The VW scandal

Wow, that seems ridiculously short-sighted.

There, to me, seems to be an ongoing ownership battle and this is things hotting up. There must have been a whistleblower about the software or how else did the US authorities suddenly "discover" the different engine settings?

"“I would be very much surprised if this was just a handful of engineers manipulating the software and everyone else not knowing about it,” said Arndt Ellinghorst, a London-based analyst with Evercore ISI who has followed VW for more than a decade. “For Martin Winterkorn, it is clear that if he knew about this, these allegations weigh so heavily that he must bear the consequences personally and resign.”

The timing is delicate for Winterkorn. He was consolidating authority after surviving a power struggle with his former mentor and VW patriarch Ferdinand Piech, who tried and failed to oust Winterkorn in April."

"Decision-making at Volkswagen is highly centralized. Winterkorn and a couple dozen managers vet product plans in Wolfsburg, including detailed lists of components that differentiate between new and standardized parts. Winterkorn was aiming to loosen that structure by pushing more authority to brand and regional managers. That reorganization was due to be approved by Volkswagen’s supervisory board on Friday, along with his contract extension."
(So the scandal breaks one week before the CEO's contract comes up for renewing - coincidence?)

http://www.autonews.com/article/20150922/OEM01/150929969/vw-ceos-history-of-sweating-the-details-now-haunting-him

(VW leap into action and hire lawyers - http://www.bloomberg.com/news/articles/2015-09-23/volkswagen-hires-kirkland-ellis-in-pollution-controls-scandal )

http://www.sfgate.com/news/science/article/Exposing-vehicle-emissions-problems-not-new-for-6523539.php

The International Council on Clean Transportation (http://www.theicct.org/ ) were the people who started out the investigation of VW in 2013 after reports from drivers in Europe mainly.

The WVU Center for Alternative Fuels, Engines and Emissions (http://cafee.wvu.edu/ ) tested the cars and reported in May 2014 that significantly higher emissions were measured.

VW blamed glitches but "Only when the EPA and the California board refused to approve VW's 2016 diesel models for sale did the company acknowledge putting stealth software in millions of its vehicles worldwide."

So this was no result of the boardroom infighting but "buisness as usual"!

Update - http://www.reuters.com/article/2015/09/22/usa-volkswagen-carb-idUSL1N11S2W420150922

"VW engineers acknowledged the use of a so-called defeat device - in fact, a software algorithm - to circumvent state and federal emissions standards during a Sept. 3 meeting in the board's El Monte, California testing headquarters, attended by senior engineering executives of the regulator and the car company.

It was the 10th meeting between the two sides, called by CARB to resolve the discrepancy between pollution levels measured on the road and those obtained under controlled testing conditions.

"They literally ran out of excuses," Young said, describing the meeting in which the car manufacturer "admitted there was a defeat device."


(Apparently the same thing was done  with truck engines in 1998 and several car manufacturers had to pay hefty fines)

Don't believe the hype! The NY Times have put together a good article on all the cheating done by car manufacturers over the years

http://www.nytimes.com/2015/09/24/business/international/volkswagen-test-rigging-follows-a-long-auto-industry-pattern.html

(General Motors, Ford, and Chrysler have also been bailed out by the US government on more then one occasion.)

The ripples continue ... The UK knew a year ago about these cheating devices in cars,
"The issue of who knew what, and when, about defeat devices also surfaced in the UK. The opposition Labour party attacked the government after it admitted receiving evidence nearly a year ago that some diesel cars were fitted to rig emissions testing.

The Department for Transport said that in October 2014 it received a report by the International Council on Clean Transportation saying there was a “real world nitrogen oxides compliance issue” for diesel passenger cars."

"Since the EU banned defeat devices in 2007, the European Commission has attempted to introduce legislation to test diesel cars in a more realistic “real-world” environment. It argues that these new on-the-road tests will be able to counter the effect of illegal software.

However, green groups and members of the European Parliament have protested that these reforms have been delayed for eight years by the powerful diesel lobby.

Greenpeace complained that, according to publicly available data, diesel manufacturers had spent as much as €18.5m lobbying Brussels in 2014, employing 184 lobbyists.

“As evidence emerges that the German government and the European Commission knew about the test-cheating software, people will be wondering why it took the Americans to expose it. The extent of the carmakers’ lobbying power could provide some clues to the answer,” said John Sauven, executive director of Greenpeace UK. "

see http://www.ft.com/intl/cms/s/0/d0d7ba40-6394-11e5-9846-de406ccb37f2.html#axzz3mnDDEnGy

https://ec.europa.eu/jrc/en/news/transport-emissions-jrc-lead-development-new-test-procedure-cars-9707?search

11 Feb 2013 Yes, 2013! but wait it goes back to 2010 ....
"In view of persisting air quality problems, the European Commission decided in 2010 to address this situation by complementing the current laboratory test with a real-driving test procedure, which should be able to capture the wide range of driving conditions encountered on the road.

