Volkswagen Decides To Bury Cheating Report – For Now

When the whole Volkswagen diesel cheating scandal started, the company made all the right noises. It promised a full and fair investigation. It promised to hold those responsible accountable. It promised its full cooperation with any and all government officials. It promised it would do the right thing and fix the mess it created.

Volkswagen diesel

At the behest of Volkswagen chairman Hans Dieter Poetsch, the company hired US law firm Jones Day and auditing firm Deloitte to conduct a thorough investigation. Some 450 people are involved in the effort to find out who knew what and when. They have been diligently sifting through more than one hundred terabytes of data provided by the company but say they still have dozens of witnesses they need to interview. They are hunting for what is called “a small group of engineers” believed to be responsible for the computer code that told the cars to report erroneous emissions data during testing.

A preliminary report from the investigators was supposed to be released last week. But on Friday, the Volkswagen board of directors voted not to release it, citing strong objections from its lawyers and “unacceptable risks” to the company.

“Publishing such a preliminary report would not only endanger the complex and confidential settlement talks [with authorities and plaintiffs], it would also have a negative effect on ongoing investigations as individuals who have yet to be questioned could align their statements with the contents of the report,” said Wolfgang Porsche, the VW board member tasked with heading up the investigation. “We must avoid this.”

Last week, Volkswagen arrived at a key agreement with government officials in a law suit pending in federal court in San Francisco. As part of that agreement, the company has agreed to set aside $10 billion to settle any and all claims against it by civil authorities and individual plaintiffs. Apparently the company thinks releasing the preliminary findings might endanger that tentative settlement.

VW TDI EngineThe diesel cheating schlamozzle in the US began in 2005 when Volkswagen decided to begin a major push to sell diesel cars in America. Diesels were supposed to have the same or better fuel economy than Toyota’s hybrid Prius but cost less. The problem was that US emissions regulations regarding NOx and particulate emissions are 6 times more strict than those in Europe. Everything the company tried to make its cars meet US standards resulted in reduced performance and lower fuel economy.

And so, Volkswagen would have us believe, a group of low level engineers decided — on their own and with no prompting from management — to create the software that made it seem like its diesel engines were in compliance even thought those dastardly engineers knew they were not. Good help is so hard to find these days.

“In order to resolve this conflicting objective satisfactorily within the time frame and budget of the EA189 project, according to the current state of knowledge, a group of persons — whose identity is still being determined — at levels below the Group’s Management Board in the powertrain development division, decided to modify the engine management software,” Volkswagen said in a statement in March. (Emphasis added.)

The highlighted language is vitally important to senior Volkswagen officials. Under German law, “If it can be proven that someone on the management board knew, then…..the supervisory board [in its fiduciary capacity] has no choice but to seek damages,” says a company source. Is Volkswagen trying to insulate such people from liability? Millions of dollars are at stake for those who have suddenly “retired” to live off their fat pensions. Martin Winterkorn, the man who replaced Piëch, resigned last fall. Ulrich Hackenburg, one of the company’s most brilliant engineers, left unexpectedly in December.

One fellow who says he knows exactly what happened is Bob Lutz. In an op-ed piece that appeared in Road & Track last November, he said that former Volkswagen chairman Ferdinand Piëch was a tyrant who demanded impossible results. Those who failed to deliver were fired. “Human nature being what it is — if it’s lose your job today for sure or lose your job maybe a year from now, we always pick maybe a year from now,” Lutz wrote.

Martin Horn, the man in charge of US operations for many years, told Congress last October that the story about a small group of engineers getting together to cook up the diesel cheating software without management’s knowledge was “very hard to believe.” Horn was suddenly replaced in March without warning or explanation.

Anyone who has ever spent time in the military will immediately recognize what is going on here. The generals always blame the lieutenants, who blame the sergeants. Ultimately, some private takes the fall. A full report is supposed to be released later this year. Expect it right after we find out who shot JFK.

Source: Automotive News




Steve Hanley

Closely following the transition from internal combustion to electricity. Whether it's cars, trucks, ships, or airplanes, sustainability is the key. Please follow me on Google + and Twitter.