in Flori­da, accus­ing him of play­ing a cen­tral role in a broad con­spir­a­cy to keep Unit­ed States reg­u­la­tors from dis­cov­er­ing that diesel vehi­cles made by the com­pa­ny were pro­grammed to cheat on emis­sions tests.

    The exec­u­tive, Oliv­er Schmidt, a Ger­man who is the for­mer top emis­sions com­pli­ance man­ag­er for Volk­swa­gen in the Unit­ed States, was arrest­ed on Sat­ur­day by inves­ti­ga­tors in Flori­da on a charge of con­spir­a­cy to defraud the Unit­ed States. He is expect­ed to be arraigned on Mon­day.

    The arrest of Mr. Schmidt is an esca­la­tion of the crim­i­nal inves­ti­ga­tion into emis­sions cheat­ing by Volk­swa­gen and comes amid talks between the com­pa­ny and the Unit­ed States Jus­tice Depart­ment about what penal­ties the car­mak­er should accept as part of a set­tle­ment.

    After a study by West Vir­ginia Uni­ver­si­ty first raised ques­tions over Volkswagen’s diesel motors in ear­ly 2014, Mr. Schmidt played a cen­tral role in try­ing to con­vince reg­u­la­tors that excess emis­sions were caused by tech­ni­cal prob­lems rather than by delib­er­ate cheat­ing, Ian Dins­more, an F.B.I. agent, said in a sworn affi­davit used as the basis for Mr. Schmidt’s arrest.

    Mr. Schmidt deceived Amer­i­can reg­u­la­tors “by offer­ing rea­sons for the dis­crep­an­cy oth­er than the fact that VW was inten­tion­al­ly cheat­ing on U.S. emis­sions tests, in order to allow VW to con­tin­ue to sell diesel vehi­cles in the Unit­ed States,” the affi­davit said.

    Mr. Schmidt con­tin­ued to rep­re­sent Volk­swa­gen after the com­pa­ny admit­ted in Sep­tem­ber that cars were pro­grammed to dupe reg­u­la­tors. He appeared before a com­mit­tee of the British Par­lia­ment in Jan­u­ary, telling leg­is­la­tors that Volkswagen’s behav­ior was not ille­gal in Europe.

    Lawyers rep­re­sent­ing Mr. Schmidt did not respond to requests for com­ment late Sun­day. Offi­cials at the Jus­tice Depart­ment also declined to com­ment, as did an F.B.I. spokesman in Detroit.

    In a state­ment, Jean­nine Gini­van, a spokes­woman for Volk­swa­gen, said that the automak­er “con­tin­ues to coop­er­ate with the Depart­ment of Jus­tice” but that “it would not be appro­pri­ate to com­ment on any ongo­ing inves­ti­ga­tions or to dis­cuss per­son­nel mat­ters.” A Volk­swa­gen spokesman in Ger­many also declined to com­ment.

    Law­suits filed against Volk­swa­gen by the New York and Mass­a­chu­setts state attor­neys gen­er­al accused Mr. Schmidt of play­ing an impor­tant role in the carmaker’s efforts to con­ceal its emis­sions cheat­ing from Unit­ed States reg­u­la­tors.

    In 2014, when Cal­i­for­nia air qual­i­ty offi­cials began an inves­ti­ga­tion of Volk­swa­gen emis­sions, Mr. Schmidt was gen­er­al man­ag­er of Volkswagen’s Engi­neer­ing and Envi­ron­men­tal Office based in Auburn Hills, Mich. For more than a year, he and oth­er Volk­swa­gen offi­cials repeat­ed­ly cit­ed false tech­ni­cal expla­na­tions for the high emis­sions lev­els, the author­i­ties said.

    In Sep­tem­ber 2015, Mr. Schmidt and oth­er Volk­swa­gen offi­cials for­mal­ly acknowl­edged the exis­tence of a so-called defeat device that allowed Volk­swa­gen cars to cheat emis­sions tests.

    Volkswagen’s cov­er-up and belat­ed con­fes­sion angered offi­cials from the Cal­i­for­nia Air Resources Board and the Envi­ron­men­tal Pro­tec­tion Agency, and it is like­ly to have vast­ly increased the cost to the com­pa­ny from the scan­dal. It has already agreed to pay $16 bil­lion to own­ers of diesel vehi­cles and will prob­a­bly have to pay sev­er­al bil­lion dol­lars more in fines.

    Volk­swa­gen even­tu­al­ly said that it had fit­ted 11 mil­lion diesel cars world­wide with ille­gal soft­ware that made the vehi­cles capa­ble of defeat­ing pol­lu­tion tests.

    The soft­ware enabled the cars to sense when they were being test­ed for emis­sions and turn on pol­lu­tion-con­trol sys­tems to curb emis­sions at the cost of engine per­for­mance. But those con­trols were not ful­ly deployed on the road, where cars spewed nitro­gen oxide at up to 40 times the lev­els allowed under the Clean Air Act.

    James Liang, a for­mer Volk­swa­gen engi­neer who worked for the com­pa­ny in Cal­i­for­nia, plead­ed guilty in Sep­tem­ber to charges that includ­ed con­spir­a­cy to defraud the fed­er­al gov­ern­ment and vio­lat­ing the Clean Air Act. But Mr. Schmidt’s arrest brings the inves­ti­ga­tion into the exec­u­tive ranks.

    The arrest came as Volk­swa­gen and the Jus­tice Depart­ment neared a deal to pay more than $2 bil­lion to resolve the crim­i­nal inves­ti­ga­tion into the emis­sions cheat­ing. The com­pa­ny or one of its cor­po­rate enti­ties is expect­ed to plead guilty as part of the deal.

    The set­tle­ment could come as ear­ly as next week, bar­ring any last-minute hic­cups, accord­ing to peo­ple with knowl­edge of the nego­ti­a­tions.

    The Ger­man automak­er has been eager to put the Jus­tice Depart­ment inves­ti­ga­tion behind it before Pres­i­dent-elect Don­ald J. Trump is sworn in on Jan. 20.

    Amer­i­can pros­e­cu­tors had trav­eled to Ger­many in recent months to inter­view Volk­swa­gen exec­u­tives, accord­ing to Ger­man pros­e­cu­tors.

    The crim­i­nal case against Volk­swa­gen, and the poten­tial guilty plea, set it apart from oth­er recent auto indus­try inves­ti­ga­tions. In set­tle­ments with Gen­er­al Motors and Toy­ota over their han­dling of safe­ty defects, for exam­ple, the com­pa­niesagreed to pay large fines but did not plead guilty.

    Pros­e­cu­tors are also mulling crim­i­nal charges against Taka­ta, the Japan­ese man­u­fac­tur­er under crim­i­nal inves­ti­ga­tion for its defec­tive airbags.

    ...

    “Mr. Schmidt deceived Amer­i­can reg­u­la­tors “by offer­ing rea­sons for the dis­crep­an­cy oth­er than the fact that VW was inten­tion­al­ly cheat­ing on U.S. emis­sions tests, in order to allow VW to con­tin­ue to sell diesel vehi­cles in the Unit­ed States,” the affi­davit said.”

    So in the wan­ing weeks the Oba­ma admin­is­tra­tion we’re see­ing a VW exec­u­tive arrest­ed for lying to US reg­u­la­tors about the cause of the emis­sions test­ing dis­crep­an­cy. If that’s the bar for an exec­u­tive get­ting arrest­ed, you have to won­der how many oth­er VW exec­u­tives crossed that thresh­old. Maybe quite a few:

    Bloomberg

    Volk­swa­gen Exec­u­tives in Ger­many to Face U.S. Charges in Diesel Case

    * Charges to fol­low Flori­da arrest of man­ag­er for con­spir­a­cy
    * U.S. crim­i­nal set­tle­ment expect­ed as soon as this week

    by Tom Schoen­berg, David McLaugh­lin, and Andrew M Har­ris
    Jan­u­ary 9, 2017, 8:41 AM CST Jan­u­ary 9, 2017, 1:58 PM CST

    U.S. pros­e­cu­tors are plan­ning to charge high-lev­el Volk­swa­gen AG exec­u­tives based in Ger­many over the automaker’s emis­sions cheat­ing scan­dal, accord­ing to a per­son famil­iar with the mat­ter, after arrest­ing a man­ag­er in the U.S. for alleged­ly mis­lead­ing reg­u­la­tors.

    A top Volk­swa­gen emis­sions-com­pli­ance exec­u­tive Oliv­er Schmidt, 48, was arrest­ed at Mia­mi Inter­na­tion­al Air­port on Sat­ur­day and charged with con­spir­a­cy to defraud the U.S.

    A court fil­ing against Schmidt lays out what could be a roadmap to charges against high­er-lev­el exec­u­tives. Volkswagen’s senior offi­cials in Wolfs­burg, Ger­many, were told in July 2015 of the exis­tence, pur­pose and char­ac­ter­is­tics of the device that low­ered emis­sions on diesel cars when it detect­ed it was under­go­ing envi­ron­men­tal test­ing, the U.S. alleged, cit­ing infor­ma­tion obtained from three coop­er­a­tors. VW admit­ted its efforts to skirt envi­ron­men­tal stan­dards in Sep­tem­ber 2015.

    “VW employ­ees assured VW exec­u­tive man­age­ment that U.S. reg­u­la­tors were not aware of the defeat device,” accord­ing to the fil­ing in fed­er­al court in Detroit. “Rather than advo­cate for dis­clo­sure of the defeat device to U.S. reg­u­la­tors, VW exec­u­tive man­age­ment autho­rized its con­tin­ued con­ceal­ment.”

    The per­son famil­iar with the inves­ti­ga­tion declined to spec­i­fy when charges against more senior-lev­el exec­u­tives may be filed or whether the exec­u­tives to be charged are still employed by the automak­er. The Jus­tice Depart­ment declined to com­ment on addi­tion­al charges.

    Set­tle­ment Close

    Volk­swa­gen is a near­ing a multi­bil­lion-dol­lar set­tle­ment with the Jus­tice Depart­ment to resolve a crim­i­nal inves­ti­ga­tion into the diesel emis­sions-cheat­ing alle­ga­tions, which could be announced as soon as this week, Bloomberg report­ed Fri­day.

    The gov­ern­ment and Volk­swa­gen have been try­ing to reach a set­tle­ment by Jan. 20 before the Trump admin­is­tra­tion comes into office and replaces the polit­i­cal appointees who have been over­see­ing the diesel-cheat­ing case. VW also faces a crim­i­nal probe and law­suits in Ger­many. The automaker’s shares rose 4.9 per­cent to 145.85 euros in Frank­furt.

    Any crim­i­nal penal­ty from the gov­ern­ment would come on top of a $14.7 bil­lion U.S. civ­il set­tle­ment between dri­vers, reg­u­la­tors and VW that requires the com­pa­ny to fix or buy back about 480,000 of the cars in the U.S. with 2.0‑liter engines cars and pay to pro­mote zero-emis­sions vehi­cles.

