New VW CEO Matthias Mueller says the maker faces an "evolution," not a "revolution."
Volkswagen’s new CEO Matthias Mueller hopes to see a recall affecting as many as 11 million of the German maker’s diesel vehicles begin in January – but for the 482,000 of those cars sold in the U.S., VW must still win regulatory approval for the planned retrofit.
Even as Volkswagen moves ahead with plans to fix vehicles equipped with software designed to cheat on emissions tests, its problems are mounting. Among other things, the Senate Finance Committee has opened a probe investigating whether the carmaker falsely claimed more than $50 million in tax credits for meeting emissions standards.
“If all goes according to plan, we can start the recall in January. All the cars should be fixed by the end of 2016,” Mueller says in an interview published today by the German newspaper, the Frankfurter Allgemeine Zeitung, or FAZ. But that timetable might be difficult to meet, especially in the U.S., where the scandal was originally touched off last month.
The Environmental Protection Agency revealed that VW had used a so-called “defeat device,” software coded into its engine control system, to detect when vehicles using its WA 189 engine were undergoing emissions tests. Otherwise, the 2.0-liter diesels were programmed to emit as much as 40 times the allowable levels of toxic gases such as oxides of nitrogen, or NOx. The scam was apparently developed when the engineering team was unable to meet a goal of low emissions, good power and high mileage.
VW will still need EPA approval before it can fix vehicles like this 2014 Volkswagen Golf TDI.
Several sources within VW have told TheDetroitBureau.com that the automaker is currently meeting with the EPA to get regulators’ approval for a proposed fix that would meet emissions standards. But it must demonstrate that the solution not only works initially but that it will continue to comply with pollution mandates for 150,000 miles. Complicating matters, VW has revised the U.S. version of the WA 189 engine twice since it was introduced seven years ago.
The subterfuge has generated a tidal wave of bad press for Volkswagen, and a mounting series of legal problems. The automaker has already launched its own internal investigation and Mueller said in his Wednesday interview that he believes the scam was the work of only a handful of employees. But it has already led to the ouster of his CEO predecessor, Martin Winterkorn, and the suspension of several other key engineering executives.
(Diesel scandal an “existence-threatening crisis,” warns new VW chairman. Click Here for more.)
Winterkorn, in turn, has come under investigation by German federal prosecutors and could become a target in a separate criminal probe by the U.S. Justice Department. Adding to VW’s legal woes, the chairman and the top Democrat on the Senate Finance Committee have sent a letter to the company raising the question of whether it claimed clean air credits of up to $1,300 a vehicle under “false representations to the U.S. government.”
The 482,000 vehicles equipped with the defeat devices were “included (with) those that the company certified as qualifying for the advanced lean-burn technology motor vehicle credit,” wrote Senators Orrin Hatch, a Utah Republican, and Ron Wyden, an Oregon Democrat.
Auction prices for used VW diesel models have plunged, according to data from KBB.com. Click to Enlarge.
VW already faces potential fines of up to $18 billion for failing to comply with the Clean Air Act. It could be in for additional penalties if the Justice Dept. investigation moves forward. Meanwhile, as many as a half-dozen class action lawsuits on behalf of owners have already been filed.
Among other issues, lawyers are likely to argue that the value of used VW diesels have fallen as a result of the scandal. A preliminary study by KelleyBlueBook.com found that in the weeks after the story broke the average auction price of models like the Passat, Jetta and Golf TDI models tumbled 13%.
VW’s legal problems aren’t limited to the U.S., however, with investigations underway, and lawsuits already filed, in countries stretching from Italy to South Korea.
The automaker has already set aside $7.3 billion to cover the cost of the scandal, a figure most analysts believe will fall well short of the final tally. And VW has given clear signs it agrees. Senior officials, as well as the labor leaders who participate in VW management, have warned of reduced profits and the likely need for major cutbacks in spending.
“We will need to call into question with great resolve everything that is not economical,” Bernd Osterloh, head of VW’s works council said during a meeting this week attended by more than 20,000 workers at a VW’s headquarters in Wolfsburg, Germany.
