emissions scandal

Blog Archives

VW PR chief takes the blame

Thomas Steg – Volkswagen’s head of external relations and sustainability

Automaker Volkswagen’s head of external relations and sustainability has stepped aside from his duties after the recent controversy over experiments in which humans and monkeys were exposed to diesel exhaust.

Matthias Mueller – chief executive of Volkswagen

 “We are currently in the process of investigating the work of the EUGT, which was dissolved in 2017, and drawing all the necessary consequences. Mr. Steg has declared that he will assume full responsibility. I respect his decision,” said the CEO of Volkswagen, Matthias Müller.

Ms. Merkel, through her spokesman, was among the political leaders and auto industry executives who in recent days condemned the experiments at a lab in Albuquerque, in which monkeys were exposed to diesel exhaust.

The project was financed by German carmakers, who wanted to show that diesel cars were less of a threat to human health than groups such as the World Health Organization have claimed.

A separate project also financed by the carmakers subjected human volunteers in Germany to doses of nitrogen dioxide, one of diesel’s most noxious by-products.

Environmental groups and other critics of Volkswagen said the suspension of Mr. Steg, whose formal title at Volkswagen is head of external relations and sustainability, made him a sacrificial lamb meant to insulate the company’s top managers from consequences.

These critics drew parallels with the Volkswagen emissions scandal, in which the company initially said that a small number of rogue engineers were responsible for installing software intended to dupe regulators. German prosecutors have since identified dozens of suspects.

“They are again playing the game where the subordinates were the culprits,” said Christian Strenger, a former member of a commission that wrote Germany’s rules on corporate governance. Mr. Strenger is among the people suing Volkswagen for violating its legal obligations to shareholders.

The experiments that preceded Mr. Steg’s suspension were conducted at a laboratory in Albuquerque for the European Research Group on Environment and Health in the Transport Sector, known by its German initials, E.U.G.T.

The organisation was financed entirely by Volkswagen, Daimler and BMW. (Bosch, a major German auto parts supplier, had been a member but dropped out in 2013.)

In recent days, the three carmakers have repudiated the work of the group, even though all three were represented on the organisation’s five-person board of directors, and all three contributed money to the group.

Matthias Müller, Volkswagen’s chief executive, said in a statement Tuesday that the company is conducting a thorough investigation of the research “and will draw all the necessary consequences.”

Tagged with: , ,

VW Exec gets seven years

Oliver Schmidt, Volkswagen AG executive, was sentenced to seven years in prison and fined US$400,000 by a judge yesterday.

Oliver Schmidt earlier this year.

He was involved in a diesel emissions scandal that cost the car maker nearly thirty billion. 

Schmidt oversaw the company’s environmental and engineering office, until February 2015, where he oversaw emissions issues.

The sentence and fine for the executive were the maximum possible under a plea deal in August.

“It is my opinion that you are a key conspirator in this scheme to defraud the United States,” U.S. District Judge Sean Cox of Detroit told Schmidt in court.

“You saw this as your opportunity to shine … and climb the corporate ladder at VW.”

In March, Volkswagen pleaded guilty to three felony counts under a plea agreement to resolve U.S. charges that it installed secret software in vehicles to elude emissions tests.

U.S. prosecutors have charged eight current and former Volkswagen executives. Six of those remain at large.

The auto industry is still feeling the effects of Volkswagen’s diesel cheating.

Regulators around the world are currently investigating other carmakers for potential violations of diesel emissions rules.

On Wednesday, German prosecutors said they had begun an initial inquiry into BMW AG, as it is speculated that the automaker is selling a vehicle that emits up to seven times the allowed levels of smog-forming nitrogen oxides.

Tagged with: , ,

Volkswagen ‘misused me’

Volkswagen AG executive, Oliver Schmidt, who is due to be sentenced this week in connection with the emissions scandal, has written to the judge to say he feels “misused” by VW.

