The Federal Trade Commission (FTC) has officially filed suit against Volkswagen after the company admitted to cheating on U.S. emissions tests. After outside testing showed that some of VW’s clean diesel vehicles were outputting up to 40x the legal amount of pollutants in the United States, the company admitted to installing devices that were able to cheat emissions tests in as many as 580,000 of their vehicles.
In addition to the 500 existing civil lawsuits against the German automaker, the FTC has filed suit against Volkswagen saying that U.S. consumers have suffered “billions of dollars in injuries” because of the company’s deceptive actions. A Volkswagen spokesperson publicly stated that the company was cooperating with U.S. regulators and will continue to do so.
A federal judge has given VW until April 21st to remedy the situation with consumers by either fixing the vehicles or providing vehicle owners with some sort of financial compensation. No word has been given on the exact solution Volkswagen has been working on, but the company says that a plan is in the works.
In a whistle-blower lawsuit that has been filed by a former Volkswagen employee in Michigan, individuals with the German carmaker have been accused of deleting electronic data not long after the Environmental Protection Agency (EPA) first accused VW of equipping its vehicles with emissions cheating software. The former employee, Daniel Donovan, was an information manager for VW in Auburn Hills, Michigan.
The lawsuit claims that he was wrongfully dismissed last December because it was suspected that he would report VW for destroying electronic data that may have been used as evidence against the automaker by U.S. authorities. The suit goes on to describe how Donovan was instructed by his superiors to tell the chief information officer not to delete electronic data on Sept. 18. According to the lawsuit, the chief information officer was upset by this and that data continued to be deleted until Sept. 21, though the claim also alleges that backup data was being destroyed even after this date.
According to Donovan’s suit, he informed his managers that deleting this data may constitute “obstruction of justice” and that he did not want to engage in the activity. The suit also alleges that outside accountants that were hired by VW complained when they were not able to access all of the information they requested. On Dec. 6, Donovan was formally dismissed from his position, a dismissal that Donovan contends was prompted by the alleged certainty that “‘[Donovan] was about to report the obstruction of justice and spoliation of evidence’” to U.S. authorities. VW maintains that the employee’s dismissal is unrelated to the emissions scandal.
This lawsuit may put even greater pressure on U.S. officials to take a harder line with VW, particularly if Volkswagen cannot find a way to fix the emissions issue for people in the U.S. who own affected vehicles by the March 24—the date on which a federal judge in San Francisco asked the German company to present a plan to solve the problem. As of now, Volkswagen is still negotiating the penalties it will have to pay with the U.S. Justice Department and the EPA for the emissions-cheating software the company equipped in some of its diesel vehicle models.
Though former Volkswagen chief executive Martin Winterkorn publically admitted that around 11 million of his company’s vehicles had been equipped with emissions-cheating software last September, it seems as though Winterkorn may have known of the problem much earlier than he said. The New York Times reports that the authenticity of documents have been verified by two people who held senior positions with VW, though they wished to remain anonymous.
Newly released internal memos and emails indicate that top managers with the German carmaker knew that affected diesel models could not be brought into compliance with emissions standards. In fact, The New York Times reports that Wintekorn was warned that regulators may eventually accuse the company of using emissions-cheating software in May of 2014, almost a full year and a half before his admission last September.
Should U.S. officials find that Volkswagen intentionally misled regulators, thereby breaking laws based on public disclosure of problems like these, the penalties levied against VW may increase. As part of that, VW may have to pay larger settlements to owners of affected diesel vehicles. The German automaker has not yet found a technical solution that is suitable for U.S. regulators and VW may have to buy back affected vehicles from owners instead.
In a statement made before the United States District Court in San Francisco, Robert Giuffra, a lawyer for Volkswagen, said that the German automaker may decide to buy back some of their diesel vehicles if the company is not able to make them comply with EPA air quality standards quickly enough. Giuffra is one of the attorneys defending VW against the class-action suits that have been filed against the carmaker by owners of affected diesel vehicles.
While the company has indicated in the past that it may eventually need to buy back some of its diesel vehicles in the United States, Giuffa’s statements are the clearest indication yet that the company simply does not have the technology necessary to fix the problem. That being said, VW has not made a definitive statement about what they intend to do for owners of affected vehicles.
At the time of the hearing in San Francisco, the number of vehicles that were known to be affected by the scandal was set at around 575,000. Since the Environmental Protection Agency brought the emissions cheating scandal to light in September and through the end of December in 2015, the value of VW diesel vehicles has dropped by a staggering 16 percent, according to data that is collected by Kelley Blue Book. Even steeper declines have been reported by some owners.
On Monday of this week, the U.S. Environmental Protection Agency (EPA) announced a new list of vehicle models that they claim are equipped with emissions-cheating software at the heart of the current Volkswagen scandal. Vehicles named by the EPA in this most recent announcement include the 2014 Volkswagen Touareg, the 2015 Porsche Cayenne, and the 2016 Audi A6 Quattro, A7 Quattro, A8, A8L, and Q5.
While other Volkswagen and Audi models have been named in connection to this scandal, this is the first time that a Porsche model has been accused of having this software installed.