    “Volk­swa­gen con­tin­ues to coop­er­ate with the Depart­ment of Jus­tice as we work to resolve remain­ing mat­ters in the Unit­ed States,” the com­pa­ny said in a state­ment. “It would not be appro­pri­ate to com­ment on any ongo­ing inves­ti­ga­tions or to dis­cuss per­son­nel mat­ters.”

    Schmidt is accused of par­tic­i­pat­ing in a con­spir­a­cy to defraud the U.S. gov­ern­ment and Volk­swa­gen cus­tomers and to vio­late the fed­er­al Clean Air Act from 2006 to 2015, accord­ing to court papers. He was sched­uled to make a court appear­ance in Mia­mi lat­er Mon­day.

    Schmidt began work­ing for the automak­er in 1997 and served as gen­er­al man­ag­er in charge of its Envi­ron­men­tal and Engi­neer­ing Office from 2012 to 2015, accord­ing to an affi­davit filed by the Fed­er­al Bureau of Inves­ti­ga­tion. That agency was pri­mar­i­ly respon­si­ble for com­mu­ni­cat­ing and coor­di­nat­ing with U.S. reg­u­la­to­ry agen­cies, accord­ing to pros­e­cu­tors. In March 2015, Schmidt was pro­mot­ed to a more senior man­age­ment posi­tion with­in Volk­swa­gen and returned to the company’s head­quar­ters in Ger­many.

    After learn­ing in April 2014 that West Vir­ginia University’s Cen­ter for Alter­na­tive Fuels, Engines and Emis­sions had found that three VW diesel vehi­cles had emit­ted 40 times the per­mis­si­ble lim­it in the U.S., Schmidt wrote to a col­league: “It should first be decid­ed whether we are hon­est. If we are not hon­est, every­thing stays as it is,” accord­ing to the affi­davit.

    In the same mes­sage, Schmidt not­ed that the Inter­na­tion­al Coun­cil on Clean Trans­porta­tion, an envi­ron­men­tal group, had “stu­pid­ly” pub­lished the WVU find­ings. “Not good,” he said. In the sum­mer 2015, Schmidt took a direct role in VW’s response to ques­tions from U.S. reg­u­la­tors about the emis­sions tests.

    After these emis­sions-test­ing dis­crep­an­cies became known to the U.S. gov­ern­ment, he alleged­ly mis­led fed­er­al reg­u­la­tors about rea­sons for the dif­fer­ing test results. Schmidt offered “rea­sons for the dis­crep­an­cy oth­er than the fact that VW was inten­tion­al­ly cheat­ing on U.S. emis­sions test in order to allow VW to con­tin­ue to sell diesel vehi­cles in the Unit­ed States,” accord­ing to the affi­davit.

    The doc­u­ment lays out how in August 2015, senior Volk­swa­gen man­agers approved a plan for what the automaker’s employ­ees would say in an upcom­ing meet­ing with Cal­i­for­nia reg­u­la­tors. That plan called for Volk­swa­gen employ­ees to con­tin­ue con­ceal­ing the exis­tence of the emis­sions device. How­ev­er, one employ­ee, who is coop­er­at­ing with the inves­ti­ga­tion, ignored those instruc­tions and admit­ted that Volk­swa­gen cheat­ed on U.S. emis­sions tests.

    The gov­ern­ment notes in the crim­i­nal case against Schmidt that the charge against him is based in part on infor­ma­tion from two coop­er­at­ing wit­ness­es who worked in Volkswagen’s engine devel­op­ment depart­ment and also from James Liang, a for­mer VW soft­ware engi­neer who plead­ed guilty to a con­spir­a­cy charge in Sep­tem­ber. The uniden­ti­fied wit­ness­es are help­ing the U.S. in exchange for immu­ni­ty from pros­e­cu­tion, accord­ing to the FBI affi­davit.

    Dozens of Volk­swa­gen offi­cials in Ger­many have hired U.S. crim­i­nal defense lawyers over the past sev­er­al months as the Jus­tice Depart­ment ramped up its inves­ti­ga­tion, Bloomberg report­ed last month. U.S. author­i­ties have trav­eled to Ger­many to arrange inter­views with man­agers and seek coop­er­a­tion.

    U.S. cas­es against against exec­u­tives in Ger­many would face chal­lenges. The U.S. can charge indi­vid­u­als even if Ger­man author­i­ties issue their own indict­ments. But get­ting exec­u­tives to stand tri­al in the U.S. could be dif­fi­cult. Lawyers for some VW man­agers in Ger­many have advised their clients not to leave the coun­try, accord­ing to a per­son famil­iar with the mat­ter.

    The Ger­man con­sti­tu­tion bars extra­di­tion of Ger­man nation­als to for­eign coun­tries oth­er than Euro­pean Union mem­bers states. The law allows it to hand over Ger­mans to inter­na­tion­al tri­bunals like the The Hague-based Inter­na­tion­al Crim­i­nal Court.

    If Ger­man nation­als leave their home coun­try, they could face the fate of Ger­man hedge fund man­ag­er Flo­ri­an Homm, who in 2013 trav­eled from Ger­many to Italy only to be arrest­ed at the Uffizi Gallery in Flo­rence on U.S. charges.

    VW has said top man­age­ment was unaware of the deci­sion to install the soft­ware to cheat emis­sions tests. “The then and cur­rent board of man­age­ment of Volk­swa­gen AG had, at any rate, no knowl­edge of the use of unlaw­ful engine-man­age­ment soft­ware at the time,” Volk­swa­gen wrote in its annu­al report for 2015, a state­ment it has cit­ed in response to sub­se­quent inquiries.

    VW has sus­pend­ed or pushed out about a dozen exec­u­tives in the after­math of the scan­dal includ­ing for­mer Chief Exec­u­tive Offi­cer Mar­tin Win­terko­rn, who has denied any knowl­edge of the cheat­ing.

    ...

    “The doc­u­ment lays out how in August 2015, senior Volk­swa­gen man­agers approved a plan for what the automaker’s employ­ees would say in an upcom­ing meet­ing with Cal­i­for­nia reg­u­la­tors. That plan called for Volk­swa­gen employ­ees to con­tin­ue con­ceal­ing the exis­tence of the emis­sions device. How­ev­er, one employ­ee, who is coop­er­at­ing with the inves­ti­ga­tion, ignored those instruc­tions and admit­ted that Volk­swa­gen cheat­ed on U.S. emis­sions tests.

    Dou­ble uh oh. It sure sounds like US pros­e­cu­tors are clos­ing in on a case that could impli­cate VW’s senior man­age­ment in a con­spir­a­cy to lie to US reg­u­la­tor. And if that pros­e­cu­tion goes through, these exec­u­tives might not be able leave Ger­many for fear of extra­di­tion. That’s the sit­u­a­tion VW is fac­ing and was appar­ent­ly hop­ing to resolve before the Trump team steps into place. At least as of Novem­ber that was what VW was pub­licly hope for. Whether or not they still hold that hope is unclear, but con­sid­er­ing that we’re see­ing actu­al exec­u­tive arrests and plans for exec­u­tive extra­di­tions it seems like there’s a good chance that VW’s new plan is to lob­by for a Trump exec­u­tive bailout.

    So that’s going to be some­thing to watch for going for­ward. What will Attor­ney Gen­er­al Ses­sions do? Will he stick to his pre­vi­ous calls to charge major com­pa­nies with crim­i­nal con­duct after US pros­e­cu­tors hand him a pile of evi­dence? Or does VW get an exec­u­tive bailout? VW’s behav­ior is exact­ly the kind of cor­rupt behav­ior that prompt­ed the “Drain the Swamp” theme that drove much of Trump’s cam­paign so it seems like it would be a no-brain­er for Trump’s admin­is­tra­tion to not just pur­sue these charges but go even fur­ther. Of course, that was then, and this is now, so things are prob­a­bly look­ing up for VW on Jan­u­ary 20th. At least for the exec­u­tives.

    Posted by Pterrafractyl | January 9, 2017, 3:51 pm
  13. Here’s the lat­est ‘uh oh’ for VW: The arrest of VW exec­u­tive Oliv­er Schmidt last week in Flori­da was just fol­lowed up with crim­i­nal charges against five more exec­u­tives in Ger­many:

    The New York Times

    U.S. Charges 6 Volk­swa­gen Exec­u­tives in Emis­sions-Cheat­ing Case

    By HIROKO TABUCHI, JACK EWING and MATT APUZZO
    JAN. 11, 2017

    WASHINGTON — Fed­er­al pros­e­cu­tors announced crim­i­nal charges on Wednes­day against six Volk­swa­gen exec­u­tives for their roles in the company’s emis­sions-cheat­ing scan­dal, a sub­stan­tial turn by a depart­ing admin­is­tra­tion that is try­ing to remake its image of being soft on cor­po­rate crime.

    The six exec­u­tives include a for­mer head of devel­op­ment of the Volk­swa­gen brand and the head of engine devel­op­ment. One of those charged on Wednes­day, Oliv­er Schmidt, was arrest­ed in Flori­da last week; the oth­er five are believed to be in Ger­many.

    Volk­swa­gen also for­mal­ly plead­ed guilty to charges of con­spir­a­cy to com­mit wire fraud and to vio­late the Clean Air Act, cus­toms vio­la­tions and obstruc­tion of jus­tice. Many of the 600,000 cars in the Unit­ed States equipped with emis­sions-cheat­ing soft­ware were import­ed from Ger­many or Mex­i­co.

    The automak­er is set to pay $4.3 bil­lion in crim­i­nal and civ­il penal­ties in con­nec­tion with the fed­er­al inves­ti­ga­tion, bring­ing the total cost of the decep­tion to Volk­swa­gen in the Unit­ed States, includ­ing set­tle­ments of suits by car own­ers, to $20 bil­lion — one of the costli­est cor­po­rate scan­dals in his­to­ry.

    “When reg­u­la­tors expressed con­cerns, Volk­swa­gen obfus­cat­ed,” Attor­ney Gen­er­al Loret­ta E. Lynch said at a news con­fer­ence in Wash­ing­ton. “And they ulti­mate­ly lied.”

    Extract­ing a guilty plea from a major cor­po­ra­tion is a notable feat for an admin­is­tra­tion that has been accused of allow­ing com­pa­nies to buy them­selves out of indict­ments through so-called deferred pros­e­cu­tion deals.

    But the charges against the Volk­swa­gen exec­u­tives are just as strik­ing and show that pros­e­cu­tors are deter­mined to hold the company’s high­est ranks to account.