Volkswagen pleaded guilty to three felony counts under a plea agreement to resolve U.S. charges it installed secret software in vehicles to evade emissions tests.

Schmidt has pleaded guilty in the U.S. District Court to wrongdoing associated with the emission scandal that has cost the German car maker around $30 billion. 

After being informed of the existence of the emissions software in the summer of 2015, according to his guilty plea, Schmidt conspired with other executives to avoid disclosing “intentional cheating” by the automaker in a bid to seek regulatory approval for its model 2016 VW 2 liter diesels.

The letter, originally published by German newspaper Bild am Sonnstag, Schmidt says “I must say that I feel misused by my own company in the diesel scandal or ‘Dieselgate’.”

Schmidt faces up to seven years in prison and a fine of between $40,000 and $400,000 after admitting to conspiring to mislead U.S regulators and violating clean air laws.

He is due to be sentence on December 6 2017.

Tagged with: , ,

Audi recalls 5000 diesel cars

Audi is recalling around 5000 cars in Europe for a software fix after discovering they emitted too much nitrogen oxide, the polluting gas that Volkswagen hid from U.S. regulators in the 2015 “dieselgate” scandal.

In 2015 Volkswagen was found to have manipulated engine software so that the vehicles would meet the correct nitrogen oxide standards in laboratory testing but not in real-world conditions. 

 The carmaker said yesterday that they had reported the issue to Germany’s road transport authority KBA, which was concerned about the possible illegal manipulation of emission levels.

Audi said it would update the software of the 4997 A8 model vehicles with 4.2 litre V8 diesel engines, which were made between September 2013 and August 2017.

The software updates will likely be available in the first quarter of 2018 after winter testing.

“During the testing, it will be ensured that the new software has no disadvantages for customers in terms of fuel consumption or performance.”



Tagged with: , ,

VW’s emissions scandal bill hits $30bn

Amid arrests, falling share prices and continued uncertainty, Volkswagen’s bill from the ongoing emissions scandal has reached USD$30 Billion.

Reuters reports that on Thursday, German prosecutors arrested Wolfgang Hatz, the first top executive within the group to be detained amid a widening probe into cheating at VW’s Audi brand.

Wolfgang Hatz, arrested on Thursday by German prosecutors for his senior level role in VW’s emissions cheating scandal.

VW’s growing financial woes and Hatz’s arrest were also discussed on Friday at a regular meeting of the carmaker’s supervisory board, one person familiar with the matter said.

VW shares fell as much as 3 per cent on Friday, as traders and analysts reacted to the continuing fallout from the scandal.

VW, Europe’s biggest automaker, admitted in September 2015 that it had used illegal software to cheat U.S. diesel emissions tests, sparking the biggest business crisis in its 80-year history. Before Friday, it had set aside 22.6 billion euros ($26.7 billion) to cover costs such as fines and vehicle refits.

Last year, VW agreed with U.S. authorities to spend up to $15.3 billion to buy back or fix up to 475,000 2.0-litre polluting diesel cars.

On Friday, VW said it was extending the timeline and setting aside an additional 2.5 billion euros (USD$3.0 billion) as hardware. VW says the complications will amount to 5,200 euros per car.

“We have to do more with the hardware,” a VW spokesman said.

In Europe, where only a software update is required for the 8.5 million affected cars, plus a minor component integration for about 3.7 million 1.6-litre vehicles included in that number, fixes are running smoothly, the spokesman added.

The additional provision will be reflected in third-quarter results due on October 27, VW said.



Tagged with: , , ,

German car makers in emissions deal

Emissions have reached toxic levels in many parts of Germany

Politicians and car makers in Germany have agreed to completely overhaul engine software on 5.3 million diesel vehicles in a bid to cut pollution, avoid a ban on diesels and repair the industry’s reputation in Europe.

Justice Minister Heiko Mass told the German newspaper Bild that the agreement was only the first step in an ongoing process, and bans on diesel vehicles in the future would not be ruled out.

