Thursday, September 24, 2015

Volkswagen CEO steps down amid emissions fraud scandal.

The CBS Evening News (9/23, story 6, 0:25, Pelley, 5.08M) reported that Volkswagen CEO Martin Winterkorn resigned on Wednesday after admitting that the world’s largest automaker fraudulently rigged 11 million diesel cars “to recognize when their emissions were being tested and automatically cheat on the test.”
        ABC World News (9/23, story 4, 1:40, Muir, 5.84M) reported that Volkswagen customers are “outraged” with “some taking action, filing lawsuits against the largest automaker in the world.” The automaker “inserted software to shut off the emission controls, except during an emission check, allowing cars to pollute up to 40 percent more than allowed.” Experts told ABC that “the value of the Volkswagen involved has gone down in the week since this emissions cheat was revealed.”
        NBC Nightly News (9/23, story 8, 1:55, Holt, 7.86M) reported that at a Volkswagen dealership in Woodland, TX, “the showroom is quiet,” as buyers are “staying away and sales have taken a nosedive.” Lance Willis, Volkswagen of the Woodlands General Manager: “Well literally we went from selling 13 new cars on Saturday and one yesterday.” NBC (Shamlian) added that Volkswagen “has admitted cheating by rigging millions of diesel models from 2009 to 2015, making them appear much less polluting then they are.” Volkswagen “has apologized and is promising swift action.”
        The New York Times (9/24, Smale, Subscription Publication, 11.82M) reports that as Germany “has emerged as the dominant actor in Europe, it has lectured Greece and other debtor nations on the virtues of thrift and lately wagged its finger at countries that balk at receiving a share of refugees from the killing fields of Syria,” and the nation’s “right to lead, based on a narrative of self-sacrifice and obedience to rules, was generally acknowledged,” which is “one reason the Volkswagen scandal has shaken the country’s very core.” The “disclosure of systematic cheating by one of Germany’s most iconic companies has delivered a sharp blow to its conception of itself as an orderly nation and tarnished its claim to moral leadership of the Continent.”
        The Wall Street Journal (9/24, Boston, Subscription Publication, 5.95M) reports that Volkswagen AG looked to get ahead of its widening emissions testing scandal on Wednesday, forcing out CEO Martin Winterkorn. The crisis comes after the company disclosed on Tuesday that as many as 11 million cars contain software apparently designed to fool emissions tests, far more than previously announced. Reuters (9/23) says that the move was not surprisingly, as calls for Winterkorn’s resignation have grown in recent days. The New York Times (9/23, Ewing, Subscription Publication, 11.82M) reports that Winterkorn said, “As C.E.O. I accept responsibility for the irregularities that have been found in diesel engines,” though he added, “I am not aware of any wrongdoing on my part.”
        USA Today (9/23, Woodyard, 5.23M) says that Winterkorn’s departure “is sure to be just the start of a purge of executives and engineers in the wake of the automaker’s emissions cheating scandal.” While Winterkorn “had promised a thorough outside examination of the debacle that has diminished Volkswagen’s reputation and is sure to cost it billions, the company itself is yet to divulge what it knows about how the deception was perpetrated.” CNN Money (9/23, Isidore, 2.15M) reports that Volkswagen “already faces a raft of 34 federal lawsuits from people claiming their cars are less valuable” due to the scandal.
        The AP (9/24) reports that German Vice Chancellor Sigmar Gabriel “said after the resignation of Volkswagen’s CEO that it’s important now for the scandal to be cleared up completely — ‘by the company itself, as well as through cooperation by Germany and the company with American prosecutors and the American authorities.’”
        Lawsuits filed against Volkswagen in Vermont, Missouri, Kentucky. The AP (9/24, Gram) reports from Montpelier, VT that Volkswagen “has been sued in Vermont over allegations the German automaker falsified emissions testing in its so-called “clean diesel” vehicles, a leading law firm in the state announced Wednesday.” Tristram Coffin, “a lawyer with Downs Rachlin Martin and a former Vermont U.S. attorney, said Charlotte resident Robert Turnau would be the lead plaintiff in the class-action lawsuit. Turnau bought a VW Jetta TDI with a diesel engine in September of 2013.” The suit “was the first sign of significant fallout in Vermont from the admission by Volkswagen that it had rigged diesel emissions to pass U.S. Environmental Protection Agency tests.”