    The Volk­swa­gen case is the first major test of a Jus­tice Depart­ment com­mit­ment to hold exec­u­tives more account­able. In 2015, Deputy Attor­ney Gen­er­al Sal­ly Q. Yates issued new poli­cies that pri­or­i­tized the pros­e­cu­tion of indi­vid­u­als at cor­po­ra­tions accused of wrong­do­ing. The poli­cies were a response to crit­i­cism that the depart­ment had been too soft on Wall Street exec­u­tives after the finan­cial cri­sis.

    ...

    The five Volk­swa­gen employ­ees charged on Wednes­day were Heinz-Jakob Neuss­er, 56, who over­saw devel­op­ment of the company’s brand; Jens Hadler, 50, who over­saw engine devel­op­ment; Richard Dorenkamp, 68, anoth­er super­vi­sor of engine devel­op­ment; Bernd Got­tweis, 69, who helped over­see qual­i­ty man­age­ment; and Jür­gen Peter, 59, who was a liai­son between reg­u­la­to­ry agen­cies and the car­mak­er.

    They and Mr. Schmidt were charged with con­spir­a­cy to defraud the Unit­ed States, defraud cus­tomers and vio­late the Clean Air Act.

    It was unclear whether the five exec­u­tives named on Wednes­day would ever appear in a Unit­ed States court. If they are in Ger­many, the coun­try does not nor­mal­ly extra­dite its cit­i­zens.

    Even if Ger­many does not extra­dite or pros­e­cute them, the charges in the Unit­ed States would severe­ly lim­it their abil­i­ty to trav­el. The case could also set up a diplo­mat­ic tus­sle between Ger­many and the admin­is­tra­tion of Pres­i­dent-elect Don­ald J. Trump, though Mr. Trump’s stance on the case is far from clear.

    Ms. Lynch said she could not spec­u­late on whether Ger­many would hand over the five charged. Still, she said: “We’ve always worked very well with our Ger­man col­leagues.”

    Reg­u­la­tors in the Unit­ed States first began to inves­ti­gat­ing Volk­swa­gen ear­ly in 2014 after a study by West Vir­ginia Uni­ver­si­ty showed that its diesel cars pol­lut­ed far more on the road than dur­ing offi­cial emis­sions tests.

    Com­pa­ny exec­u­tives knew that the cars were pro­grammed to rec­og­nize when they were being test­ed and to deliv­er opti­mum pol­lu­tion read­ings, accord­ing to inves­ti­ga­tors. But rather than admit wrong­do­ing, Volk­swa­gen rep­re­sen­ta­tives pro­vid­ed false and mis­lead­ing infor­ma­tion for more than a year to the Cal­i­for­nia Air Resources Board and the E.P.A.

    Mr. Schmidt arrest­ed on Sat­ur­day at Mia­mi Inter­na­tion­al Air­port as he was about to board a flight to Ger­many. In Sep­tem­ber, a for­mer Volk­swa­gen engi­neer who worked for the com­pa­ny in Cal­i­for­nia, James Liang, plead­ed guilty to charges that includ­ed con­spir­a­cy to defraud the fed­er­al gov­ern­ment and vio­lat­ing the Clean Air Act.

    None of the exec­u­tives charged on Wednes­day were mem­bers of the Volk­swa­gen man­age­ment board, although sev­er­al of them report­ed direct­ly to the board. The lack of accu­sa­tions against any top man­agers could help insu­late Volk­swa­gen from law­suits by share­hold­ers who have accused the com­pa­ny of fail­ing to dis­close the risks it faced.

    Sev­er­al of those charged on Wednes­day played man­age­ment roles in the devel­op­ment of the diesel engines that were equipped with so-called defeat devices — soft­ware intend­ed to mask excess emis­sions by crank­ing up pol­lu­tion con­trols when­ev­er a car was being test­ed on rollers in a lab.

    Sev­er­al oth­ers have been accused of con­coct­ing excus­es for the excess emis­sions and try­ing to pre­vent reg­u­la­tors from dis­cov­er­ing the truth. Volk­swa­gen also admit­ted that its employ­ees destroyed emails and oth­er evi­dence in 2015 as it became clear that reg­u­la­tors would soon learn of the ille­gal soft­ware.

    The Volk­swa­gen case is the first major test of a Jus­tice Depart­ment com­mit­ment to hold exec­u­tives more account­able. In 2015, Deputy Attor­ney Gen­er­al Sal­ly Q. Yates issued new poli­cies that pri­or­i­tized the pros­e­cu­tion of indi­vid­u­als at cor­po­ra­tions accused of wrong­do­ing. The poli­cies were a response to crit­i­cism that the depart­ment had been too soft on Wall Street exec­u­tives after the finan­cial cri­sis.”

    Yep, adding to the stakes of this pros­e­cu­tion is the fact that this the first major test of a 2015 Jus­tice Depart­ment com­mit­ment to actu­al­ly hold exec­u­tive account­able. Bet­ter late than nev­er! Seri­ous­ly. Way bet­ter late than nev­er. At least there’s hope.

    Although note how this first test is still going to rely on the Trump admin­is­tra­tion to com­plete it, so this test is about to face quite a test:

    ...
    It was unclear whether the five exec­u­tives named on Wednes­day would ever appear in a Unit­ed States court. If they are in Ger­many, the coun­try does not nor­mal­ly extra­dite its cit­i­zens.

    Even if Ger­many does not extra­dite or pros­e­cute them, the charges in the Unit­ed States would severe­ly lim­it their abil­i­ty to trav­el. The case could also set up a diplo­mat­ic tus­sle between Ger­many and the admin­is­tra­tion of Pres­i­dent-elect Don­ald J. Trump, though Mr. Trump’s stance on the case is far from clear.

    Ms. Lynch said she could not spec­u­late on whether Ger­many would hand over the five charged. Still, she said: “We’ve always worked very well with our Ger­man col­leagues.”
    ...

    That’s going to send quite a sig­nal to the rest of the cor­po­rate world if Trump’s DOJ backs off in pros­e­cut­ing these guys which why it’s this VW scan­dal is turn­ing about to be a much, much big­ger deal. On the oth­er hand, since none of the exec­u­tives charged were on the man­age­ment board there’s plen­ty of room for the Trump admin­is­tra­tion to turn this into an exam­ple of how he’ll crack down of cor­po­rate cor­rup­tion. Is the Trump admin­is­tra­tion’s cor­rup­tion going to be large­ly Trump-cen­tric or is he going to unleash a cor­po­rate malfea­sance free-for-all?
    Sure, any­one with a brain can rea­son­ably assume that Trump is going to unleash a cor­po­rate free-for-all, but this is the kind of case that will send a con­fir­ma­to­ry sig­nal to the cor­po­rate world. That’s the pol­i­tics and real-world eco­nom­ics that is now inter­twined with this case. It’s the Jus­tice Canary in the Trumpian Coal Mine.

    So let’s hope this new Jus­tice Depart­ment com­mit­ment to hold exec­u­tives account­able is actu­al­ly a DOJ com­mit­ment and not just an Oba­ma DOJ com­mit­ment. Of course, that’s going to be up to Trump’s Jus­tice Depart­ment going for­ward which, in turn, is going to depend quite a bit on Don­ald Trump’s gen­er­al atti­tude regard­ing the impor­tance of cor­po­rate ethics and pros­e­cut­ing exec­u­tives which is why today’s ‘uh oh’ for VW’s exec­u­tives to become eas­i­ly an ‘uh oh’ for the Amer­i­can pub­lic if Team Trump goes easy on them.

    So we’ll see what hap­pens, although it’s not look­ing so good for that canary.

    Posted by Pterrafractyl | January 11, 2017, 3:55 pm
  14. Here’s an update on VW’s ‘diesel­gate’. And as far as updates go it’s a pret­ty mas­sive update: VW, BMW, Daim­ler, Audi and Porsche are all charged with col­lud­ing with each oth­er on tech­nol­o­gy, com­po­nents, and sup­pli­er, in par­tic­u­lar the tech­ni­cal details of diesel exhaust treat­ment sys­tems, going back to the 90’s:

    Finan­cial Times

    Ger­man car indus­try faces being hit with big fines
    Tar­nished auto sec­tor on the line as groups con­front accu­sa­tions of car­tel-like behav­iour

    by: Guy Chaz­an in Berlin, Patrick McGee in Frank­furt and Jim Bruns­den in Brus­sels
    July 24, 2017 11:17 am

    The alle­ga­tions of col­lu­sion among Ger­man car­mak­ers have plunged an indus­try already tar­nished by the Volk­swa­gen diesel scan­dal into a fresh cri­sis. The news mag­a­zine Der Spiegel report­ed on Fri­day that Ger­man automak­ers — VW, BMW, Daim­ler, Audi and Porsche — had been engag­ing in car­tel-like behav­iour since the 1990s, in par­tic­u­lar col­lud­ing with each oth­er on the tech­ni­cal details of diesel exhaust treat­ment sys­tems. The EU com­pe­ti­tion author­i­ties have opened an inves­ti­ga­tion, and Germany’s eco­nom­ics min­is­ter says the cred­i­bil­i­ty of the whole Ger­man car indus­try is at stake. FT reporters con­sid­er the main points.

    What are the Ger­man car­mak­ers accused of?

    BMW, Daim­ler and the Volk­swa­gen Group are accused of hold­ing secret meet­ings since the 1990s to col­lude on tech­nol­o­gy, com­po­nents and sup­pli­ers. The most sig­nif­i­cant alle­ga­tion is that they agreed to use only small tanks for AdBlue, a urea solu­tion crit­i­cal for neu­tral­is­ing emis­sions from diesel engines. But so far there is no evi­dence they col­lud­ed on prices of end prod­ucts.

    How have the car­mak­ers respond­ed to the alle­ga­tions?

    VW and Daim­ler have refused to com­ment, while BMW adamant­ly denies that it col­lud­ed with its rivals. How­ev­er, BMW said on Fri­day there was noth­ing unusu­al in work­ing with oth­er car­mak­ers on cer­tain com­po­nents if they “do not con­tribute to dif­fer­en­ti­a­tion of the two brands and are there­fore not rel­e­vant to com­pe­ti­tion”.

    The EU has con­firmed it is inves­ti­gat­ing the alle­ga­tions — but how like­ly is it that they will real­ly crack down on Ger­man indus­try?

    Ger­many exer­cis­es huge pow­er in the EU and can eas­i­ly influ­ence the Euro­pean Com­mis­sion agen­da. But the com­pe­ti­tion direc­torate has a rep­u­ta­tion for fierce inde­pen­dence — one that under its cur­rent boss, Mar­grethe Vestager, has only grown. She has tak­en on a pha­lanx of cor­po­rate titans, rang­ing from Apple and Google, to Gazprom, Ama­zon and McDonald’s, and is expect­ed to be just as tough in her approach to the Ger­man car­mak­ers. “Know­ing her, I bet she would have the guts [to go after them],” says Philippe Lam­berts, a Green MEP. It would also be an oppor­tu­ni­ty for her to show “she is not just after big US com­pa­nies, but also Euro­pean cham­pi­ons [that break the rules].”

