Wednesday, September 30, 2015
The AP (9/30, Krisher) reports that the NHTSA on Tuesday said Fiat Chrysler failed to disclose “some deaths, injuries and other information to the agency as required by law.” Transportation Secretary Anthony Foxx “told reporters he will call a meeting in Washington with all auto industry CEOs to address a long list of failures to meet reporting requirements. In the past several years, the agency has fined Fiat Chrysler, Toyota, Honda, Hyundai, General Motors, Ford and others for failing to follow the law,” the article reports. “We need to have confidence the information we get is real and accurate information,” Foxx said. NHTSA “said its investigators found a discrepancy in reporting by Fiat Chrysler and notified the company in late July,” according to the article. “This represents a significant failure to meet a manufacturer’s safety responsibilities,” NHTSA Administrator Mark Rosekind said. “We’re still trying to uncover how deep the under-reporting is and how far back it goes,” Foxx said.
CNN Money (9/29, Isidore, Marsh, 2.15M) reports that the Fiat Chrysler’s failure to notify the NHTSA resulted in fatal accidents not getting the attention they needed. “The news is obviously troubling,” Secretary Foxx said, adding, “NHTSA is still trying to uncover how far back this goes.” The article points to the TREAD Act, which “requires car companies to notify NHTSA every three months of accidents that caused injuries or deaths” and of mechanical problems. “NHTSA will take appropriate action after gathering additional information on the scope and causes of this failure,” said Rosekind. Fiat Chrysler for its part said it “takes this issue extremely seriously, and will continue to cooperate with NHTSA to resolve this matter and ensure these issues do not reoccur.”
The New York Times (9/29, Vlasic, Subscription Publication, 11.82M) reports that Secretary Foxx said Fiat Chrysler’s admission is “troubling,” and “said it underscored the need for a meeting with automakers to emphasize the importance of safety reporting rules.” Foxx said, “We’re giving strong consideration to calling everybody in.” He explained, “There are a number of issues on the table right now that merit discussion across many of the manufacturers at this point.” New penalties could be levied against the company after it admitted to under-reporting, which was “discovered in an internal review tied to the company’s recent $105 million settlement over its handling of recalls.”
The Detroit News (9/29, Shepardson, 493K) reports that Secretary Foxx on Tuesday said that “It’s time to bring everybody in here and have a deeper conversation about go-forwards.” He added, “There are a number of issues on the table right now that probably merit discussion across many of the manufacturers. And one of them is, ‘Look folks, we have millions of people who rely on what you make every day to get from everywhere from work to putting their most precious cargo — their kids — in cars, and we need to have confidence that the information that we get is real and accurate.’” Foxx said, “We’ve fined heavily where we can. We’ve also added in on top of that consent agreements that give us greater authorities to peer behind the veil.” He has called on Congress to increase “maximum fines for failing to recall vehicles to a maximum $300 million from the current $35 million,” the article reports. Foxx said he has yet to invite automakers.
The AP (9/29) reports that Foxx said, “We need to have confidence the information we get is real and accurate information.”
The Hill (9/30, Laing, 471K) reports that in light of the recent “revelations that German automaker Volkswagen has been cheating Federal pollution emission standards to trick regulators into believing their cars are more fuel efficient than they actually are.” Foxx “said Tuesday the Environmental Protection Agency (EPA), which made the allegations against Volkswagen, is taking the lead on punishing them for their violations, which VW has admitted,” the article reports. “Because it deals with emissions, the EPA is rightly in the lead on this,” he said, adding that the NHTSA is backing the EPA’s efforts. “We’re playing an assist role here and following the lead of the colleagues at the EPA,” Foxx continued.
VW scandal highlights long history of emissions cheating by car manufacturers. The AP (9/30, Biesecker, 344K) reports that Volkswagen is not the first car company to attempt to circumvent required emissions testing, noting that since the Clean Air Act was passed in 1970, “major manufacturers of cars, trucks and heavy equipment have been busted for using what regulators call ‘defeat devices.’” According to Donald Steadman, a chemistry professor at the University of Denver “who specializes in testing the real-world emissions of cars and trucks, the economics of the automotive industry could encourage carmakers to cheat the testing process.” Steadman contended, “Every car company has an incentive to do this,” noting, “Some of them get caught.” The AP notes that in past years GM, Ford, Honda, and Volkswagen again “have been forced to pay hefty fines and recall vehicles after getting caught using defeat devices.”
