Earlier this week, German automaker Volkswagen was exposed for perpetrating a massive deception by installing a small device on as many as 11 million diesel-powered vehicles designed to cheat emissions tests. This egregious example of corporate malfeasance was discovered not by government regulators and inspectors, whose job it was – but by two engineers in different countries, working for a little-known non-profit laboratory.
Peter Mock of Berlin, Germany, and John German of Ann Arbor, Michigan, work for the International Council on Clean Transportation (ICCT). The organization’s mission as stated at the ICCT website is to “provide first-rate, unbiased research and technical and scientific analysis to environmental regulators.”
Mock became suspicious when test results on diesel-powered vehicles in Europe were inconsistent. The tests were intended to convince European environmental regulators to loosen restrictions on the sale of diesel cars by verifying claims that their engines ran on “clean diesel.” Two of the models tested – the Volkswagen Jetta and Passat – passed emissions tests in the lab, but were still emitting unacceptably high levels of pollutants under real-world driving conditions. Since US clean air standards are higher than those in the EU, Mock contacted his American colleague. Would identical testing on vehicles made for the US market produce the same results?
German told Bloomberg News, “We had no cause for suspicion…we thought the vehicles would be clean.” The vehicles passed emissions tests at laboratories of the California Air Resources Board. Then, the vehicles were equipped with portable emission detection systems – something that was not available in the EU. Test drivers from West Virginia University then took the vehicles for a 1,300-mile road trip up the West Coast, from San Diego to Seattle. It was this test that exposed Volkswagen’s deception. When driven on the open road for extended periods of time, the vehicles gave off high levels of nitrous oxide, a major pollutant and greenhouse gas.
By now, the story of VW’s “defeat devices” is all over the media. Removing nitrous oxide from diesel emissions is indeed possible, but comes at a cost in terms of vehicle performance. VW’s device included software and sensors that turned off emissions controls when the car was operated for long periods of time under varying conditions.
This is not the first time that the auto industry has attempted to cheat and bypass environmental regulations. Such devices have been used by many automakers since early 1970s, when environmental agencies started regulating automotive emissions. In fact, this is the second time VW has been caught. In 1973, the company was fined $120,000 (approximately $663,000 in today’s dollars) for secretly installing a device that shut down pollution controls. Prior to that, Ford Motor Company was caught gaming emissions tests by ensuring their vehicles received extra maintenance that would not normally have been performed under everyday conditions. In 1974, Chrysler was caught installing its own “defeat devices” in vehicle radiators.
Not surprisingly, auto company executives have bristled at environmental and car safety regulations for decades. Over the years, there have been an appalling number of deceptions and schemes perpetrated in the auto industry in attempts to skirt the law. Tragically, these corporate schemes have resulted in deaths. One of the most infamous cases involved the 1978 Ford Pinto, which was equipped with a gasoline tank that too easily could catch fire in a collision. Most recently, the Levin-Papantonio law firm has been involved in litigation over defective airbags manufactured by Takata, which have caused injury and death when they deploy unexpectedly.
The problem – up until now – is that fines and penalties have been so light that these corporate offenders are able to simply write them off as the cost of doing business. Furthermore, auto industry lobbyists have made certain that neither the Environmental Protection Agency (EPA) nor the National Highway Traffic Safety Administration (NHTSA) have power to impose criminal penalties. Jill Claybrook, a former NHTSA administrator and auto safety advocate, told the New York Times:
[NHTSA] has no specific criminal penalty for selling defective or noncompliant vehicles…I don’t see them changing this behavior unless criminal penalties are enacted into law that allow the prosecutor to put the executives in jail.
Fortunately, the US Department of Justice does have the power to pursue criminal charges against corporate executives responsible for such violations. The Department’s Environmental and Natural Resources Division has opened a criminal investigation of Volkswagen in the US, and will be coordinating its efforts with Germany’s Federal Ministry of Justice. Government agencies in other countries may start their own investigations as well.
At the same time, Volkswagen stock has plummeted, and the company has lost all credibility with consumers. It may take years for Volkswagen to recover – if the company ever does. The lawsuits against Volkswagen are mounting at a rapid pace. In the United States, more than 500,000 vehicles are impacted by Volkswagen’s fraud:
- Volkswagen Golf (2009-2015 model years)
- Volkswagen Jetta (2009-2015 model years)
- Volkswagen New Beetle (2009-2015 model years)
- Volkswagen Passat (2014-2015 model years)
- Audi A3 (2009-2015 model years)
There is no easy answer for Volkswagen to now fix its deception. The vehicles are illegal in America. Thus, they must be fixed. However, there aren’t any easy solutions, and the available ones are not good. For example, one fix could be the mandatory recall of the car to reprogram the engine. This likely would make the car less responsive, and less fuel efficient. A second potential fix includes adding an entirely new tank of chemical reagent to the car, which would have to be filled and maintained by the owner.
The law firm of Levin Papantonio is presently handling emission fraud litigation against Volkswagen. Attorney Troy Rafferty, who is leading up the litigation, says the ultimate damages to Volkswagen easily could exceed $40 billion, when considering compensation to those defrauded, legal fees and costs, and criminal and civil penalties. This does not include the immense loss in sales of vehicles as a result of its now negative perception.
What is significant about this story is that government agencies are only now catching on to the situation and taking action. Had it not been for two dedicated engineers working for a relatively obscure, non-profit organization, Volkswagen would still be perpetuating its deception, padding its own bottom line at the expense of human health and the environment.