    Are there prece­dents for EU action against Ger­man com­pa­nies?

    Yes. Sven Giegold, a Ger­man Green MEP, notes how tough the EU com­pe­ti­tion author­i­ties were when it came to restruc­tur­ing the four Ger­man Lan­des­banken — pub­lic sec­tor banks with a region­al focus — that got into trou­ble dur­ing the finan­cial cri­sis. The direc­torate also act­ed against Ger­man util­i­ty Eon in the late 2000s over con­cerns it was abus­ing its dom­i­nant mar­ket posi­tion: in a set­tle­ment with Brus­sels, it was forced to sell its long-dis­tance grid and a big chunk of its domes­tic gen­er­at­ing capac­i­ty. And so much more is rid­ing on the car­mak­er car­tel issue. “This is a test case for the rule of law,” Mr Giegold says.

    What kind of fines could the car­mak­ers face?

    EU car­tel fines are deter­mined by (i) the annu­al rev­enue of the prod­uct in ques­tion; (ii) the dura­tion of the infringe­ment; and (iii) the grav­i­ty of the offence. There is a max­i­mum cap of 10 per cent of glob­al rev­enues — equiv­a­lent to €8bn for BMW, €14bn for Daim­ler and €19bn for Volk­swa­gen, accord­ing to ana­lysts at Exane BNP Paribas. Lenien­cy is a big fac­tor. Some com­pa­nies have escaped a fine by self-report­ing. A sim­i­lar approach could reduce any fines for the Ger­man car­mak­ers. Spiegel report­ed that VW and Daim­ler had self-report­ed them­selves in this case. This has been con­firmed by VW, while Daim­ler has declined to com­ment.

    What do auto indus­try experts say about the claims?

    Details are scant, so ana­lysts are hav­ing a hard time quan­ti­fy­ing the risks. Stu­art Pear­son, at BNP Exane Paribas, said it was “dif­fi­cult to sep­a­rate what is nor­mal indus­try co-oper­a­tion and co-devel­op­ment, and what went beyond this nor­mal prac­tice and crossed the grey line into the realms of anti-com­pet­i­tive behav­iour”.

    ...

    What does this mean for the use of diesel engines?

    The alle­ga­tions come at “the worst pos­si­ble time for the car­mak­ers,” says Ste­fan Bratzel of the Cen­ter of Auto­mo­tive Man­age­ment. Already, diesel tech­nol­o­gy is in trou­ble: there were the rev­e­la­tions that VW had installed soft­ware in its diesel cars to cheat emis­sions tests, and then came the announce­ments by some Euro­pean cities such as Paris and Madrid that they were con­sid­er­ing ban­ning diesel cars, because of their NOx emis­sions: Lon­don is also to impose an extra con­ges­tion charge on diesel vehi­cles from this autumn. This is affect­ing sales: over­all, diesel account­ed for 47.2 per cent of sales in Europe’s biggest coun­tries last quar­ter, down from 51.6 per cent a year ago.

    ———-

    “Ger­man car indus­try faces being hit with big fines” by Guy Chaz­an, Patrick McGee and Jim Bruns­den; Finan­cial Times; 07/24/2017

    BMW, Daim­ler and the Volk­swa­gen Group are accused of hold­ing secret meet­ings since the 1990s to col­lude on tech­nol­o­gy, com­po­nents and sup­pli­ers. The most sig­nif­i­cant alle­ga­tion is that they agreed to use only small tanks for AdBlue, a urea solu­tion crit­i­cal for neu­tral­is­ing emis­sions from diesel engines. But so far there is no evi­dence they col­lud­ed on prices of end prod­ucts.”

    Keep in mind that one of the key ‘fea­tures’ of VW’s emis­sions-cheat­ing ‘clean diesel’ cars was an “advance” in the tech­nol­o­gy that elim­i­nat­ed the need for these urea solu­tion tanks in some small­er mod­els (but in real­i­ty just emit­ted more NOx and hid it by cheat­ing the tests). And after every­thing we’ve learned about the diesel­gate thus far and now wide­spread it was beyond VW, it’s not hard to imag­ine indus­try col­lu­sion on the cheat­ing tech­nol­o­gy that Ger­man indus­try was pio­neer­ing. A tech­nol­o­gy pro­cure­ment car­tel is poten­tial­ly a great tool for imple­ment­ing a long-stand­ing cov­er-up for some­thing like emis­sions-cheat­ing. After all, it’s a lot less risky to ped­dle spe­cial “advanced”(cheating) clean diesel tech­nol­o­gy when all your com­peti­tors are sell­ing sim­i­lar­ly “advanced” tech­nol­o­gy. For instance, if one man­u­fac­tur­er was hon­est­ly sell­ing “clean diesel” cars that all required a large urea solu­tion tank, but all the rest of the cheater com­pa­nies had small tanks, that could raise some eye­brows.

    And don’t for­get that BMW, Mer­cedes, Audi, Porsche, and whole lot of non-Ger­man com­pa­nies too have all been fac­ing charges of diesel emis­sion cheat­ing, so it makes sense that they might all have been engaged in car­tel-like behav­ior in part to obscure that cheat­ing by lock­ing every­one into the same cheat­ing tech­nol­o­gy.

    So, yeah, diesel­gate is about to emit a lot more scan­dal. *cough* *gag*

    Posted by Pterrafractyl | July 24, 2017, 12:57 pm
  15. Well, this prob­a­bly isn’t going help the Ger­man auto indus­try’s ‘Diesel­gate’ woes: It turns out VW, BMW, and Daim­ler paid for their own junk sci­ence out­fit ded­i­cat­ed to pro­duc­ing research that demon­strat­ed that their ‘clean diesel’ tech­nol­o­gy did­n’t pose a asth­ma, heart attack or can­cer threat, three big known risks of tra­di­tion­al diesel exhaust. The research insti­tute, the Euro­pean Research Group on Envi­ron­ment and Health in the Trans­port Sec­tor (EUGT), was set up in 2007 just as VW was plan­ning on sell­ing its clean diesel tech­nol­goy in the US, which had more strin­gent clean air rules than the EU. So how did the EUGT go about prov­ing that this ‘clean diesel’ tech­nol­o­gy was actu­al­ly clean? By expos­ing a group of 10 mon­keys to the exhaust fumes, and then lat­er expos­ing 19 men and 6 women to the fumes. For­tu­nate­ly for these test sub­jects the stud­ies were con­duct­ed on the rigged vehi­cles that were in ‘test mode’ and thus pro­duc­ing far less exhaust than these vehi­cle nor­mal­ly emit:

    BBC

    Ger­man shock at car exhaust tests on humans and mon­keys

    01/29/2018

    The Ger­man gov­ern­ment has denounced exper­i­ments fund­ed by Ger­man car­mak­ers in which humans and mon­keys report­ed­ly inhaled diesel exhaust fumes.

    Ger­man media say the health impact research was done by EUGT, a body fund­ed by Volk­swa­gen, Daim­ler and BMW.

    Such tests could not be jus­ti­fied, the gov­ern­ment said, demand­ing details. A min­is­ter called them “abom­inable”.

    ...

    EUGT was dis­solved by the car­mak­ers last year. The ini­tials stand for Euro­pean Research Group on Envi­ron­ment and Health in the Trans­port Sec­tor.

    “These tests on mon­keys or even humans can­not be jus­ti­fied eth­i­cal­ly in any way,” said Chan­cel­lor Angela Merkel’s spokesman, Stef­fen Seib­ert.

    Envi­ron­ment Min­is­ter Bar­bara Hen­dricks called the exper­i­ments “abom­inable” and expressed shock that sci­en­tists had agreed to con­duct them.

    Social Demo­c­rat politi­cian Stephan Weil — a VW super­vi­so­ry board mem­ber — called them “absurd and abhor­rent”. “Lob­by­ing can be no excuse what­so­ev­er for such test­ing,” he said.

    What do we know about the tests?

    On Thurs­day the New York Times report­ed that the EUGT research was designed to counter a 2012 deci­sion by the World Health Orga­ni­za­tion to clas­si­fy diesel exhaust as a car­cino­gen.

    It said that in 2014, EUGT had exposed 10 mon­keys to fumes — in an air-tight cham­ber — from sev­er­al cars, includ­ing a diesel VW Bee­tle. The test­ing took place at a lab in Albu­querque, New Mex­i­co.

    Then at the week­end Ger­many’s Stuttgarter Zeitung and SWR radio report­ed that 19 men and six women had inhaled diesel fumes in anoth­er EUGT exper­i­ment.

    Dur­ing a month of tests at a lab in Aachen, west Ger­many, they were exposed to var­i­ous con­cen­tra­tions of diesel fumes, which con­tain tox­ic nitro­gen oxides (NOx). The BBC has not seen the study itself, but Ger­man media say it was pub­lished in 2016.

    At the time the car­mak­ers were argu­ing that mod­ern tech­nol­o­gy had cut pol­lu­tion from diesel engines to safe lev­els. But VW was lat­er found to have fit­ted “cheat” devices that rigged the emis­sions data.

    What have the car­mak­ers said about this?

    Daim­ler, man­u­fac­tur­er of Mer­cedes-Benz cars, said on Sun­day “we are appalled by the extent of the [EUGT] stud­ies and their imple­men­ta­tion”. “We con­demn the exper­i­ments in the strongest terms.”

    React­ing to the NYT report about the mon­key exper­i­ments, VW tweet­ed on Sat­ur­day that it “explic­it­ly dis­tances itself clear­ly from all forms of ani­mal abuse”..

    “We know that the sci­en­tif­ic meth­ods used by EUGT were wrong and apol­o­gise sin­cere­ly for this.”

    VW’s super­vi­so­ry board says it will con­duct a full inves­ti­ga­tion, call­ing the exper­i­ments “utter­ly incom­pre­hen­si­ble”.

    What is the lat­est on diesel pol­lu­tion?

    A new study by a Ger­man car spe­cial­ist, Fer­di­nand Duden­höf­fer, says lev­els of pol­lu­tion from diesel cars are still too high in 10 Ger­man cities, so the vehi­cles are like­ly to be banned from the pol­lu­tion hotspots unless engines are upgrad­ed.

    Accord­ing to his research, vehi­cle soft­ware upgrades would not be enough to address the prob­lem. Munich, Stuttgart, Ham­burg, Düs­sel­dorf and Cologne are among the cities with seri­ous pol­lu­tion hotspots.

    ———-

    “Ger­man shock at car exhaust tests on humans and mon­keys”; BBC; 01/29/2018

    “On Thurs­day the New York Times report­ed that the EUGT research was designed to counter a 2012 deci­sion by the World Health Orga­ni­za­tion to clas­si­fy diesel exhaust as a car­cino­gen.”