Volkswagen has refuted this most recent EPA claim, and has stated that they will comply fully with the agency to investigate the matter. The company has admitted to installing illegal “defeat devices” in other Volkswagen and Audi diesel vehicles to help these cars meet U.S. emissions standards.
This illegal software allows the vehicles to sense when an emissions test is being performed, and to only engage the vehicle’s emission controls in order to pass the test. At all other times, these vehicles can emit pollutants at levels up to 40 times the country’s legal limit.
The German automaker Volkswagen has stated that more of its engines may be in violation of European pollution laws, according to The New York Times. The specific engine model, the EA 288, was already found to be in violation of the Environmental Protection Agency’s regulations and will not necessitate a broader recall in the United States. In fact, Volkswagen has stated that this development is not likely to significantly broaden the recall in Europe, though officials declined to provide any exact figures.
This is the latest development in an ongoing emissions-cheating scandal that already involves 11 million vehicles all over the world that were equipped with another of Volkswagen’s engine lines, the EA 189. These vehicles all included illegal software that would only activate the emissions controls during official emissions testing, and that would otherwise deactivate those controls in order to improve vehicle performance.
Though Volkswagen maintains that its misconduct was limited to just a few of its key executives and engineers who are responsible for outfitting their vehicles with this emissions-cheating software, the investigation into the matter has only just begun.
Volkswagen has withdrawn all 2016 models of its diesel cars from environmental certification in the U.S. due to the revelation of a second program designed to affect the emissions controls in their vehicles. Federal regulators, along with California state agencies, are investigating the recently revealed device to determine whether or not it violates American emission standards.
The head of Volkswagen’s American unit, Michael Horn, disclosed the existence of the software in testimony given before a House Energy and Commerce subcommittee. The company has stated that it failed to disclose the software and seek approval before introducing these vehicles into the market, giving this explanation as their reason for withdrawal.
According to agency spokesman Nick Conger, “VW did very recently provide E.P.A. with very preliminary information on an auxiliary emissions control device that VW said was included in one or more model years. [Regulators] are investigating the nature and purpose of this recently identified device.” Volkswagen has refused to comment on whether or not this software was designed to be a second cheat for the emissions control tests like the program that came to light in September and was able to detect when the vehicles were undergoing tests in order to minimize emissions.
According to an analysis by The Associated Press, Germany-based automotive manufacturing company Volkswagen Group has been causing the death of between five and twenty people in the United States annually in recent years, all due to its schemes of getting around emission control levels imposed by the government.
VW admitted that its vehicles have computer software which allows them to sidestep the government-mandated emissions tests designed to minimize air pollution by detecting when a test is taking place and reducing emissions during that time. The amount of pollution emitted by these vehicles when testing is not in progress may have been the cause of anywhere from 16 to 94 deaths over the past seven years in America alone.
Carnegie Mellon environmental engineer professor Peter Adams corroborated AP’s assessment, saying, “statistically, we can’t point out who died because of this policy, but some people have died or likely died as a result of this.” The computer software designed to cheat the system has allowed these vehicles to produce 10 to 40 times more nitrogen oxides than government regulations permit.
The recent Volkswagen scandal that has rocked the automotive industry is said to have started as early as 2008. Volkswagen recently admitted to installing illegal devices in their “clean diesel” vehicles that could detect when an emissions test was being performed. The devices would then activate and emit at levels that could pass the test, but actual levels of pollutants released by their vehicles were up to 40 times the legal amount.
It is said that these devices started being installed in VW vehicles in 2008 after the company realized that their diesel engines, in which they had invested millions of research dollars, could not meet regulation standards. Rather than continuing research and developing more expensive engines that could pass emission tests, VW installed the illegal devices in up to 11 million of its vehicles worldwide.
It is still unclear which company officials were involved in the scandal, but three top managers have already been suspended in addition to the company’s CEO stepping down. Volkswagen has seen intense backlash, with stock prices falling and a number of consumer suits on the horizon against the German automaker. VW promises to continue intense investigations into the scandal and is expected to release information from an internal inquiry later this week.
Last week, one of the biggest scandals in automotive history became public after Volkswagen admitted to installing illegal software in their vehicles in order to cheat emission tests. The scandal affects nearly 11 million vehicles worldwide, nearly 500,000 in the U.S. alone, and has raised 30 class action lawsuits against the company. However, many are unaware of how this scandal came to light.
In 2012, in order to perform emission tests on clean diesel vehicles, a research group at West Virginia University received a $50,000 grant from the International Council on Clean Transportation. When the research team started testing Volkswagen vehicles, the emissions levels were off by up to 35 times the expected amounts. When the data was made public a year and a half ago, many began to raise questions, including the California Air Resources Board (CARB).
CARB and the Environmental Protection Agency (EPA) began discussions with Volkswagen to uncover why there were such massive discrepancies, with VW first claiming technical issues were to blame. Only after the EPA threatened to not approve VW’s clean diesel cars for sale in 2016 did the company finally admit to deliberate cheating. As the scandal continues to develop, VW’s stock continues to plummet and the future of their clean diesel vehicles is unclear.