A working group led by the JRC and composed by industry stakeholders and Member States representatives was established to assess the potential of 2 candidate procedures: emissions testing with random driving cycles in the laboratory or on road emissions testing with portable emissions measurement systems (PEMS).

A newly published report covers the assessment done, based on emissions testing and expert judgment. On-road emissions testing with a portable device was judged to better cover the wide range of driving and ambient conditions than random laboratory test cycles.

Following the findings of this report, it was decided in December last year to primarily develop on-road testing with PEMS as the main real-driving test procedure. To this end, an extensive vehicle test campaign will be conducted in cooperation with car manufacturers and European technical services in 2013."

The first sentance of the report,"Light-duty diesel vehicles emit on the road substantially more nitrogen oxides (NOX) than permitted by regulatory emissions standards." JEEZUS!
report at http://publications.jrc.ec.europa.eu/repository/bitstream/JRC75998/ld-na-25572-en-n_online.pdf

"German media reported Sunday that Volkswagen had received warnings years ago about the use of illegal tricks to defeat emissions tests. Bild am Sonntag said VW's internal investigation has found a 2007 letter from parts supplier Bosch warning Volkswagen not to use the software during regular operation. Frankfurter Allgemeine Sonntagszeitung said a Volkswagen technician raised concerns about illegal practices in connection with emissions levels in 2011."

http://abcnews.go.com/Politics/wireStory/vw-facing-tsunami-legal-trouble-emissions-scandal-34077650

Volkswagen AG executives in Germany controlled the key aspects of emissions tests whose results the carmaker now admits were faked, according to three people familiar with the company’s U.S. operations.

....Their accounts show the chain of command and those involved in the deception stretched to Volkswagen headquarters.... Ulrich Hackenberg.... Wolfgang Hatz are among those who will leave the company in the wake of Winterkorn’s resignation two days ago, two people familiar with the matter said. The two previously ran units at the heart of the affair — Hackenberg, a Winterkorn confidant, was responsible for VW brand development from 2007 to 2013, while Hatz ran the group’s motor development from 2007 to 2011.

http://www.motherjones.com/kevin-drum/2015/09/vw-tries-blame-engine-emissions-fraud-low-level-engineers-and-technicians

http://www.bbc.com/news/business-37241304
Australia is suing the local arm of Volkswagen for allegedly misleading customers by selling modified vehicles that covered up emissions fraud.

Its consumer watchdog claims Volkswagen intentionally sold more than 57,000 such vehicles over a five-year period.

The Australian Competition and Consumer Commission (ACCC) is seeking a public declaration of misconduct, financial penalties and corrective advertising.

Volkswagen Australia said it is reviewing the ACCC claims.

In a statement, the firm said it does not think that the court action "provides any practical benefit to consumers because software solutions for cars affected by the voluntary recall are expected soon".

"The best outcome for customers whose vehicle is affected is to have the voluntary recall service updates installed," Volkswagen Group Australia managing director Michael Bartsch said.

The ACCC lawsuit covers 10 Volkwagen car models including the top-selling Golf, Passat and Polo,

"These allegations involve extraordinary conduct of a serious and deliberate nature by a global corporation," ACCC chairman Rod Sims said in a statement.

Volkswagen, the world's second-biggest car maker, is also facing several private class action lawsuits in Australia.

http://www.nytimes.com/2016/11/03/world/europe/volkswagen-vw-emissions-scandal-nazi.html
Over the past 18 years, Volkswagen became something of a pioneer in revealing the company’s employment of thousands of forced laborers during World War II. But it has abruptly parted ways with the company historian who helped make that possible.

The book, more than 1,000 pages by Mr. Grieger and another historian, Hans Mommsen, was financed by Volkswagen at a time when many German companies were coming to terms with their roles during the Nazi era.

But Volkswagen may have gotten more truth than it had anticipated. The book also uncovered embarrassing information about the Porsche and Piëch families, who since 2012 have owned a majority of the carmaker’s voting stock.

The Wolfsburg factory, still Volkswagen’s main manufacturing center, was originally a Nazi prestige project built under the supervision of Ferdinand Porsche, designer of the car that later became famous as the Beetle. The factory produced military goods including land mines, parts for rockets fired at British cities, hand-held anti-tank weapons and a Jeep-like vehicle known as the Kübelwagen.

Volkswagen was especially dependent on workers press-ganged from occupied countries or borrowed from concentration camps, including Auschwitz, because it was a new company with a limited work force of its own.
...
It all shows “clearly how communication has gone awry at the top of VW,” said the historians, Lutz Budrass of Ruhr-University Bochum and Mark Spoerer from the University of Regensburg.

In his review of the study of Audi’s past, Mr. Grieger criticized the authors as having played down the company’s cooperation with the Nazis and its employment of forced laborers.

http://www.dw.com/en/report-vw-negotiating-torture-reparations-in-brazil/a-18820469
A Brazilian newspaper has reported that VW is negotiating a settlement for allowing the torture of employees during the military dictatorship. However, a company official says VW is in the early stage of discussions.