“The legal requirements for clean air remain in effect,” he told journalists.

Air pollution has significantly decreased over the past decade, but is still breaching current standards.

In February, the EU Commission found limits for the deadly nitrogen dioxide pollution were exceeded 28 areas of Germany, and was responsible for 10,610 premature German deaths in 2013.

Chancellor Angela Merkel’s government has come under increasing pressure for not doing enough to crack down on vehicle pollution, with Merkel’s close relationship to auto executives heavily criticised.  

However, ministers have been cautious about disrupting the auto industry, which provides 800,000 jobs, and is Germany’s biggest exporter.

“We expect a new culture of responsibility from carmakers,” Environment Minister Barbara Hendricks, from the centre-left Social Democrats, said at a news conference.

“There is much to make good – to the environment, to people in cities, car owners and not least to the security of the car industry in Germany and its hundreds of thousands of jobs.”

The German Association of the Automotive Industry (VDA) said the software updates would cut nitrous oxide emissions by 25-30 per cent for the 5.3 million affected cars.

The software update is expected to cost Volkwagen, Daimler and BMW a combined $800 million.

The popularity of diesel vehicles in the EU’s largest market is falling as a result of the ongoing emissions scandal. German diesel car sales fell 12 per cent in July, and diesel now makes up 40.5 per cent of new car sales, down from 46 per cent in 2016.

Tagged with: , , , , , , ,

Mercedes to recall entire EU diesel fleet

Daimler chief executive Dieter Zetsche

Virtually Mercedes-Benz diesel vehicle sold in the EU since 2011 will be recalled, Daimler has announced.

The move comes after allegations that the Mercedes-Benz had faked emissions tests were published in a German newspaper last week, and an investigation into Daimler in May.

Daimler refuses to say the announcement is a recall, dubbing it a “service action” in a statement.

Owners of nearly every model produced since 2011 will be asked to return their cars to their local dealer so the engine can be adjusted to reduce emissions.

Altering the 3 million cars on European roads will cost the German car maker $346 million, the Telegraph reports. The recall includes popular C-Class and E-Class Mercedes vehicles.

“The public debate about diesel engines is creating uncertainty,” chief executive of Daimler Dieter Zetsche said in a statement.

“We have therefore decided on additional measures to reassure drivers of diesel cars and to strengthen confidence in diesel technology.”’

The software update is expected to take approximately an hour, and will extend emissions controls on the engine so it will activate under wider conditions.

Zetsche said the action wasn’t the end of the diesel engine for Mercedes, and that the company is “convinced that diesel engines will continue to be a fixed element of the drive-system mix, not least due to their low CO2 emissions.”

Tagged with: , , , ,

Mercedes-Benz under investigation

A German newspaper has reported that Mercedes-Benz is under investigation for possibly selling over a million cars with excess emissions in Europe and the US.

The Sueddeutsche Zeitung, citing a search warrant issued by a court in Stuttgart, Germanny, says prosecutors were examining the possible use of illegal software to manipulate emissions test results in Mercedes-Benz vehicles between 2008 and 2016.

Both the prosecutor and Daimer, Mercedes’ parent company, declined to comment to Reuters regarding the report, but Daimler said the firm was fully cooperating with authorities and did not believe cars will lose certification.

“We take comfort from the fact that this is a European issue, not a US investigation. We also do not believe these Merc cars will lose their certification,” analysts from Bernstein Research told Reuters. “Our judgement is that Merc will be asked to recall these cars for a ‘software fix.’”

Bernstein estimated that if Daimler faced penalties at a similar per-car level to Volkswagen, the total fine would amount to $275 million to $400 million.

Stuttgart prosecutors conducted raids on 11 different sites in Germany as part of a wider probe into possible excess diesel emission from Daimler, and two employees are under investigation.

