VW’s U.S. Chief Apologizes for Diesel Dupe: ‘We Screwed Up’

22 Sep 2015 | Author: | No comments yet »

For 7 years, Volkswagen used illegal software to thwart pollution regulations.

The US chief executive of Volkswagen has said the company has “totally screwed up” over the emissions scandal that has rocked the automotive industry. Detroit: Volkswagen became the world’s top-selling carmaker trumpeting the environmental friendliness, fuel efficiency and high performance of diesel-powered vehicles that met America’s tough Clean Air laws.

The world’s second-biggest carmaker could face a fine of up to $18bn (£11.6bn), criminal charges for its executives, and legal action from customers and shareholders due to US claims it used a defeat device to falsify emissions data. The software turned on the cars’ full emissions control systems when the cars were being tested by the government, and then turned off those systems during normal driving. (Source: AP photo) German automaker Volkswagen AG admits that it rigged U.S. emissions tests so it would appear that its diesel-powered cars were emitting fewer nitrogen oxides, which can contribute to ozone buildup and respiratory illness. VW’s success story was so good that pollution-control advocates did their own tests, hoping to persuade other countries to enforce the same strict standards. Investors dumped the firm’s shares after it was accused by America’s Environmental Protection Agency (EPA) of cheating emission tests on its diesel-powered vehicles. The device recognises when the car is being tested and immediately cuts emissions to a level that is much lower than normal and unsustainable under usual driving conditions.

In further developments, South Korea said on Tuesday it would investigate emissions of the VW Jetta and Gold models plus Audi A3 cars produced in 2014 and 2015. VW got away with this scheme for seven years, and according to the EPA, didn’t come clean even when repeatedly confronted with evidence of excessive pollution. If problems are found, South Korea’s environment ministry said its inquiry could be expanded to all German diesel imports, which have surged in popularity in recent years in a market long dominated by local producers such as Hyundai. The House energy and commerce committee chairman, Fred Upton, and the oversight and investigations subcommittee chairman, Tim Murphy, announced that the Oversight and Investigations Subcommittee will hold a hearing. Horn, speaking at an event to launch a new version of the Passat sedan, which featured rock star Lenny Kravitz, said: “Our company was dishonest with the EPA, and the California Air Resources Board and with all of you, and in my German words: we have totally screwed up. “We must fix the cars to prevent this from ever happening again and we have to make this right.

The EPA Volkswagen Group CEO Martin Winterkorn issued a statement Sunday saying that the company will fully cooperate with government investigations and has ordered an internal probe. One of the officials involved in uncovering the alleged behaviour has told the Guardian that the emissions-fixing scandal could extend to other companies and countries. Instead, VW used secret software — an algorithm that detects when cars are being tested on treadmill-like devices called dynamometers, and stealthily switches the engines to a cleaner mode. Billions of pounds have been wiped off the value of global carmakers amid growing concerns that emissions tests may have been rigged across the industry. “We need to ask the question, is this happening in other countries and is this happening at other manufacturers?

Experts think Volkswagen may have wanted to avoid the cost of additional hardware to meet tough U.S. emissions standards, so it came up with a cheaper software fix. Experts say that the recall of 500,000 cars sold in America as a result of cheating the emissions test may grow in size in the weeks and months to come. The software also would have helped the cars’ fuel economy numbers, since they get better gas mileage when the emissions control system is turned off. A British expert in low-emission vehicles claimed the manipulation of air pollution data could be “very widespread” and that tests in Europe are “much more open to this sort of abuse”.

European regulators announced parallel investigations, and the EPA said it is expanding its probe to make sure other automakers aren’t using similar devices. And at the White House, spokesman Josh Earnest said “we are quite concerned by some of the reports that we’ve seen about the conduct of this particular company.” “I’d be surprised if Winterkorn can ride this out, but in Germany there’s often a slightly slower process in these matters,” said Christian Stadler, a professor of strategic management at Warwick Business School.

Winterkorn is an engineer by training who led research and development across the VW group beginning in 2007, and became chairman of the management board the same year. On Sept. 9, without making any reference to VW, the Justice Department announced a renewed commitment to holding individual executives accountable for corporate wrongdoing. These testing companies have been verified by regulators in each country, such as the Vehicle Certification Agency, but in the US the tests are conducted by an independent body.

And when the EPA announced VW’s violations on Friday, it noted that in addition to the corporate fines of $37,500 per vehicle, individuals could be fined $3,750 per violation of the Clean Air Act. Industry leaders in Britain claimed there was “no evidence” that manufacturers are cheating the system in Europe but admitted it needs to be reformed. Winterkorn could also face scrutiny from Volkswagen’s board, which meets Friday, and investors, who watched the company’s shares plunge 17.1 percent Monday to a three-year low. There is no evidence that manufacturers cheat the cycle. “The industry acknowledges, however, that the current test method is outdated and is seeking agreement from the European commission for a new emissions test that embraces new testing technologies and is more representative of on-road conditions.” The US allegations involve a series of diesel cars produced by VW and the brands it owns, such as Audi.

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