(2016 Chevrolet Colorado Diesel deserves a close look despite VW scandal. Click Here for the review.)
The scandal seems all but certain to short-circuit Volkswagen’s aggressive global growth plans. The maker nudged past Toyota to become the world’s best-selling auto manufacturer during the first half of this year. But just the hold it has placed on selling the affected diesels could set it back into second for all of 2015.
And VW management now appears to be rethinking its growth strategy, among other things looking at planned model-line expansion plans and perhaps raising questions about some brands, such as the ultra-exclusive Bentley, CEO Mueller told the FAZ.
While he insisted the maker will “shine again,” once it works through the crisis, he acknowledged it could take several years – and could leave it smaller.
“This crisis gives us an opportunity to overhaul Volkswagen’s structures,” Mueller said. “We want to make the company slimmer, more decentralized and give the brands more responsibility.”
(Breaking News: UAW targeting Jeep plants if no new contract from FCA. Click Here for the latest.)
We have a number of incorrect statements in this story that continue to be perpetuated even though they are false and could have easily been investigated for their accuracy long ago.
1. VW did not use any means to “cheat on emissions tests”. The VW diesel cars pass all required emissions tests. I repeat the VW diesels pass all required emissions tests for the locales where they were sold. There was no cheating on the emissions test at all, contrary to the same inaccurate reports repeated over and over again – which has been deeply confusing to VW diesel owners.
VW errored by using software that could surmise when an emission test was being run to ensure that the emissions controls worked at full capacity. They in fact did work properly at full capacity and that is why all VW diesels pass all emissions requirements.
VW however used code that disabled some emissions controls when an emissions test was not being conducted and the vehicle was just being driven normally. Any device that can detect when an emissions test is being conducted is termed a “defeat device” by emissions law regulators as they assume the intent is to disable the emissions controls, which is what VW did on some engines in some locales – when the engines were just being driven normally. There was no physical hardware used to defeat the emissions controls it was simply a matter of not running all of the emissions controls 100% of the time as required by some emissions regulations.
2. The following statement is completely untrue –
“the 2.0-liter diesels were programmed to emit as much as 40 times the allowable levels of toxic gases such as oxides of nitrogen, or NOx.
VW did not program the engines to produce anything, they disabled the operation of some emissions controls via software that are required in some locales to run 100% of the time. The “40 times the allowable levels of oxides of nitrogen” has never been measured in any VW diesel engine test and it is purely theoretical maximum quantity that could occur based on the CA NOx requirements. Actual testing has never shown the VW diesels to ever emit 40 times the allowed NOx.
VW should be held 100% accountable for the diesel engine emissions software problems and deception, but journalists also have an obligation to get the facts correct and not just keep repeating inaccurate technical info. as many have done. Anyone reading these stories would actually believe that VW programmed the engines to produce 40 times the allowed NOx and that a mechanical device was used to circumvent the emissions test when exactly the opposite is true. None of the VW diesel engines tested failed to meet all emissions test when a proper emissions test was conducted. The times when emissions possibly exceeded the requirements were when the vehicle was not being subjected to an emissions test and instead was just being driven, i.e. in normal use.
VW deserves a lot of criticism for the illegal and immoral actions of small group of unscrupulous folks in their diesel emissions dept. who wrote improper software for these engines. Perpetuating false information regarding the emissions on these diesel engines is inappropriate however and confusing to all VW diesel owners. No one should be punishing or misleading VW diesel owners for the shortcomings of the diesel emissions group within VW. The technical facts are not that difficult to understand regarding what was and was not done to the emissions controls on these diesel engines. Continuing to falsely report the specifics of the situation is unprofessional.
GT, you’re relying on debating tactics. The fact is, the vehicles ONLY met emissions standards when certain very limited conditions were detected, ie no steering input, set and stable barometric pressure, etc. The reality is that VW clearly cheated by creating a package of emissions hardware and software that only went into “overdrive,” if you will allow the metaphor, when such conditions were met. Otherwise, and under most normal conditions, the vehicles were not operating that full package of pollution controls. That is quite certainly cheating when the only time the vehicle is programmed to perform properly is when it detects a specific condition.