Mercedes-Benz has dropped plans to seek US approval to sell its 2017 diesel models, and investigations from the US Justice Department and Environmental Protection Agency (EPA) are ongoing.

Tagged with: , , ,

VW faces legal action

A group representing 180,000 car owners in Europe is seeking a full refund of Volkswagen vehicles affected by the scandal at an estimated cost of $6.9 billion, the Financial Times has reported.

Patrick Haas of AKD, a law firm based in Rotterdam, is serving as legal counsel for the Stiching Volkswagen Car Claim Foundation, which was established in October 2015.

Despite the successful case against Volkswagen in the US, the German car maker has denied breaking any laws in Europe and has refused to offer buyers compensation.

Experts have said there is a slim chance of successful litigation after Germany’s transport ministry approved a recall last December to ensure all affected cars would meet legal requirements and emissions standards.

Haas, however, said this latest recall does not fix the emission issue, and there is “still a big gap between lab conditions and real road conditions.” The group hopes to bring the case to court this spring.

Another legal representative, Damon Parker from Harcus Sinclair in the UK, told the Financial Times that “VW is forcing everyone to launch claims in their own jurisdictions,” and the group was attempting to bypass this by creating a “pan-European alliance.”

“We do not see a legal basis for customer actions,” Volkswagen said in a statement. “All vehicles affected are and have been technically safe and roadworthy. They can be driven on roads without any limitations and can be sold without loss in residual value. The required authorisations remain valid.”

Tagged with: , , ,

Audi accused of more emissions cheating

The German government has accusing Audi of cheating emissions tests with its top-end models. It’s the first time Audi has been accused of emissions cheating in its home country.

The German transport ministry has asked Audi to recall around 24,000 A7 and A8 models built between 2009 and 2013, around half of which were sold in Germany, Reuters reports.

A ministry spokesman told Reuters that VW CEO Matthias Mueller was summoned to the transport ministry, but didn’t elaborate.

The ministry said that recalled Audi models which were supposedly Euro-5 emission standards but in fact emitted twice the legal limit of nitrogen oxide when the steering wheel is turned more than 15 degrees.

The ministry has also issued a deadline of June 12 for Audi to come up with a plan to refit the affected cars. Audi issued a recall for the affected cars on Thursday, and said software updates will start in July.

An Audi source told Reuters the discrepancy in emissions is due to a faulty interaction between transmission and engine control units, and a proposal for a fix has already been submitted to the KBA.

Tagged with: , , ,

Researchers find VW ‘defeat device’

A team of researchers from around the world have found the code buried deep in onboard software which enabled Volkswagen to circumvent American and European emissions tests for over six years before allegations of cheating surfaced in 2015.

The researchers, led by computer scientist Krill Levchenko from the University of California San Diego, obtained copies of Volkswagen onboard software from the company’s own maintenance website and from various forums online run by car enthusiasts, said the UC San Diego News Centre.

“We found evidence of the fraud right there in public view,” Levchenko said. “We found the system and how it was used.”

The code allowed the car’s onboard computer to determine the vehicle was undergoing an emissions test, and then activate emission-curbing systems to lower the pollutants emitted.

When a car is tested for emissions levels, it is placed on a chassis equipped with a dynamometer, which measures the engine’s power output. The test then begins a specific speed profile designed to imitate real-world urban driving with frequent stops.

Because the conditions for this test are standard across all stations, and publicly available, manufacturers are able to anticipate the exact conditions of the test. The code found in Volkswagen vehicles checks the speed, distance, and wheel position, and if it matches the conditions of the emissions test, the code will allow the onboard computer to activate the emissions-curbing system.

When the test was over, the onboard computer then deactivated these systems. Cars emitted up to 40 times the amount of nitrogen oxide allowed under US regulations once the emissions-curbing software was deactivated.

 “The Volkswagen defeat device is arguably the most complex in automotive history,” Levchenko said.

Tagged with: , ,