December 10, 2015 Volkswagen Update
Volkswagen investigators announced today that the company cheated emissions tests partly because they could not figure out how to meet U.S. standards. Volkswagen chairman Hans-Dieter told reporters that engineers had developed manipulative software to fool regulators because they, “quite simply could not find a way to meet the tougher NOX limits in the United States by permissible means”. The company has admitted fault to a “whole chain of mistakes” rather than a “one-off mistake”. Volkswagen is actively pursuing a fix for the 600,000 U.S. vehicles estimated to be affected. Some 450 individuals, internal and external, are claimed to be related to the scandal. The U.S. Justice Department has initiated a criminal investigation and many separate lawsuits have been filed to date.
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Volkswagen EPA Notice of Violation
On September 18, 2015 the EPA issued a Notice of Violation (NOV) of the Clean Air Act (CAA) to Volkswagen AG, Audi AG, and Volkswagen Group of America, Inc. (collectively, Volkswagen). The NOV alleged that four-cylinder Volkswagen and Audi diesel cars from model years 2009-2015 include software that circumvents EPA emissions standards for certain air pollutants. The affected diesel models include:
- Jetta (MY 2009 – 2015)
- Jetta Sportwagen (MY 2009 – 2014)
- Beetle (MY 2012 – 2015)
- Beetle Convertible (MY 2012 – 2015)
- Audi A3 (MY 2010 – 2015)
- Golf (MY 2010 – 2015)
- Golf Sportwagen (MY 2015)
- Passat (MY 2012 – 2015)
These Volkswagens were equipped with a “defeat device”, a sophisticated software algorithm that detects when the car is undergoing official emissions testing, and turns full emissions controls on only during the test. This allowed the vehicle to pass the EPA’s required emissions testing protocol. The EPA’s NOV alleged that under normal driving conditions, the software suppressed the emissions controls, allowing the engine to produce more torque and get better fuel economy. With suppressed emission controls the vehicles have been tested to emit up to 40 times more nitrogen oxides than allowed by law.
Volkswagen Admits Violation and Initiates Recall
According to the United States Environmental Protection Agency (EPA), Volkswagen had stated for a year that discrepancies in emission testing were merely technical glitches. Volkswagen only fully acknowledged that they had manipulated the vehicle emission tests after being confronted with evidence regarding the “defeat device”. Formal acknowledgement of the deception was made by Volkswagen executives in Germany and the United States to EPA and California officials during a September 3, 2015 conference call. During the call Volkswagen executives discussed written materials provided to the participants demonstrating how Volkswagen’s diesel engine software circumvented U.S. emissions tests.
Volkswagen’s former CEO Martin Winterkorn commented on the situation stating: “I personally am deeply sorry that we have broken the trust of our customers and the public.” Winterkorn was in charge at Volkswagen from the start of 2008 to September 2015. He attributed the admitted wrongdoing to terrible mistakes made by a few people. Winterkorn initially resisted calls to step down from his leadership role at VW, and then resigned as CEO on September 23, 2015.
Volkswagen Group of America CEO Michael Horn was forthcoming, admitting “We’ve totally screwed up.” Mr. Horn also added, “Our company was dishonest with the EPA, and the California Air Resources Board and with all of you.”
Volkswagen announced that 11 million cars were involved in the falsified emission reports, and that over seven billion dollars would be needed to deal with the situation. The newly appointed CEO of VW, Mathias Muller stated that the software was only activated in a part of those 11 million cars, which has yet to be determined. The software may have allegedly existed since as far back as 2007.
On 28 September 2015 it was reported that VW had supended Heinz-Jakob Neusser, head of brand development, Ulrich Hackenberg, the head of research and development at Audi, and Wolfgang Hatz, research and development chief at Porsche who also heads engine and transmissions development of the VW group. On the same day it was reported that in addition to the internal revision process to investigate the incidents, the supervisory board of VW hired American law firm Jones Day to carry out an external investigation.
It relies upon Volkswagen to initiate the process that will fix the cars’ emissions systems. Car owners should know that although these vehicles have emissions exceeding standards, these violations do not present a safety hazard and the cars remain legal to drive and resell. Owners of cars of these models and years do not need to take any action at this time.
Loncar Lyon Jenkins will continue to update you on the recall as information develops. Loncar Lyon Jenkins is not currently pursuing litigation on behalf of individuals who purchased the affected vehicles.