Diesel Volkswagen

Published on March 25th, 2016 | by Steve Hanley

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Volkswagen Went To Court This Week, Here’s What Happened

March 25th, 2016 by  
 

The saga of the Volkswagen diesel emissions cheating scandal has been going on since last September. The company has been sued by the federal government and faces fines that could total as much as $46 billion. The California Air Resources Board is also taking legal action against the company.

Volkswagen via Automobile Italia/ Flickr

The federal suit is pending before US District Court judge Charles Breyer in San Francisco. He has appointed former FBI director Robert Mueller to act as Special Master to assist the parties in negotiating a settlement that is acceptable to both. At a hearing this week, Judge Breyer gave the parties a one-month extension to resolve their differences. That came after they advised the court that intensive negotiations have led to some progress. They also said issues remain and no settlement has been reached yet, according to a report in Automotive News.

“Volkswagen is committed to resolving the U.S. regulatory investigation into the diesel emissions matter as quickly as possible and to implementing a solution for affected vehicles, as we work to earn back the trust of our customers and dealers and the public,” VW said in a statement after the court hearing. “We continue to make progress and are cooperating fully with the efforts undertaken by Judge Breyer, working through Director Mueller, to bring about a prompt and fair resolution of the U.S. civil litigation.”

Judge Breyer cautioned the parties that if a settlement is not reached by April 21, he intends to let the case go to trial this summer. If that happens, your grandchildren will likely finish college before a final resolution takes place. Okay, that’s hyperbole. Substitute “high school” for “college.”

None of the litigants were willing to talk about the proposals on the table. There are basically two schools of thought on this topic. Some, like the Sierra Club, want to see heavy fines levied. That money would then be used to fund environmental cleanup programs. The Union of Concerned Scientists, weighed in this week, said, “Whatever we learn on Thursday, it is of the utmost importance that VW pay for its deception and remedy the damages of this corporate malfeasance. It is the role of the EPA and CARB to protect human health and the environment—a slap on the wrist and a nudge towards electrification is neither a suitable punishment nor remedy for the magnitude of this scandal.”

Like the Sierra Club, the Union of Concerned Scientists suggest money from fines levied against Volkswagen could be put to good use. It recommends a program to get old diesel-powered heavy trucks off the road. It notes, quite correctly, that heavy trucks create far more pollution than passenger cars. They also have a much longer useful life and can be spewing out their contaminants for decades. Getting the worst of them off the road would do far more for the environment than taking all those VW diesels and crushing them.

In a statement earlier this month, Todd Sax, chief of CARB’s enforcement division, said he did not believe a fix was available that would allow the cars to comply with the emissions standards or the onboard diagnostic requirements. “We will have to decide what the best approach is to dealing with these vehicles, and one of the options potentially would be to accept something less than a full fix,” he said. Environmental groups were disheartened by Sax’s comments, interpreting them as a sign that CARB is planning to go soft on Volkswagen.

They think CARB is leaning too far towards a suggestion advanced by Elon Musk and a number of business leaders. It calls for the EPA to force Volkswagen to make more electric cars. The company has said recently it has plans in place to expand the manufacture of plug-in cars at its assembly plant in Chattanooga, Tennessee. It also is working diligently at expanding the charging infrastructure for plug-in hybrid and fully electric cars. The Union of Concerned Scientists takes the position that letting Volkswagen use the money that should go into fines and penalties to promote its own business is wrong headed.

The issues raised by Volkswagen’s blatant cheating are complex. When courts and lawyers get involved, things often get even murkier. Will this be resolved by April 21? A prudent person would probably bet against that scenario.

Photo Credit: Automobile Italia (some rights reserved)


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About the Author

I have been a car nut since the days when Rob Walker and Henry N. Manney, III graced the pages of Road & Track. Today, I use my trusty Miata for TSD rallies and occasional track days at Lime Rock and Watkins Glen. If it moves on wheels, I'm interested in it. Please follow me on Google + and Twitter.