    So the World Health Orga­ni­za­tion declares diesel exhaust as a car­cino­gen in 2012, prompt­ing the 2014 EUGT stud­ies on mon­keys and humans. Stud­ies that would have been a lot more uneth­i­cal, in terms of pre­sent­ing a dan­ger to the study sub­jects, had VW not been uneth­i­cal­ly using rigged cars that dra­mat­i­cal­ly low­ered their diesel exhaust emis­sions from real-world con­di­tions:

    ...
    It said that in 2014, EUGT had exposed 10 mon­keys to fumes — in an air-tight cham­ber — from sev­er­al cars, includ­ing a diesel VW Bee­tle. The test­ing took place at a lab in Albu­querque, New Mex­i­co.

    Then at the week­end Ger­many’s Stuttgarter Zeitung and SWR radio report­ed that 19 men and six women had inhaled diesel fumes in anoth­er EUGT exper­i­ment.

    Dur­ing a month of tests at a lab in Aachen, west Ger­many, they were exposed to var­i­ous con­cen­tra­tions of diesel fumes, which con­tain tox­ic nitro­gen oxides (NOx). The BBC has not seen the study itself, but Ger­man media say it was pub­lished in 2016.

    At the time the car­mak­ers were argu­ing that mod­ern tech­nol­o­gy had cut pol­lu­tion from diesel engines to safe lev­els. But VW was lat­er found to have fit­ted “cheat” devices that rigged the emis­sions data.
    ...

    So we have an indus­try-fund­ed junk sci­ence orga­ni­za­tion, the EUGT, run­ning fraud­u­lent exper­i­ments on mon­keys and humans back in 2014 in order to ‘prove’ that this clean diesel tech­nol­o­gy was safe. And as the fol­low­er New York Times report on this point outs, those 2014 stud­ies were just some of the ‘research’ get­ting pushed out by the EUGT over its decade of oper­a­tion:

    The New York Times

    10 Mon­keys and a Bee­tle: Inside VW’s Cam­paign for ‘Clean Diesel’

    By JACK EWING
    JAN. 25, 2018

    FRANKFURT — In 2014, as evi­dence mount­ed about the harm­ful effects of diesel exhaust on human health, sci­en­tists in an Albu­querque lab­o­ra­to­ry con­duct­ed an unusu­al exper­i­ment: Ten mon­keys squat­ted in air­tight cham­bers, watch­ing car­toons for enter­tain­ment as they inhaled fumes from a diesel Volk­swa­gen Bee­tle.

    Ger­man automak­ers had financed the exper­i­ment in an attempt to prove that diesel vehi­cles with the lat­est tech­nol­o­gy were clean­er than the smoky mod­els of old. But the Amer­i­can sci­en­tists con­duct­ing the test were unaware of one crit­i­cal fact: The Bee­tle pro­vid­ed by Volk­swa­gen had been rigged to pro­duce pol­lu­tion lev­els that were far less harm­ful in the lab than they were on the road.

    The results were being delib­er­ate­ly manip­u­lat­ed.

    The Albu­querque mon­key research, which has not been pre­vi­ous­ly report­ed, is a new dimen­sion in a glob­al emis­sions scan­dal that has already forced Volk­swa­gen to plead guilty to fed­er­al fraud and con­spir­a­cy charges in the Unit­ed States and to pay more than $26 bil­lion in fines.

    The com­pa­ny admit­ted to installing soft­ware in vehi­cles that enabled them to cheat on emis­sions test. But legal pro­ceed­ings and gov­ern­ment records show that Volk­swa­gen and oth­er Euro­pean automak­ers were also engaged in a pro­longed, well-financed effort to pro­duce aca­d­e­m­ic research that they hoped would influ­ence polit­i­cal debate and pre­serve tax priv­i­leges for diesel fuel.

    The details of the Albu­querque exper­i­ment have been dis­closed in a law­suit brought against Volk­swa­gen in the Unit­ed States, offer­ing a rare win­dow into the world of indus­try-backed aca­d­e­m­ic research. The orga­ni­za­tion that com­mis­sioned the study, the Euro­pean Research Group on Envi­ron­ment and Health in the Trans­port Sec­tor, received all of its fund­ing from Volk­swa­gen, Daim­ler and BMW. It shut down last year amid con­tro­ver­sy over its work.

    The orga­ni­za­tion, known by its Ger­man ini­tials, E.U.G.T., did not do any research itself. Rather, it hired sci­en­tists to con­duct stud­ies that might defend the use of diesel. It spon­sored research that chal­lenged a 2012 deci­sion by the World Health Orga­ni­za­tion to clas­si­fy diesel exhaust as a car­cino­gen. It financed stud­ies that cast doubt on whether ban­ning old­er diesel vehi­cles from cities reduced pol­lu­tion. It pro­duced a skep­ti­cal assess­ment of data show­ing that diesel pol­lu­tion far exceed­ed per­mit­ted lev­els in cities like Barcelona, Spain.

    Indus­tries like food, chem­i­cals and phar­ma­ceu­ti­cals have a long his­to­ry of sup­port­ing research that advances their polit­i­cal agen­das. But the automak­ers’ group con­sis­tent­ly pro­mot­ed the industry’s claim that diesel was envi­ron­men­tal­ly friend­ly — a claim now under­cut by the Volk­swa­gen scan­dal.

    Mar­garet Dou­glas, the chair­woman of a pan­el that advis­es the Scot­tish pub­lic health sys­tem on pol­lu­tion issues, com­pared the automak­ers’ behav­ior to the tobac­co indus­try. Just as the tobac­co com­pa­nies pro­mot­ed nico­tine addic­tion, Ms. Dou­glas said, the car­mak­ers lob­bied for tax breaks that made Euro­pean dri­vers depen­dent on diesel.

    “There are a lot of par­al­lels between the indus­tries in the way they try to down­play the harm and encour­age peo­ple to become addict­ed,” Ms. Dou­glas said.

    Volk­swa­gen, Daim­ler and BMW said the research group did legit­i­mate sci­en­tif­ic work. “All of the research work com­mis­sioned with the E.U.G.T. was accom­pa­nied and reviewed by a research advi­so­ry com­mit­tee con­sist­ing of sci­en­tists from renowned uni­ver­si­ties and research insti­tutes,” Daim­ler said in a state­ment.

    Daim­ler and BMW said they were unaware that the Volk­swa­gen used in the Albu­querque mon­key tests had been set up to pro­duce false data. Volk­swa­gen said in a state­ment that the researchers had nev­er man­aged to pub­lish a com­plete study.

    It wasn’t for lack of try­ing.

    Doc­u­ments pro­duced in legal pro­ceed­ings show that in August 2016 Michael Spallek, the direc­tor of the automak­ers’ research group, emailed the Lovelace Res­pi­ra­to­ry Research Insti­tute, the Albu­querque orga­ni­za­tion that con­duct­ed the tests with mon­keys. “The E.U.G.T. point of view is that it’s time to try to final­ize the report and to present or dis­cuss the prob­lems of the study in a sci­en­tif­ic way ASAP,” Mr. Spallek wrote.

    That was almost a year after Volk­swa­gen admit­ted to equip­ping mil­lions of diesel vehi­cles sold in the Unit­ed States and Europe with ille­gal “defeat devices” that cranked up pol­lu­tion con­trols when soft­ware detect­ed that test­ing was being done in a lab. At oth­er times, the con­trols were turned off, allow­ing the cars to pro­duce more nitro­gen oxides than a long-haul truck.

    Mr. Spallek declined to com­ment, say­ing his con­tract pro­hib­it­ed him from dis­cussing the research group’s work.

    In the 1990s, car­mak­ers used their polit­i­cal clout to per­suade Euro­pean lead­ers that diesel helped fight cli­mate change because it burns more effi­cient­ly than gaso­line. As a result, almost all Euro­pean coun­tries now tax diesel at a low­er rate than gaso­line, mak­ing it cheap­er at the pump.

    The car­mak­ers main­tained that mod­ern tech­nol­o­gy had solved diesel’s big down­side: emis­sions of nitro­gen oxides and fine soot par­ti­cles that can con­tribute to asth­ma, heart attacks and can­cer.

    David King, a for­mer chief sci­en­tif­ic advis­er to the British gov­ern­ment, recalled being tak­en to a lab in the ear­ly 2000s where 10 diesel vehi­cles were run­ning on rollers. The air was so clean that Mr. King, an asth­mat­ic, could breathe freely.

    What Mr. King did not know is that most Euro­pean automak­ers had built their diesel cars to pass lab­o­ra­to­ry emis­sions tests and no more. On the road, accord­ing to recent stud­ies by the gov­ern­ments of Britain, France and Ger­many, diesel cars by almost all Euro­pean man­u­fac­tur­ers spewed tox­ic gas­es in quan­ti­ties far above those allowed by law.

    ...

    The toll on pub­lic health has become impos­si­ble to ignore. In 2012, 72,000 peo­ple in Europe died pre­ma­ture­ly because of nitro­gen diox­ide pol­lu­tion, which comes pri­mar­i­ly from diesel vehi­cles, accord­ing to a report released last year by a com­mit­tee of the Euro­pean Par­lia­ment.

    Research spon­sored by indus­try “all has the same fun­da­men­tal aim,” said Joachim Hein­rich, an envi­ron­men­tal health expert at the Uni­ver­si­ty of Munich who has spent his career study­ing the effects of air pol­lu­tion, “name­ly to weak­en or dis­cred­it reg­u­la­tion — to say ‘the evi­dence is not that clear,’ ‘we shouldn’t take it so seri­ous­ly,’ ‘we need to think more about it.’”

    The automak­ers’ research group was cre­at­ed in 2007, as Volk­swa­gen was ready­ing a major push to mar­ket diesel tech­nol­o­gy in the Unit­ed States, which has stricter lim­its on nitro­gen oxide emis­sions than Europe. Mr. Spallek, the exec­u­tive direc­tor, had been the chief med­ical offi­cer of Volkswagen’s com­mer­cial vehi­cles divi­sion.

    The neg­a­tive health effects of diesel were start­ing to attract more atten­tion. Zones where diesel was restrict­ed were pro­lif­er­at­ing in Europe, pos­ing a threat to automak­ers because the areas dis­cour­age sales of diesels.

    In response, the research group financed two stud­ies that con­clud­ed that low-emis­sions zones had only a mar­gin­al effect on pol­lu­tion lev­els. But the stud­ies used dubi­ous method­ol­o­gy, the Ger­man Fed­er­al Envi­ron­ment Agency said in a report released last year.

    The indus­try group’s stud­ies on low emis­sions zones were influ­en­tial, how­ev­er. They were cit­ed in reports by the Orga­ni­za­tion for Eco­nom­ic Coop­er­a­tion and Devel­op­ment, and by the Nation­al Insti­tute for Health and Care Excel­lence, a pub­lic body in Britain that pro­vides guid­ance on health care.

