How Volkswagen Could Compensate Diesel Owners | Techno stream

How Volkswagen Could Compensate Diesel Owners

26 Sep 2015 | Author: | No comments yet »

Berlin says 2.8 million vehicles in Germany affected by VW manipulations.

BERLIN (Reuters) – German Transport Minister Alexander Dobrindt said on Friday that around 2.8 million vehicles in Germany were affected by Volkswagen’s rigging of diesel emission tests. “It’s now clear that vehicles in Germany are affected by these manipulations.Czech Transport Ministry says it is awaiting information from Volkswagen about how many of the EA 189 diesel engines at the center of the company’s emissions-rigging scandal were used in Skoda Auto vehicles.

Volkswagen AG VLKAY -5.38 % ’s supervisory board assembled Friday for a meeting that could run until evening to anoint a new chief executive, shake up the senior management team and begin repairing damage from a massive scandal that has erased almost one-third of the company’s market value.To the editor: I think it is important to remember that Volkswagen the company did not mislead any buyers and did not create any method of cheating on the testing of emissions.

The 62-year-old company veteran will be chosen at a supervisory board meeting to replace Martin Winterkorn, who resigned on Wednesday and said VW needed a fresh start, a source close to the matter told Reuters. The 20-member board appeared poised to name Matthias Müller, the head of Volkswagen’s Porsche sports-car unit, as the replacement for Martin Winterkorn, according to people familiar with the situation. Environmental Protection Agency is planning wholesale reform of its procedure for testing diesel engines, following revelations that Volkswagen VLKPY -5.99% installed software in its cars that allowed it to fool regulators into thinking the vehicles were cleaner than they actually were, according to the Associated Press.

The company admitted earlier this week that 11 million of its diesel vehicles worldwide are equipped with the software that covertly turns on pollution controls when the car is being tested, and off when it is being driven. We installed sun cells on our roof at a cost of thousands of dollars — not for personal savings (we won’t live long enough) but as our contribution to clean air. Chris Grundler, head of the EPA’s office of transportation and air quality, told the news service that his agency would begin testing cars on the road in addition to the tests performed with cars on treadmills. “The agency did have on-road testing equipment — but it was assigned to monitor automaker gas mileage estimates and heavy-duty diesel trucks, where cheating had been uncovered in the past,” the report said. Winterkorn resigned Wednesday after the German company admitted that up to 11 million cars could be affected by Volkswagen’s efforts to deliberately circumvent environmental regulations. Wolfsburg-based Volkswagen now faces the prospect of multibillion-dollar financial penalties, massive costs for fixing or replacing affected cars, and lawsuits.

We sold our 6-year-old Prius a year ago and purchased a VW Jetta primarily because it was advertised as a “TDI clean diesel.” We paid a considerable premium over the nondiesel model, primarily to drive a car that had cleaner emissions. The scandal has spread, with Germany’s transport minister saying on Thursday the company had also cheated tests in Europe – where its sales are much higher than in the United States – and regulators and prosecutors across the world investigating. The wider car market has been rocked, with manufacturers fearing a drop in sales of diesel cars and tighter regulations, while customers and dealers are furious that Volkswagen has yet to say whether it will have to recall any cars. “VW needs to be very open about what has happened, how it was possible that this could happen to make sure that this never happens again in the future,” said a leading VW shareholder, underlining the importance of the meeting. Müller, a long-serving employee of the Volkswagen group, would oversee a sprawling empire with €200 billion ($225 billion) in sales that produces models including inexpensive Czech-made Skoda cars, its world-known VW models, as well as luxury vehicles from Audi, NSU 2.86 % Bentley and Bugatti.

The Times articles have suggested that many owners may be reluctant to turn in their vehicles for the recall because of a possible decrease in fuel efficiency. Since it has been suggested that government fines might exceed $37,500 per vehicle and that the resale value of the affected models could be considerably reduced, why not encourage compliance by sharing some of the revenue acquired through fines with the victims of this outrageous fraud?

The EPA and the California Air Resources Board have engineers who are “developing clever ways in which these things can be detected,” Grundler says. They also expect it to announce a full investigation of the scandal, to be carried out by an external firm, and to give the outlines of a new management structure likely to be less centralised, but with a clearer system of checks. Volkswagen has long been seen as a symbol of German industrial prowess and the auto industry is one of the country’s major employers and a key source of export income. He has been a member of VW’s management board since 2003. “Volkswagen needs to think big and bold,” said Bernstein Research analyst Max Warbuton. But Bernstein’s Max Warburton questioned whether a man who has spent more than three decades at the company was the right man to signal a break with the past.

One idea he proposes would be an offer to buy back and scrap the incriminated diesel cars sold in the U.S. as part of a charm offensive with government, regulators, and the media. Daimler AG, the maker of Mercedes cars, is rejecting claims by a German environmental group that it appears to have been involved in manipulation of emissions data.

With environmental campaigners protesting outside Volkswagen’s headquarters on Friday, coming clean on the emissions scandal is one priority, analysts say. Environmentalists have long complained that carmakers game the vehicle testing regime to exaggerate the fuel-efficiency and emissions readings of their vehicles. VW was able to fool the EPA because the agency only tested the cars on treadmill-like devices called dynamometers and didn’t use portable test equipment on real roads. The software in the cars’ engine-control computers checked the speed, steering wheel position, air pressure and other factors to determine when dynamometer tests were under way.

It certainly is not fair to punish the people who were duped into purchasing these vehicles by forcing them to “negatively affect the cars’ performance or fuel efficiency,” as your writer points out in the article. To the editor: These admittedly intentional acts set this particular big business wrong-doing apart and separate from GM’s and Toyota’s recent screw-ups. VW started the scheme with the 2009 model year, and may not have been caught without testing performed at West Virginia University on behalf of the International Council on Clean Transportation, a nonprofit group that advises governments on regulations. Italy’s transport minister says spot-checks will be done on at least 1,000 diesel vehicles of all brands following the Volkswagen emissions-rigging scandal.

In an era of massive climate change and the imperative that we move beyond carbon as quickly as possible, these actions by VW must be seen in the larger context of the struggle to shift from polluting to clean forms of personal transportation. Verified email addresses: All users on Independent Media news sites are now required to have a verified email address before being allowed to comment on articles. An Italian consumer group, Altroconsumo, said Friday a class action suit was planned and called on Volkswagen to either correct the software employed in the emissions-rigging or substitute the vehicle. A Turin-based prosecutor specializing in health and pollution probes has ordered checks of Volkswagens, and eventually of other brands, in Italy to see if commercial fraud or environmental damage is involved.

Bill Nelson of Florida is frustrated that regulatory agencies such as the EPA are failing to protect the public. “Seven years is way too long a time that the EPA has been asleep at the switch,” he says. He says the VW case has similarities to those involving General Motors ‘ defective ignition switches and Takata Corp.’s exploding air bag inflators, where it also took years before those problems were disclosed to consumers. Shares in Volkswagen, which plunged early in the week before stabilizing, were up 1.5 percent as its board meets to find a new CEO and discuss the scandal. European regulators were looking into VW’s on-road diesel emissions as far back as 2012, and since diesels make up half the cars there, the EPA decided to let Europe take the lead, he says.

Other senior members of the board include: IG Metall Deputy Chairman Berthold Huber—a sign of organized labor’s important role in German corporate governance; Qatar Minister of State and CEO of Qatar Airways Akbar Al Bakar; Lower Saxony’s Minister of Economic Affairs Olaf Lies; and Annika Falkengren, CEO of Swedish bank Skandinaviska Enskilda Banken SEBA 3.28 % AB and one of four women on the board.

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