  • Dylan Wentworth

    Offer to buy back the vehicles from consumers at original price with interest if financed. Effectively making that free transportation for consumers.
    Pay the billions in fines.
    There, its done . Case closed.
    And it took me all of 30 seconds to figure out how to proceed.

    • Matt Foose

      And a manufacturer of fantastically reliable and efficient vehicles will go bankrupt.

      • KingGnome

        As they should.

        • Matt Foose

          Thankfully, your opinion won’t be validated. No company should be bailed out by the government but, at the same time neither should they be done in by an over reaching state.

          • KingGnome

            So the USA is over reaching when we set standards for crap being used within it’s boarders and a group of people purposely circumvent those standards so they can make a profit. Then get caught and they should not be scolded? The California thing is a moot point. As a Californian I know if I wanted a diesel that didn’t make emissions I would register it as a used diesel rig making it exempt from the emission standards. That’s what people did for the Grand Cherokee CRD. The main problem is the amount of emission that it was letting out is not allowed anywhere in the states.

          • Matt Foose

            The punishmentabove would be over reaching. The company would declare bankruptcy and everyone would lose.

          • KingGnome

            The would still have to sell of their assets to appease as much as the judgment that they could and it would prevent them from doing it again. Can’t by pass the court ordered restitution.

          • retiree-to-be

            “Scolded”, yes. But to impose a fine that would put the company out of business is ridiculous. Put this into context, the subject cars are 0.04% of vehicles on the US roads. GM, a Federally bailed out company that did not repay all it received, put unsafe vehicles by a multiple of tens more on the US roads resulting in the death of over 100 and injury of 100’s. GM got away with the Government fining them less than $1M.

            The real difference here is the amount of those in Congress and state governments paid off.

          • KingGnome

            And Chrysler didn’t take a dime. Every vehicle has recalls and are unsafe. They don’t intentionally do it though. VW did. Hogan got what $140 mil. Gawker is probably going out of business. Should companies just get little slaps on the wrist and never truly be held accountable for their actions

          • retiree-to-be

            Ford was the only US car manufacturer that did not take Government funds. The Chrysler bail out cost the taxpayer $1.3B. GM cost us $9.26B.

            It was proven in court that GM intentionally put unsafe cars on the road.

          • KingGnome

            I stand corrected on The Chrysler part. So if GM put unsafe cars intentionally on the road and USA bailed them out maybe Germany should pay the billions for VW? Would that suit you better? Then The government might get 46 bil of the 11.2 or 16.6 bil or whatever the current figure is.. The world could go round and round. Then they could give some of that money to Fiat and Chrysler so they can build something other then a Wrangler that can go off-road. Any everyone should get a free voucher for a ice cream cone cause socialism is good. Or we could just be capitalists and sue them like they want to do which is better and correct.

          • retiree-to-be

            It’s all in the timing. We found out about GM’s faulty switch after the bail out. My main point about all this is there should be a measured approach that is just and justifiable. Then it should be meted out equitably to all offenders, but that would mean this is a more perfect world than it really is. But, I could go for an ice cream cone.

          • SanPas

            Give an inch, and corporatists will take the mile. The only reasonable solution to corporate crime of this magnitude is summary execution. VW as a company must die as an example to all corporations doing business in the US … fraud of this magnitude cannot be tolerated.

          • Aleksey

            If you owned a Volkswagen, you wouldn’t want them out of business. Almost all VW owners want VW punished, but having them forced out of business means higher parts and maintenance costs and even worse depreciation for current VW owners. Also, for the cars they don’t cheat on, VW makes a few really nice ones.

          • neroden

            So it’s “overreaching” to shut down a criminal operation which committed systemic fraud against its customers?

            In my opinion, the government is supposed to shut down criminal fraud syndicates. Apparently in your world fraudsters should get away with it if they’re big enough. Think about it.