    Else­where, a region­al court in Aus­tria cit­ed the research in a 2014 rul­ing against res­i­dents of Graz who had sued to force offi­cials to restrict diesel traf­fic. The deci­sion, by the State Admin­is­tra­tive Court for the province of Styr­ia, called the study “thor­ough” and said it showed that the effect of low-emis­sions zones on fine soot pol­lu­tion was “less than expect­ed.” The deci­sion did not men­tion that the study had been financed by the auto indus­try.

    Offi­cials at the research group also sought to influ­ence pub­lic debate. In 2016, Hel­mut Greim, the chair­man of the group’s research advi­so­ry board, tes­ti­fied before the Ger­man Par­lia­ment that it was impos­si­ble to estab­lish a direct link between nitro­gen diox­ide pol­lu­tion and lung ail­ments. Mr. Greim is a long­time bête noire for envi­ron­men­tal activists, who say he con­sis­tent­ly takes the indus­try point of view.

    Mr. Greim, 82, said in an inter­view that the group’s research was inde­pen­dent and pub­lished only in peer-reviewed jour­nals. Dur­ing an inter­view in Munich, he said that fear of nitro­gen diox­ide pol­lu­tion was “com­plete­ly overblown.”

    The research group intend­ed the Albu­querque exper­i­ment to be a rebut­tal to a 2012 find­ing by a divi­sion of the World Health Orga­ni­za­tion that had clas­si­fied diesel exhaust as a car­cino­gen.

    The automak­ers’ research group set out to show that new diesel vehi­cles were bet­ter. It hired the Lovelace Res­pi­ra­to­ry Research Insti­tute, an estab­lished research cen­ter that has also done work for the Envi­ron­men­tal Pro­tec­tion Agency, to con­duct a study that would com­pare emis­sions from a late-mod­el Volk­swa­gen with those of a 1999 Ford diesel pick­up.

    The tests were con­duct­ed in 2014 using 10 cynomol­gus macaque mon­keys, a breed used exten­sive­ly in med­ical exper­i­ments, accord­ing to the legal records.

    Volk­swa­gen took a lead role in the study. Com­pa­ny engi­neers super­vised the instal­la­tion of a tread­mill that would allow the vehi­cles to run on rollers while equip­ment sucked exhaust from the tailpipes.

    The gas was then dilut­ed and fed into cham­bers con­tain­ing the mon­keys. To keep the ani­mals calm dur­ing the four hours they breathed fumes, lab work­ers set up a tele­vi­sion show­ing car­toons.

    “They like to watch car­toons,” Jake McDon­ald, the Lovelace sci­en­tist who over­saw the exper­i­ments, said in a sworn depo­si­tion tak­en last year as part of a law­suit by Volk­swa­gen diesel own­ers seek­ing dam­ages beyond those pro­vid­ed for in a class-action set­tle­ment.

    Dr. McDon­ald said he did not know the Volk­swa­gen Bee­tle was equipped with soft­ware that rec­og­nized when the car was being test­ed on a tread­mill. The soft­ware did not inter­fere with the fil­ter that removed car­cino­genic fine soot par­ti­cles from the exhaust, a tech­nol­o­gy that has in fact improved sig­nif­i­cant­ly.

    But it cranked up con­trols so that nitro­gen diox­ide pol­lu­tion, which has been linked to asth­ma, bron­chi­tis, heart attacks and pos­si­bly lung can­cer, was only a small frac­tion of what it would be dur­ing nor­mal dri­ving.

    Even so, the study did not pro­vide a clear find­ing. The researchers strug­gled to pro­duce a paper that they could pub­lish, a con­di­tion for receiv­ing full pay­ment.

    In the August 2016 email, Mr. Spallek com­plained about numer­ous flaws with the method­ol­o­gy used by the Lovelace research team. But he nev­er men­tioned the ille­gal soft­ware that had caused the Bee­tle to pro­duce arti­fi­cial­ly low emis­sions.

    Dis­cus­sions about pub­lish­ing the study con­tin­ued until last year, accord­ing to Dr. McDon­ald. A lawyer for Volk­swa­gen, Michael Stein­berg, implied dur­ing cross-exam­i­na­tion that Dr. McDon­ald had pushed to pub­lish the results so that the insti­tute could col­lect $71,000 owed under the con­tract.

    Dr. McDon­ald dis­put­ed that asser­tion. “The deci­sion to con­tin­ue,” he said in an emailed state­ment, “was the choice of the client.”

    Although Dr. McDon­ald and oth­er employ­ees at the insti­tute exchanged emails about the Volk­swa­gen defeat device after its expo­sure in 2015, Dr. McDon­ald tes­ti­fied that he had not fol­lowed the Volk­swa­gen case close­ly and had real­ized only recent­ly that the Bee­tle used in the tests was manip­u­lat­ed to pro­duce arti­fi­cial­ly low emis­sions.

    “I feel like a chump,” Dr. McDon­ald said.

    ———-

    “10 Mon­keys and a Bee­tle: Inside VW’s Cam­paign for ‘Clean Diesel’” by JACK EWING; The New York Times; 01/25/2018

    The automak­ers’ research group was cre­at­ed in 2007, as Volk­swa­gen was ready­ing a major push to mar­ket diesel tech­nol­o­gy in the Unit­ed States, which has stricter lim­its on nitro­gen oxide emis­sions than Europe. Mr. Spallek, the exec­u­tive direc­tor, had been the chief med­ical offi­cer of Volkswagen’s com­mer­cial vehi­cles divi­sion”

    As we can see, this ‘research group’ that was sole­ly fund­ed by these big three Ger­man automak­ers got start­ed in 2007, right when VW was plan­ning on a big ‘clean diesel’ push into US mar­kets. But it’s research was­n’t exclu­sive­ly focused on these new cars. The EUGT also financed stud­ies that cast doubt on the pol­lu­tion emit­ted by old­er diesel vehi­cles. And stud­ies that ques­tioned data show­ing diesel pol­lu­tion was an issue at all in some cities. Hence the obvi­ous Big Tobac­co par­al­lels:

    ...
    The details of the Albu­querque exper­i­ment have been dis­closed in a law­suit brought against Volk­swa­gen in the Unit­ed States, offer­ing a rare win­dow into the world of indus­try-backed aca­d­e­m­ic research. The orga­ni­za­tion that com­mis­sioned the study, the Euro­pean Research Group on Envi­ron­ment and Health in the Trans­port Sec­tor, received all of its fund­ing from Volk­swa­gen, Daim­ler and BMW. It shut down last year amid con­tro­ver­sy over its work.

    The orga­ni­za­tion, known by its Ger­man ini­tials, E.U.G.T., did not do any research itself. Rather, it hired sci­en­tists to con­duct stud­ies that might defend the use of diesel. It spon­sored research that chal­lenged a 2012 deci­sion by the World Health Orga­ni­za­tion to clas­si­fy diesel exhaust as a car­cino­gen. It financed stud­ies that cast doubt on whether ban­ning old­er diesel vehi­cles from cities reduced pol­lu­tion. It pro­duced a skep­ti­cal assess­ment of data show­ing that diesel pol­lu­tion far exceed­ed per­mit­ted lev­els in cities like Barcelona, Spain.

    Indus­tries like food, chem­i­cals and phar­ma­ceu­ti­cals have a long his­to­ry of sup­port­ing research that advances their polit­i­cal agen­das. But the automak­ers’ group con­sis­tent­ly pro­mot­ed the industry’s claim that diesel was envi­ron­men­tal­ly friend­ly — a claim now under­cut by the Volk­swa­gen scan­dal.

    Mar­garet Dou­glas, the chair­woman of a pan­el that advis­es the Scot­tish pub­lic health sys­tem on pol­lu­tion issues, com­pared the automak­ers’ behav­ior to the tobac­co indus­try. Just as the tobac­co com­pa­nies pro­mot­ed nico­tine addic­tion, Ms. Dou­glas said, the car­mak­ers lob­bied for tax breaks that made Euro­pean dri­vers depen­dent on diesel.

    “There are a lot of par­al­lels between the indus­tries in the way they try to down­play the harm and encour­age peo­ple to become addict­ed,” Ms. Dou­glas said.
    ...

    “Mar­garet Dou­glas, the chair­woman of a pan­el that advis­es the Scot­tish pub­lic health sys­tem on pol­lu­tion issues, com­pared the automak­ers’ behav­ior to the tobac­co indus­try. Just as the tobac­co com­pa­nies pro­mot­ed nico­tine addic­tion, Ms. Dou­glas said, the car­mak­ers lob­bied for tax breaks that made Euro­pean dri­vers depen­dent on diesel.”

    Yes, the pro­duc­tion of faked sci­en­tif­ic evi­dence does indeed have quite a few par­al­lels with Big Tobac­co. Includ­ing all the avoid­able deaths from inhal­ing poi­so­nous com­pounds. Deaths that reached 72,000 peo­ple in Europe along in 2012 alone:

    ...
    The toll on pub­lic health has become impos­si­ble to ignore. In 2012, 72,000 peo­ple in Europe died pre­ma­ture­ly because of nitro­gen diox­ide pol­lu­tion, which comes pri­mar­i­ly from diesel vehi­cles, accord­ing to a report released last year by a com­mit­tee of the Euro­pean Par­lia­ment.
    ...

    And just like with Big Tobac­co, this indus­try financed research was gen­er­at­ed specif­i­cal­ly to dis­pel pub­lic safe­ty con­cerns:

    ...
    Research spon­sored by indus­try “all has the same fun­da­men­tal aim,” said Joachim Hein­rich, an envi­ron­men­tal health expert at the Uni­ver­si­ty of Munich who has spent his career study­ing the effects of air pol­lu­tion, “name­ly to weak­en or dis­cred­it reg­u­la­tion — to say ‘the evi­dence is not that clear,’ ‘we shouldn’t take it so seri­ous­ly,’ ‘we need to think more about it.’”

    ...

    The neg­a­tive health effects of diesel were start­ing to attract more atten­tion. Zones where diesel was restrict­ed were pro­lif­er­at­ing in Europe, pos­ing a threat to automak­ers because the areas dis­cour­age sales of diesels.

    In response, the research group financed two stud­ies that con­clud­ed that low-emis­sions zones had only a mar­gin­al effect on pol­lu­tion lev­els. But the stud­ies used dubi­ous method­ol­o­gy, the Ger­man Fed­er­al Envi­ron­ment Agency said in a report released last year.

    The indus­try group’s stud­ies on low emis­sions zones were influ­en­tial, how­ev­er. They were cit­ed in reports by the Orga­ni­za­tion for Eco­nom­ic Coop­er­a­tion and Devel­op­ment, and by the Nation­al Insti­tute for Health and Care Excel­lence, a pub­lic body in Britain that pro­vides guid­ance on health care.