Monday, September 28, 2015
NHTSA considers expanding Takata air bag recall.
Bloomberg News (9/28, Trudell, 2.66M) reports the NHTSA, which is “overseeing the replacement of Takata Corp. air bags is considering an order that would expand the recalls and has contacted seven manufacturers who could be affected.” The NHTSA said in letters dated September 22 said Takata “identified the seven as companies that it’s supplied with air bag inflators that use ammonium nitrate propellant.”
VW facing growing outrage, mounting legal challenges following debacle.
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.”
Thursday, September 24, 2015
Risk of car hacking discussed.Automobile Magazine (9/23, Floyd, 3.87M) reports on testing for hacks that make cars increasingly vulnerable. Researchers with the University of California, San Diego, and University of Washington in 2011 wrote, “We find the existence of practically exploitable vulnerabilities that permit arbitrary automotive control without requiring direct physical access.” In other words, Hackers could infiltrate and take command of a car through its cellular modem or Bluetooth connection—or even through music played in a Windows Media Audio format. Testing of Jeep Cherokee showed the car was also vulnerable to hacks. “New Federal legislation aims to establish rules designed to secure cars against hackers and protect personal data privacy,” the article reports. “Rushing to roll out the next big thing, automakers have left cars unlocked to hackers and data-trackers,” said Sen. Richard Blumenthal of Connecticut. The NHTSA forced Fiat Chrysler to recall some 1.4 million vehicles in order for consumers to have a fix installed for better protection
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.’”
Tuesday, September 22, 2015
DOJ opens criminal probe of VW’s false test results.
In its lead story, The CBS Evening News (9/21, lead story, 2:10, Pelley, 5.08M) reported the DOJ “is opening a criminal investigation into a scheme by the world’s largest car company to rig its vehicles to cheat on US emissions tests.” While Volkswagen’s CEO apologized, “sorry didn’t cut it with investors, VW’s stock dove off a cliff, down more than 17 percent in the US.” ABC World News (9/21, story 9, 0:25, Muir, 5.84M) reported that Volkswagen is facing a “possible” $18 billion fine “and perhaps criminal charges.”
The New York Times (9/22, Vlasic, Kessler, Subscription Publication, 11.82M) reports that it was only after threats from the EPA to withhold approval of 2016 Volkswagen and Audi diesel cars, Volkswagen executives admitted on Friday that its diesel vehicles utilized software that aimed to intentionally deceive pollution tests. The Times notes that under the Clean Air Act, Volkswagen could receive a penalty as high as $18 billion, which is much higher than the $35 million maximum that the NHTSA can impose.
Bloomberg News (9/22, Clothier, 2.66M) reports that on Monday night at an event for the redesigned Passat, Volkswagen’s US head, Michael Horn apologized, saying, “We have totally screwed up.” Bloomberg notes that this scandal will undo the company’s recent efforts to increase sales in the US, which have steadily declined over the last two years.
In an editorial, USA Today (9/22, 5.23M) says that the “simple word for the accusation against VW is cheating, and on a grand scale.” The company “has sold more than 480,000 ‘clean diesel’ cars with 2-liter engines to U.S. consumers since 2009.”
Government paid $51 million in subsidies for Volkswagen diesel vehicles. The Los Angeles Times (9/22, Hirsch, 4.07M) estimates that the federal government paid $51 million in green car subsidies for Volkswagen diesel vehicles in the form of tax credits to car buyers. The Natural Resources Defense Council director of clean vehicles and fuels project, Luke Tonachel encouraged regulators to take this amount into account during their investigation and any subsequent determination of a penalty for Volkswagen.