            Remember, VW did this *deliberately*. They deliberately defrauded multiple governments, defrauded their customers, and defrauded the general public.

      • No, but Volkswagen might. 😀

    • Bert Gogle

      An alternative is to just give all owners a flat rate of $50k US. The owners can then decide to payoff the car or buy another of their choice. If there is no real fix so be it. The cars produce far less than the typical US yellow school bus. The environmental groups should have zero input as to the how the consumer gets right. The consumer was wronged and should come before government interests and those making a living trying to defeat said government. Sure they can make their points but the points should be directed at China and other countries who laugh at the US while they wait for the US to collapse under it’s own weight.

      • Joe Viocoe

        So you want to compare a car carrying a single occupant most of the time,… To the emissions of a School Bus?

        • KingGnome

          I’m up for banning school buses and children.

        • Matt Foose

          They’re also cleaner and more efficient than diesel pick up trucks.

        • Bert Gogle

          yes, I’m sure the results would be different based on city, suburbs and rural, suburbs probably the worst since they have a big population spread out over a fair amount of miles and have elementary, middle, high schools all with different starting times. Some districts bus out of district to private schools, vo-tech, special needs…plus not every car has one person every trip and a trip might be to the store and back fro the day, not 6 runs at 3 different schools, away sports, time to and from home base, idling in parking lots having a break, yes it’s just one comparison. Also with the advent of spoiled brats, half the bus population gets driven to school these days in non-diesel bmw, lexus and the like, in gasoline so let’s compound things.

          • Joe Viocoe

            Spoiled brats aren’t a new thing. Ask parents why they are driving more… and it is because the bus pickup times have gotten so early that kids are waiting in the dark in unsafe areas.
            It is the resources that have thinned out.

            Idling could be solved like city buses… hybridization. But school districts cannot afford upgrades. Again, resources constrain the options.

            Unfortunately, very few people volunteer for carpools. Buses are really just the best way to coordinate carpooling.

        • retiree-to-be

          Average fuel economy (MPG) of the average diesel school bus is 10MPG. Average fuel economy of a diesel VW Passat is 40MPG (based upon my experience). The annual emissions comparison would probably be a wash.

          • Joe Viocoe

            The point is that Passenger-MPG is the metric that is useful when comparing a bus.
            A single school bus displaces 20 Soccer Moms and their SUVs.

      • Alwin Barni

        But a yellow school bus carries 40 people, whilst the passenger car usually one.

      • Dylan Wentworth

        50k to the consumers is a bit on the unreasonable side. Buying the car back also gets those cars off the road which is a win for the auto cartels and oil mafias who would prefer we buy new cars, preferably SUVs that get a fraction of the fuel economy of the TDi.

        • neroden

          50k is likely to actually be *more* than some of the buyers paid for their cars.

          I say, buy ’em back at their original retail price.

          • Dylan Wentworth

            Oh I know. I test drove a sportwagen TDi literally a week before the recall and the total sticker price was only about $25/26k. So I think about what I want had I bought the car and if it cost $0 other than fuel, def, tires and insurance for maybe a year of use, I would be happy with that and I think it’s fair. I wouldn’t expect to double my money. The damages to me personally wouldn’t have been that great and I would argue that the deception of the buyers has largely been to the benefit of the buyers because of the better-than-advertised fuel economy . Frankly I’d probably be tempted to keep it since there aren’t really any other ICE vehicles that compare and the biggest inconvenience there is having to prematurely find another car. Then again, not having to deal with selling it or trading it in…

    • Joe Viocoe

      Anyone can make a snap decision. Doesn’t mean it’s a good one.

    • SanPas

      Yours is a plagiarism of my idea …. which I’m sure was plagiarized from another. Anyway, I totally agree that VW must pay heavily for its deception.

