General Motors, Fiat Chrysler, Toyota and Honda are happy right now.
Why? For once, they’re off the hot seat. The apoplectic bunch in Washington has turned its focus from ignition switches, delayed recalls, sticky accelerator pedals and exploding airbags, and recalibrated its missiles toward one – very large – target.
And, for once, it’s hard to blame Washington.
Volkswagen’s recent foray into the realm of corporate deception ranks as an all-time goody. It didn’t kill anyone, at least not directly; in fact, its deception may not have created a safety issue at all. Yet its actions are some of the most brazen acts of fraud I have ever heard of. Volkswagen Group is too large a company to go under because of this, but not by much.
What exactly did good ol’ VeeDub do?
Well, it lied about the emissions on its diesel vehicles. Worse than that, however, it actually installed software, called a “defeat device,” to help its vehicles pass emissions testing by the EPA. The software could detect when the car was being tested and would turn on the full emissions system (and turn it off once the test was completed). Having met emissions standards in testing, the car would then go on to emit nitrogen oxide of up to 40 times the legal limit during real-world driving. Meaning, dealers thought they were selling, and consumers thought they were buying, diesel vehicles that met EPA emissions requirements when, in fact, those vehicles were spewing toxins into the environment.
Guess who figured this out? An obscure clean air group doing testing to attempt to demonstrate that diesel is clean! When the numbers didn’t add up, the group alerted the EPA, which conducted a months-long investigation and then sent Volkswagen a Notice of Violation on September 18 that you can read here.
In less than a month, the fallout has been swift. Volkswagen Group CEO Martin Winterkorn has resigned and three top executives have been suspended. Multiple investigations are underway and lawsuits have been filed in all 50 states. Just today Standard & Poor’s downgraded VW’s credit rating.
Volkswagen had been planning a big expansion in the U.S., where it has struggled, and it has targeted a number one global sales ranking for its group of brands (including Audi, Porsche, Bentley and Lamborghini), trailing only Toyota in global sales.
Hopefully they have a Plan B.
I think my hero, Jean Jennings, said it best in a recent interview on the BBC: “calculating, cynical, cold and all about saving money.” Indeed.