Monday, September 28, 2015
In continuing coverage of the Volkswagen emissions debacle affecting more than 11 million vehicles worldwide, the AP (9/28, Krisher) reports on the increasing outrage against the auto manufacturer, saying that the company will need to pay more than the $7.3 billion it has set aside for the scandal. According to the AP, experts said that the company must find a balance between appeasing regulators, ensuring customer satisfaction and minimizing cash expenses. A cheap fix could antagonize customers further by reducing performance, while a better solution, that maintains performance, could cost as much as $20 billion.
The AP (9/28) also reports on the significant legal problems likely to face Volkswagen, noting that state and federal officials are investigating questions regarding “Who knew about the deception, when did they know it and who directed it.” According to David M. Uhlmann, former chief of the Environmental Crimes Section at the Department of Justice, “the company and any individuals involved could face criminal charges under the Clean Air Act, and for conspiracy, fraud and false statements.” William Carter, a former general counsel of the California Environmental Protection Agency, said in a statement, “They’re facing a tsunami of possible state and federal enforcement actions, and a potential large number of violations — including administrative, civil and criminal.” Commenting on the investigative procedure, Gregory Linsin, a former environmental crimes prosecutor at the Justice Department, said, “If a software package such as this were intentionally designed to defeat the emissions testing, there may well be email traffic, meetings, records that would establish that intent.”
USA Today (9/27, Phelan, 5.23M) reports that the act of premeditation separates the recent Volkswagen debacle from prior emissions scandals, noting, “Volkswagen set out to cheat emissions tests and sell cars that would damage human health and the environment.” In contrast, “other automakers seemed legitimately baffled and eager to address their crises.”
Volkswagen’s use of software to meet emissions tests examined. The New York Times (9/27, Danny, Hakim, Kessler, Ewing, Subscription Publication, 11.82M) reports on Volkswagen’s use of software to beat emissions tests, offering a history of the situation and possible reasons for the effort including quoting one expert as saying that the company may have thought it could develop technology to meet emissions standards and the software was installed as a stopgap, but the hoped-for technical improvements failed to arrive.
The Detroit Free Press (9/26, Phelan, 910K) reports that Volkswagen’s action is “worse than GM’s ignition switches, Toyota’s runaway cars or Ford-Firestone’s exploding tires” because the company “set out to cheat emissions tests and sell cars that would damage human health and the environment.”
Reuters (9/27, Barkin) reports that it shows how closely the German government and automotive industry are, that while European officials had supposedly been aware of the difference between actual driving results and emissions tests, they had not investigated.
The Detroit Free Press (9/26, Priddle, 910K) reports that the US consumer’s interest in diesels is likely to be weakened as a result.
The San Diego Union-Tribune (9/26, McSwain, 542K) reports that owners of the relevant cars are looking for those responsible.
EPA announces tough new emissions testing on diesel cars following Volkswagen scandal. Emissions testing will be conducted on “every model of diesel car on the road to see if other automakers programmed their cars to skirt the tests like the Volkswagen Group did,” as the EPA seeks to root out companies trying to cheat emissions testing, The Hill (9/25, Cama, 471K) reports. The EPA transportation director, Chris Grundler, stated on Friday, “We’re putting vehicle manufacturers on notice that our testing is now going to include additional evaluation and tests designed to look for potential defeat devices.”
Reuters (9/26, Gardner, Morgan, Schectman) suggests the stricter rules could result in more expensive recalls for automakers.
Also providing coverage were US News & World Report (9/25, Neuhauser, 811K), the Chicago (IL) Tribune (9/26, Harris, 2.46M), AFP (9/26), and MarketWatch (9/26, Beene, 901K).
Justice Department: “Working closely with the EPA” on Volkswagen investigation. CNBC (9/25, Imbert, 1.79M) reported the Justice Department on Friday said in a statement that it “is working closely with the EPA in the investigation into” Volkswagen, asserting “We take these allegations, and their potential implications for public health and air pollution in the United States, very seriously.” CNN Money (9/25, Kottasova, 2.15M) discussed the likelihood of any VW employees will face prison time over the emissions fraud.
Bloomberg News (9/25, Plungis, 2.66M) also reported.Pension fund sues Volkswagen over plummeting shares. Bloomberg News (9/25, Pearson, 2.66M) reported a Michigan pension fund is suing Volkswagen AG “In what may be the first investor suit over Volkswagen’s use of so-called defeat device software to pass smog tests” for allegedly “scheming to defraud U.S. investors who paid artificially inflated prices for the company’s foreign shares.”