    Else­where, a region­al court in Aus­tria cit­ed the research in a 2014 rul­ing against res­i­dents of Graz who had sued to force offi­cials to restrict diesel traf­fic. The deci­sion, by the State Admin­is­tra­tive Court for the province of Styr­ia, called the study “thor­ough” and said it showed that the effect of low-emis­sions zones on fine soot pol­lu­tion was “less than expect­ed.” The deci­sion did not men­tion that the study had been financed by the auto indus­try.

    Offi­cials at the research group also sought to influ­ence pub­lic debate. In 2016, Hel­mut Greim, the chair­man of the group’s research advi­so­ry board, tes­ti­fied before the Ger­man Par­lia­ment that it was impos­si­ble to estab­lish a direct link between nitro­gen diox­ide pol­lu­tion and lung ail­ments. Mr. Greim is a long­time bête noire for envi­ron­men­tal activists, who say he con­sis­tent­ly takes the indus­try point of view.

    Mr. Greim, 82, said in an inter­view that the group’s research was inde­pen­dent and pub­lished only in peer-reviewed jour­nals. Dur­ing an inter­view in Munich, he said that fear of nitro­gen diox­ide pol­lu­tion was “com­plete­ly overblown.”
    ...

    And note how, even with the rigged VW Bee­tle, the 2014 study on mon­keys and humans did­n’t even pro­vide a clear find­ing. But they pressed ahead with pub­lish­ing their results any­way. Although the VW and the research com­pa­ny they hired dis­agree on which side was push­ing for the pub­li­ca­tion:

    ...
    Dr. McDon­ald said he did not know the Volk­swa­gen Bee­tle was equipped with soft­ware that rec­og­nized when the car was being test­ed on a tread­mill. The soft­ware did not inter­fere with the fil­ter that removed car­cino­genic fine soot par­ti­cles from the exhaust, a tech­nol­o­gy that has in fact improved sig­nif­i­cant­ly.

    But it cranked up con­trols so that nitro­gen diox­ide pol­lu­tion, which has been linked to asth­ma, bron­chi­tis, heart attacks and pos­si­bly lung can­cer, was only a small frac­tion of what it would be dur­ing nor­mal dri­ving.

    Even so, the study did not pro­vide a clear find­ing. The researchers strug­gled to pro­duce a paper that they could pub­lish, a con­di­tion for receiv­ing full pay­ment.

    In the August 2016 email, Mr. Spallek com­plained about numer­ous flaws with the method­ol­o­gy used by the Lovelace research team. But he nev­er men­tioned the ille­gal soft­ware that had caused the Bee­tle to pro­duce arti­fi­cial­ly low emis­sions.

    Dis­cus­sions about pub­lish­ing the study con­tin­ued until last year, accord­ing to Dr. McDon­ald. A lawyer for Volk­swa­gen, Michael Stein­berg, implied dur­ing cross-exam­i­na­tion that Dr. McDon­ald had pushed to pub­lish the results so that the insti­tute could col­lect $71,000 owed under the con­tract.

    Dr. McDon­ald dis­put­ed that asser­tion. “The deci­sion to con­tin­ue,” he said in an emailed state­ment, “was the choice of the client.”

    Although Dr. McDon­ald and oth­er employ­ees at the insti­tute exchanged emails about the Volk­swa­gen defeat device after its expo­sure in 2015, Dr. McDon­ald tes­ti­fied that he had not fol­lowed the Volk­swa­gen case close­ly and had real­ized only recent­ly that the Bee­tle used in the tests was manip­u­lat­ed to pro­duce arti­fi­cial­ly low emis­sions.

    “I feel like a chump,” Dr. McDon­ald said.

    “I feel like a chump”

    Yeah, feel­ing like chumps seems like an appro­pri­ate response in this sit­u­a­tion. For every­one involved. Except for the fam­i­lies of the peo­ple who died pre­ma­ture­ly because of nitro­gen diox­ide pol­lu­tion. They should feel like a lot more than just chumps in this sit­u­a­tion.

    Posted by Pterrafractyl | January 29, 2018, 3:06 pm
  16. It nev­er ends: There’s a new mass recall of diesel-pow­ered cars over the use of “defeat devices” to hide emis­sions. This time it’s Daim­ler. In par­tic­u­lar, 774,000 vehi­cles, most­ly Vito vans and diesel-pow­ered ver­sions of GLC 4x4s and C‑class sedans, are all recalled. Keep mind that VW end­ed up recall­ing some 11 mil­lion vehi­cles, so Daim­ler has a ways to go to catch up to VW. But as the fol­low­ing arti­cle notes, when Ger­man pros­e­cu­tors declared their inves­ti­ga­tion “only get­ting start­ed” when they raid­ed BMW in March. And the same is like­ly true for Daim­ler, so we’ll see what the final recall num­ber is for the com­pa­ny but giv­en how this scan­dal has played out so far it’s hard to believe this is the end of Daim­ler’s diesel-woes:

    Agences France Press

    Ger­many hits Mer­cedes with mass diesel recall

    June 11, 2018

    Ger­many ordered Mon­day the recall of some 774,000 vehi­cles from Mer­cedes-Benz mak­er Daim­ler across Europe, cit­ing ille­gal “defeat devices” designed to con­ceal high lev­els of harm­ful emis­sions from reg­u­la­tors’ tests.

    “The fed­er­al gov­ern­ment will order an imme­di­ate offi­cial recall because of ille­gal defeat devices,” Trans­port Min­is­ter Andreas Scheuer said in a state­ment.

    The move most­ly affects Vito vans and diesel-pow­ered ver­sions of GLC 4x4s and C‑class sedans, Scheuer added.

    Daim­ler boss Dieter Zetsche was sum­moned Mon­day for crunch talks with Scheuer over emis­sions irreg­u­lar­i­ties in the fir­m’s vehi­cles.

    “Daim­ler says the appli­ca­tions in the motor con­trol soft­ware the fed­er­al gov­ern­ment has found fault with will be removed at the great­est pos­si­ble speed and in coop­er­a­tive trans­paren­cy with the author­i­ties,” Scheuer said.

    ...

    - ‘Diesel quag­mire’ -

    So-called defeat devices were at the heart of Volk­swa­gen’s “diesel­gate” scan­dal, in which the world’s largest car­mak­er admit­ted in Sep­tem­ber 2015 to installing them in 11 mil­lion vehi­cles world­wide.

    Vehi­cles kept to legal emis­sions lim­its for harm­ful sub­stances like nitro­gen oxides (NOx) dur­ing lab tests, only to exceed them as much as 40 times in on-road dri­ving.

    The scan­dal has so far cost the world’s largest car­mak­er over 25 bil­lion euros ($29.5 bil­lion) in fines, buy­backs and com­pen­sa­tion, and senior exec­u­tives are under inves­ti­ga­tion over their sus­pect­ed roles in the cheat­ing.

    In the years since 2015, oth­er Ger­man car­mak­ers have also been forced to recall vehi­cles to fix manip­u­lat­ed soft­ware, although none has so far admit­ted to mass cheat­ing as Volk­swa­gen did.

    Recent weeks have seen Ger­many’s KBA vehi­cle licens­ing author­i­ty hit Volk­swa­gen sub­sidiaries Audi and Porsche with mass recall orders over their engine con­trol soft­ware, as well as a small­er batch of cars from rival BMW.

    Pros­e­cu­tors raid­ed Munich-based BMW in March, say­ing their inves­ti­ga­tion was “only just get­ting start­ed” after gath­er­ing evi­dence, and announced on Mon­day they sus­pect Audi chief exec­u­tive Richard Stadler of fraud.

    “The whole Euro­pean car indus­try is still stuck in this diesel quag­mire, and every­thing that’s been done so far has done noth­ing to set it free,” auto indus­try expert Fer­di­nand Duden­ho­ef­fer of the CAR research cen­tre told AFP — point­ing also to Ital­ian and French automak­ers.

    The Ger­man gov­ern­ment should approve hard­ware, rather than soft­ware alter­ations to manip­u­lat­ed vehi­cles to pro­duce “an hon­est solu­tion” to exces­sive emis­sions, Duden­ho­ef­fer charged.

    Oth­er­wise, “car firms will con­tin­ue to stum­ble into the future and watch as their rep­u­ta­tions are destroyed,” he warned.

    “The pres­sure is ris­ing, but it’s of course up to the politi­cians” how much progress is made, Duden­ho­ef­fer said.

    For their part, Ger­man firms have announced dozens of new elec­tric and hybrid mod­els for the com­ing years in a bid to bring down emis­sions of both green­house gas CO2 — the orig­i­nal rea­son they turned to diesel — and of harm­ful NOx.

    But they con­tin­ue to bet on the inter­nal com­bus­tion engine and diesel into the future, with Daim­ler and com­po­nent mak­er Bosch recent­ly tout­ing upgrad­ed diesel tech­nol­o­gy they say solves the motors’ exhaust issues.

    ———-

    “Ger­many hits Mer­cedes with mass diesel recall”; Agences France Press; 06/11/2018

    “Ger­many ordered Mon­day the recall of some 774,000 vehi­cles from Mer­cedes-Benz mak­er Daim­ler across Europe, cit­ing ille­gal “defeat devices” designed to con­ceal high lev­els of harm­ful emis­sions from reg­u­la­tors’ tests.”

    774,000 vehi­cles that have been secret­ly spew­ing out far more pol­lu­tion than adver­tised final­ly get recalled three years after Diesel­gate was first dis­cov­ered. It’s a start:

    ...
    — ‘Diesel quag­mire’ -

    So-called defeat devices were at the heart of Volk­swa­gen’s “diesel­gate” scan­dal, in which the world’s largest car­mak­er admit­ted in Sep­tem­ber 2015 to installing them in 11 mil­lion vehi­cles world­wide.

    Vehi­cles kept to legal emis­sions lim­its for harm­ful sub­stances like nitro­gen oxides (NOx) dur­ing lab tests, only to exceed them as much as 40 times in on-road dri­ving.

    The scan­dal has so far cost the world’s largest car­mak­er over 25 bil­lion euros ($29.5 bil­lion) in fines, buy­backs and com­pen­sa­tion, and senior exec­u­tives are under inves­ti­ga­tion over their sus­pect­ed roles in the cheat­ing.

    In the years since 2015, oth­er Ger­man car­mak­ers have also been forced to recall vehi­cles to fix manip­u­lat­ed soft­ware, although none has so far admit­ted to mass cheat­ing as Volk­swa­gen did.
    ...

    “In the years since 2015, oth­er Ger­man car­mak­ers have also been forced to recall vehi­cles to fix manip­u­lat­ed soft­ware, although none has so far admit­ted to mass cheat­ing as Volk­swa­gen did.”