  • Alwin Barni

    In my opinion:
    1 fix cars and prove it cannot be turned back in any way,
    2 pay a reasonable (but not buncrupcy level) fine, which can be used to clean up roads from old trucks,
    3 ban vw disels (only) from US market for a few years,
    4 oblige the company to invest in electric cars and infrastructure
    5 prosecute responsible people from the company, not just the company itself, companies have no minds – someone had to make the decision to go on with this cheat

    • KingGnome

      Why would you make them invest in electric cars? I’ll take gas any day, or a diesel if it was a economical option over a hybrid that needs a 5k battery after 5-7 years

      • neroden

        Electric car batteries last upwards of 20 years, assuming you get one of the *good* electric cars which thermally manages the battery

      • Alwin Barni

        To repair the damage to the environment and to help improve it.

        Electric cars are great (have one): quiet, reliable, do not pollute air (as much), and even if – it is easier to control and far away from human concentrated areas, which would result in a healthier society

        Diesel exhaust is particularly nasty – lots of carcinogens, and I am not particularly happy about this commuting 3h daily.

        But this request is optional – of course – any environmentally friendly investment would be OK. The main reason was to reduce the impact of the fine, by making part of it an investment, which can benefit the company. What they did is particularly evil, but many workers were not even aware of this – at least I believe so.

        • KingGnome

          I’ll keep my Hemi. Gas is cheap as dirt.

  • Heisenberg

    The fair thing to do would be to give people the full value of their cars but they would have to reinvest in a Volkswagen auto. I own a 2011 TDI and I would gladly buy another Volkswagen if this issue cannot be fixed without compromising the vehicle performance

  • Raphael Sturm

    A really nice idea would be making VW pay back their debt in ZEV credits, or something like that. If we assume the real fine, not the maximum possible amount, would be something like 10-20 billion, they could say VW can pay them in money, or in special, non tradable, ZEV credits, something like $5,000-10,000 per EV. And it has to be paid back over a 5 year period. Everything they can’t pay with ZEV credits, they have to pay in cash. That way VW would have the chance to pay their damage with building nice EVs and there will still be money left for other projects. And it would help competition immensely, if VW would do anything to flood the market with EVs.

    • Steve Hanley

      Ah ha! A sensible, non-dogmatic proposal. It will never fly! ; – )

      • Raphael Sturm

        They seldom do…

    • neroden

      I like the idea of VW paying ZEV credits for the payback to *CARB and the EPA*.

      But VW also defrauded individual carbuyers, and the only way to make those carbuyers whole is to buy their cars back. Preferably at original purchase price, but *at least* at Blue Book value before the scandal broke.

      • Raphael Sturm

        The customers is another topic and probably the toughest, because its hard to evaluate the damage done to them in particular. I’d guess that buying their cars back at, at least, the market value it had before the scandal would be fair. But it should be the car owners option, if they wanted to keep their car, that should also be possible. If you had a relatively new car and you were planning on keeping it several years, having to give it back would be a financial pain, but buying all cars back at their original price would also be unfair. I’d say VW should give them a fair offer and if they refuse, they should be able to keep their cars, even with the cheat software.

  • Marc P

    One thing that seldom gets discussed and, I’ll admit in all honesty, I don’t have the technical details to back my argument, but isn’t the actual amount of N0x gases spewed by these diesels, as they are now, actually much less than the passenger diesels of the 1970s and 1980s and still a tiny fraction of what the hundreds of thousands of big diesel rigs spew out on the road each and every day? Shouldn’t we put all this in perspective?

    Yes, it’s bad, yes they should pay fines and realize a form of restitution which is more than a “slap on the wrist”, but to call for full fledged Armageddon and the annihilation of the company is just plain stupidity.

    • Steve Hanley

      I find your argument persuasive. Thanks for your comment.

  • Doug McCrann

    You peeps ALLLLL seem to forget this isn’t an AMERICA ONLY issue, it’s world wide. So why should the USA bankrupt VW and leave the rest of the world no money when I’m fairly sure diesel VWs sold in the USA are small in number when compared to…you guessed it, the rest of the world?

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