Volkswagen owners seek buyback on their diesel vehicles. Bloomberg News (9/22, Plungis, 2.66M) reports on Volkswagen customers’ reactions to the latest news, many of whom expressed their desire to be compensated for their purchase. Bloomberg writes that a recall, cash settlement, buyback may be negotiated. Edmunds.com, an online car-buying guide, advised owners to keep their cars for now since they will most likely get a lower price from a dealer. Bloomberg adds however, that some loyal Volkswagen buyers “remain skeptical” about the news, despite the company admission. CBS News (9/22, 7.05M) provides a list of the recalled Volkswagen vehicles. CBS adds that more details on recalled vehicles can be found on the National Highway Traffic Safety Administration’s website.
GM settlement carries implications for company, future cases.The New York Times (9/22, Henning, Subscription Publication, 11.82M) “White Collar Watch” analyzes the implications of the recent GM settlement on the company and the public’s perception of “how justice is dispensed for corporate wrongdoing.” According to the Times, the government has expressed that it hopes the settlement will serve as a deterrent to future companies. The Times cites Transportation Secretary Anthony Foxx’s statement, where he said, “today’s announcement sends a message to manufacturers: deception and delay are unacceptable, and the price for engaging in such behavior is high.” The piece also notes that unlike the Toyota case announcement, which was attended by then-Attorney General Eric H. Holder Jr. and Mr. Foxx, the news conference for G.M. “was notably more subdued.”
Friday, September 18, 2015
General Motors to pay US $900 million to settle ignition switch defect case.
ABC World News (9/17, story 7, 2:15, Muir, 5.84M) reported General Motors has agreed “to pay $900 million to the US government” in “one of the biggest payouts by an American car-maker in history for hiding that ignition switch defect linked to at least 124 deaths.” GM CEO Mary Barra: “We let those customers down in that situation. We didn’t do our job.” The CBS Evening News (9/17, story 4, 2:35, Pelley, 5.08M) reported GM will also pay “another $575 million to settle civil lawsuits. Criticism rained on the Justice Department because while GM admitted it concealed a fatal flaw, no one will be prosecuted.” NBC Nightly News (9/17, story 11, 0:20, Holt, 7.86M) also ran a brief report.
The New York Times (9/18, Ivory, Vlasic, Subscription Publication, 11.82M) reports that in the settlement, “no individual employees were charged, and the Justice Department agreed to defer prosecution of the company for three years.” If GM “adheres to the agreement, which includes independent monitoring of its safety practices, the company can have its record wiped clean.” US Attorney Preet Bharara “defended the settlement” at a news conference, saying, “It has been a challenging case, for the agencies, for the prosecutors and for me. We’ve had to think long and hard about the appropriate resolution in this case.”
The AP (9/18, Hays, Krisher) reports Bharara “said the investigation is still going on.” USA Today (9/18, Bomey, McCoy, 5.23M) says GM “engineers, attorneys and midlevel executives failed to fix the defect for more than a decade.” Bharara said, “They didn’t tell the truth in the best way that they should have, to their regulators, to the public, about the serious safety defects that risked life and limb.”
The Los Angeles Times (9/18, Hirsch, 4.07M) reports the DOJ “noted that ‘certain supervisors and attorneys at the company,’ in highly placed positions, had early knowledge of deadly defects with GM ignition switches, which caused crashes by suddenly shutting off moving vehicles. The supervisors chose to prioritize profits over safety, prosecutors alleged.” Bloomberg News (9/18, Hurtado, 2.66M) says GM “announced that it will resolve some civil cases arising from the recall and a shareholder lawsuit in Michigan.” GM “still faces other suits in which customers and injury victims are seeking billions of dollars.” Christy Romero, the special inspector general for the Troubled Asset Relief Program, said, “The worst part of this tragedy is that it was entirely avoidable,” as GM “could have significantly reduced the risk of this deadly defect by improving the key design for less than one dollar per vehicle.”
The Wall Street Journal (9/18, Spector, Matthews, Subscription Publication, 5.95M) reports US District Judge Alison Nathan, in approving the deal, said, “If there’s any doubt to the criminality of the conduct, that doubt is put to rest today.”The New York Times (9/18, 11.82M) reports that “federal law sets a very high standard for pursuing a criminal case against people who knowingly withhold information about the risks products pose to human life. In auto cases, prosecutors have to prove corporate officers indented to defraud someone, something they do not have to do in food and pharmaceutical cases.”