        The St. Louis Post-Dispatch (9/24, 968K) reports that “the race to the courthouse has begun among class action attorneys looking to sue Volkswagen over its effort to defeat emissions requirements on its diesel engine vehicles.” The Clayton, MO law firm of Jacobson Press & Fields “filed a lawsuit on behalf of all owners of diesel Volkswagens in Missouri.” The Post-Dispatch notes the Vermont lawsuit.
        The Louisville (KY) Courier-Journal (9/24, 414K) reports that a Louisville, Kentucky resident Robert Wagner is aiming to create a class action lawsuit against Volkswagen. Wagner bought a Volkswagen Golf SportWagen that purportedly featured clean diesel technology in May this year, but “would not have done so or would have paid less had he known of the pollution problems made public by a new U.S. Environmental Protection Agency enforcement action.” The Courier Journal notes that the lawsuit is one of many “anticipated to be filed in the wake of Friday’s enforcement action against VW.”
        “Defeat devices” not a new phenomenon, others may be doing the same. A common theme in the media is that Volkswagen’s actions are by no means unusual, and the scandal may come to encompass others. Bloomberg News (9/24, Plungis, 2.66M) reports that “almost as soon as governments began testing vehicle emissions, automakers found ways to cheat.” Clarence Ditlow of the Center for Auto Safety said, “The concept of a defeat device has always been there, because there’s such an incentive for the manufacturers to cheat on the emissions tests.” Similarly, Jalopnik (9/24, George, 579K) reports that the European Federation for Transport and Environment “issued a report this month, before Dieselgate blew up, raising ‘doubts about the integrity of Europe’s emissions testing.’” The group says that tests “show clear discrepancies between laboratory emissions and real-world performance for several automakers including BMW, Mercedes-Benz and General Motors’ Opel unit.” The New York Times (9/24, Hakim, Tabuchi, Subscription Publication, 11.82M) reports that “long before” this scandal broke, “the automobile industry, Volkswagen included, had a well-known record of sidestepping regulation and even duping regulators. For decades, car companies found ways to rig mileage and emissions testing data.”
        Reuters (9/23, Lewis, Frost) reports that that the scandal has also drawn attention to gaps in European testing, along with calls to close those loopholes.
        Looking at the origins of the scandal, USA Today (9/23, 5.23M) reports that European regulators “didn’t act after real-world emissions results were published last year showing a dozen diesel car models were an average of seven times dirtier than the standards were supposed to allow.” So “tests were conducted on three models in the U.S. – two Volkswagens and a BMW – which eventually led to the VW’s admission that it rigged 11 million cars worldwide in a way that allows them to beat emissions certification tests.”
        Meanwhile, the “Wonkblog” for the Washington Post (9/24, Ehrenfreund, 6.76M) reports that testing by Gary Bishop at the University of Denver tests real-world emissions, and says that testing has little impact on actual air pollution.
        The Wall Street Journal (9/24, Subscription Publication, 5.95M) editorializes that although Volkswagen deserves approbation if the charges are true, the motive for installing the software points to the problem of over-regulation by US environmental authorities.
        BMW diesel’s emissions reportedly exceeded EU limit. Bloomberg News (9/24, Kresge, 2.66M) reports that BMW AG “fell as much as 7.3 percent after a German newspaper reported that its X3 xDrive 20d sport utility vehicle emitted as much as 11 times the European limit for air pollution in a road test.” The SUV “was road-tested by the International Council on Clean Transportation, the same group whose tipoff led U.S. regulators to investigate a gap between Volkswagen AG diesels’ emissions in tests and on the road, Germany’s Autobild reported.” BMW said “that there’s no system in its cars that responds to tests differently than it would operate on the road. ‘There is no function to recognize emissions testing cycles at BMW,’ the Munich-based company said in a statement. ‘All emissions systems remain active outside the testing cycles.’” 

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