    Will Daim­ler admit to “mass cheat­ing” or is 774,000 con­sid­ered min­i­mal stan­dard cheat­ing by auto indus­try stan­dards? Because don’t for­get the sto­ry of VW: pret­ty much ALL their ‘clean diesel’ vehi­cles were using defeat devices because that’s the only way they could offer ‘clean diesel’. Not cheat­ing was­n’t an option for VW. So if Daim­ler is caught using defeat devices on some of their ‘clean diesel’ vehi­cles it’s hard to see why it isn’t high­ly like­ly that all of their ‘clean diesel’ vehi­cles were using such devices. Why use it in some, but not all, mod­els? So we should prob­a­bly expect this sto­ry to be a pre­lude many more sto­ries about Daim­ler cheat­ing:

    ...
    Recent weeks have seen Ger­many’s KBA vehi­cle licens­ing author­i­ty hit Volk­swa­gen sub­sidiaries Audi and Porsche with mass recall orders over their engine con­trol soft­ware, as well as a small­er batch of cars from rival BMW.

    Pros­e­cu­tors raid­ed Munich-based BMW in March, say­ing their inves­ti­ga­tion was “only just get­ting start­ed” after gath­er­ing evi­dence, and announced on Mon­day they sus­pect Audi chief exec­u­tive Richard Stadler of fraud.
    ...

    And note the warn­ing from auto indus­try expert Fer­di­nand Duden­ho­ef­fer: The Ger­man gov­ern­ment should approve hard­ware, rather than soft­ware alter­ations to manip­u­lat­ed vehi­cles to pro­duce “an hon­est solu­tion” to exces­sive emis­sions, Duden­ho­ef­fer charged. Oth­er­wise, “car firms will con­tin­ue to stum­ble into the future and watch as their rep­u­ta­tions are destroyed”. It’s quite a warn­ing:

    ...
    “The whole Euro­pean car indus­try is still stuck in this diesel quag­mire, and every­thing that’s been done so far has done noth­ing to set it free,” auto indus­try expert Fer­di­nand Duden­ho­ef­fer of the CAR research cen­tre told AFP — point­ing also to Ital­ian and French automak­ers.

    The Ger­man gov­ern­ment should approve hard­ware, rather than soft­ware alter­ations to manip­u­lat­ed vehi­cles to pro­duce “an hon­est solu­tion” to exces­sive emis­sions, Duden­ho­ef­fer charged.

    Oth­er­wise, “car firms will con­tin­ue to stum­ble into the future and watch as their rep­u­ta­tions are destroyed,” he warned.

    “The pres­sure is ris­ing, but it’s of course up to the politi­cians” how much progress is made, Duden­ho­ef­fer said.
    ...

    And part of what makes that warn­ing about Duden­ho­ef­fer so inter­est­ing is that it sug­gests a con­cern that the soft­ware ‘fix­es’ to these ‘defeat devices’ might, them­selves, not actu­al­ly be actu­al fix­es. And that con­cern just hap­pens to be shared by Ger­man Envi­ron­men­tal Min­is­ter Sven­ja Schulze of the SPD. Accord­ing to Schulze, hard­ware fix­es to all of the impact­ed vehi­cles is the only way to actu­al­ly make them clean enough for use in urban area. Ger­man Trans­port Min­is­ter Andreas Scheuer, who hap­pens to be a mem­ber of the hard right CSU, oppos­es Schulze’s call. So we have a sit­u­a­tion where one agency of the Ger­man gov­ern­ment is say­ing hard­ware fix­es are required and anoth­er agency argu­ing the oppo­site. Thus, when Duden­ho­ef­fer says “it’s of course up to the politi­cians” over whether or not “an hon­est solu­tion” like hard­ware fix­es are imple­ment­ed, it’s a very open ques­tion whether or not that will hap­pen:

    Reuters

    Ger­man min­is­ter: Hard­ware retro­fits only way to avoid dri­ving bans

    Reuters Staff
    April 21, 2018 / 8:35 AM

    BERLIN (Reuters) — Ger­man Envi­ron­ment Min­is­ter Sven­ja Schulze has told a news­pa­per she does not think soft­ware updates for diesel vehi­cles in Ger­many will be enough to solve air qual­i­ty prob­lems and that hard­ware retro­fits are the only way to avoid dri­ving bans.

    The Ger­man car indus­try, which accounts for some 800,000 jobs in Europe’s biggest econ­o­my, is strug­gling with a glob­al back­lash against diesel cars after Volk­swa­gen (VOWG_p.DE) admit­ted in 2015 that it had cheat­ed U.S. exhaust tests.

    Chan­cel­lor Angela Merkel has said she will do every­thing pos­si­ble to avoid dri­ving bans but dis­agree­ments over how to tack­le the prob­lem of diesel cars with high nitro­gen oxide (NOx) emis­sions threat­en to fur­ther strain her coali­tion with the Social Democ­rats (SPD).

    Asked in an inter­view with Tagesspiegel to be pub­lished on Sun­day whether mea­sures already agreed on diesel would suf­fice to avoid dri­ving bans, Schulze said: “I fear that in cities where the lim­its have been far exceed­ed — Munich, Stuttgart and oth­ers — soft­ware updates alone will not suf­fice.”

    She added: “The many mea­sures from the imme­di­ate pro­gram for clean air, such as elec­tri­fi­ca­tion of bus­es, are good and will help many cities but over­all they aren’t enough to solve the prob­lem in cities that are par­tic­u­lar­ly bad­ly affect­ed.”

    Schulze, of the SPD, said she was there­fore cam­paign­ing hard for vehi­cles to get tech­ni­cal retro­fits, adding: “In my view that’s the only real­is­tic way to avoid dri­ving bans.”

    Asked whether the car­mak­ers should pay for the hard­ware retro­fits them­selves, she said: “Yes — they are the ones who have caused this.”

    She said hard­ware retro­fits were espe­cial­ly nec­es­sary in par­tic­u­lar­ly bad­ly affect­ed urban areas where there was no oth­er way to stick to NOx lim­its, adding this was like­ly to be around 20 cities.

    How­ev­er, Ger­man Trans­port Min­is­ter Andreas Scheuer, a mem­ber of the Bavar­i­an CSU sis­ter par­ty of Merkel’s Chris­t­ian Democ­rats (CDU), oppos­es cost­ly hard­ware retro­fits, say­ing he is com­mit­ted to meet­ing emis­sions tar­gets using mea­sures already being imple­ment­ed.

    Schulze said she and Scheuer were dis­cussing the diesel issue intense­ly and both want­ed Ger­many to have a strong auto­mo­bile indus­try with many jobs. But, she said, it would only remain strong if it pio­neered vehi­cles of the future, and Chi­na was the biggest future mar­ket.

    ...

    ———-

    “Ger­man min­is­ter: Hard­ware retro­fits only way to avoid dri­ving bans” Reuters Staff; Reuters; 04/21/2018

    “Ger­man Envi­ron­ment Min­is­ter Sven­ja Schulze has told a news­pa­per she does not think soft­ware updates for diesel vehi­cles in Ger­many will be enough to solve air qual­i­ty prob­lems and that hard­ware retro­fits are the only way to avoid dri­ving bans.”

    The soft­ware updates are just anoth­er scam and man­u­fac­tur­ers should have to pay for the much more expen­sive hard­ware updates. That’s more or less the mes­sage from Ger­many’s envi­ron­men­tal min­is­ter:

    ...
    Asked in an inter­view with Tagesspiegel to be pub­lished on Sun­day whether mea­sures already agreed on diesel would suf­fice to avoid dri­ving bans, Schulze said: “I fear that in cities where the lim­its have been far exceed­ed — Munich, Stuttgart and oth­ers — soft­ware updates alone will not suf­fice.”

    She added: “The many mea­sures from the imme­di­ate pro­gram for clean air, such as elec­tri­fi­ca­tion of bus­es, are good and will help many cities but over­all they aren’t enough to solve the prob­lem in cities that are par­tic­u­lar­ly bad­ly affect­ed.”

    Schulze, of the SPD, said she was there­fore cam­paign­ing hard for vehi­cles to get tech­ni­cal retro­fits, adding: “In my view that’s the only real­is­tic way to avoid dri­ving bans.”

    Asked whether the car­mak­ers should pay for the hard­ware retro­fits them­selves, she said: “Yes — they are the ones who have caused this.”
    ...

    Not sur­pris­ing­ly, Ger­many’s con­ser­v­a­tives dis­agree, includ­ing the Ger­man Trans­port Min­is­ter:

    ...
    Chan­cel­lor Angela Merkel has said she will do every­thing pos­si­ble to avoid dri­ving bans but dis­agree­ments over how to tack­le the prob­lem of diesel cars with high nitro­gen oxide (NOx) emis­sions threat­en to fur­ther strain her coali­tion with the Social Democ­rats (SPD).

    ...

    She said hard­ware retro­fits were espe­cial­ly nec­es­sary in par­tic­u­lar­ly bad­ly affect­ed urban areas where there was no oth­er way to stick to NOx lim­its, adding this was like­ly to be around 20 cities.

    How­ev­er, Ger­man Trans­port Min­is­ter Andreas Scheuer, a mem­ber of the Bavar­i­an CSU sis­ter par­ty of Merkel’s Chris­t­ian Democ­rats (CDU), oppos­es cost­ly hard­ware retro­fits, say­ing he is com­mit­ted to meet­ing emis­sions tar­gets using mea­sures already being imple­ment­ed.

    Schulze said she and Scheuer were dis­cussing the diesel issue intense­ly and both want­ed Ger­many to have a strong auto­mo­bile indus­try with many jobs. But, she said, it would only remain strong if it pio­neered vehi­cles of the future, and Chi­na was the biggest future mar­ket.
    ...

    And that all high­lights how the future rep­u­ta­tion of Ger­many’s auto indus­try is going to be shaped by a polit­i­cal fight with­in Ger­many over whether or not an “hon­est fix” should actu­al­ly be man­dat­ed. A polit­i­cal fight that’s yet to be resolved. But it’s not just the rep­u­ta­tion of the auto man­u­fac­tur­ers at stake. Heck, they’ve already demon­strat­ed that they will do what­ev­er they can get away with. Instead, it’s the Ger­man gov­ern­men­t’s own rep­u­ta­tion that’s at stake, a rep­u­ta­tion that those auto man­u­fac­tur­ers are going to have to fall back on more than ever as Diesel­gate con­tin­ues to unfold. So if the man­u­fac­tur­ers ‘win’ this polit­i­cal fight and avoid a manda­to­ry hard­ware fix, they could end up demon­strat­ing to the world that the Ger­man auto indus­try calls the shots when it comes to Ger­man reg­u­la­tions. In oth­er words, if Diesel­gate turns into a scan­dal where politi­cians behold­en to the auto indus­try thwart real fix­es and every­one is left with soft­ware fix­es that don’t actu­al­ly fix any­thing thanks to cor­rupt pol­i­tics, that’s no longer just an auto indus­try scan­dal.

    Posted by Pterrafractyl | June 12, 2018, 12:17 pm

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