FYI, we have made it quite clear — in this story and others — that the “defeat device” was software, not some box added to the vehicle. Here’s a relevant line from this story:
“The Environmental Protection Agency revealed that VW had used a so-called “defeat device,” software coded into its engine control system, to detect when vehicles using its WA 189 engine were undergoing emissions tests. Otherwise, the 2.0-liter diesels were programmed to emit as much as 40 times the allowable levels of toxic gases such as oxides of nitrogen, or NOx….”
You COULD parse the above graf to find fault with the statement “programmed to emit as much as 40 times…” YOU might say that nobody specifically programmed these cars to reach 40x NOx mandate levels. The control system was, however, programmed in such a way to permit that extreme level of NOx to be produced. It’s a subtle but arguable linguistic question and I will state here that I can see the argument against the wording. But that does not diminish the issue one iota. VW engineers clearly could measure what the vehicle would do in non-test conditions, including producing as much as 40X NOx, and they did not program the vehicle to do otherwise in the real world.
There is nothing false about our reporting.
Paul A. Eisenstein
Publisher, TheDetroitBureau.com
Actually Mr. Eisenstein with all due respect there are factual errors in your reporting and that is why I noted them as they present an inaccurate technical perspective of the situation.
This is not a matter of semantics nor debating tactics at all. It’s a matter of technical inaccuracies of significant to the discussions and reporting of the VW scandal. As I have noted several times, VW violated law and should be held fully accountable, but making false claims of cheating on emissions tests is disingenuous and incorrect.
Let’s be clear here all VW diesel engines met/meet all emissions requirements when they were/are tested in accordance with the respective emissions laws. The way you report the story you state that VW cheated on the emissions tests, when they did not cheat. What VW’s software did was reduce duty cycles of some of the emissions devices during normal operation – which is allowed under various emissions laws. This resulted in unacceptable emissions during actual use in some locales. VW needs to rewrite their software to comply with all emissions requirements 100% of the time, which the current software does not do, even though the engines all pass the emissions requirements under proper testing. You reports suggest that VW cheated on the EPA tests and that the diesel engines can’t meet the emissions requirements, which is untrue. they do in fact meet all emissions requirements when properly tested but not when in normal driving.
VW is absolutely guilty of having improper test detection code in their ECUs and of reduced duty cycles in some emissions controls when the vehicles were in normal operation. That is not the same as programming the engines to produce 40 times the allowed NOx nor cheating to pass the emissions test. No test has ever shown the VW diesel engines to produce the theoretical maximum 40x NOx allowed. The reason why both of these points are important is because many people including some folks here falsely believe that the VW diesels do not currently pass emissions requirements with all emissions controls functioning as designed, when in fact they do. Thus these people are under the misconception that the engines need additional hardware to comply with emissions regulations, which they do not. Thus no hardware changes are required on any of the VW diesels to meet the existing U.S. emissions requirements – the most stringent diesel emissions regs in the world. In addition reducing the operation of certain emissions controls under certain emissions laws is completely legal and not in violation of law.
VW needs to be held accountable for their actions but it’s totally inappropriate to make technically false statements about the VW diesel operations and emissions which confuses owners and the general public. VW did not program their diesel engines to emit 40X the allowed NOx and no one has ever properly tested a VW diesel and measured 40X the allowed NOx. VW needs to install the proper software to make their diesel engines compliant 100% of the time instead of only when being properly emissions tested. The EPA website confirms my position on the matter that VW’s engines do pass all properly conducted U.S. emissions test but employ reduced emissions device usage when in normal operation and as a result emit excessive pollutants and are thus non-compliant.
BTW, I have no connection with VW nor do I currently own a VW diesel though I did own a VW diesel in ’82. I do not speak for VW in any capacity but I understand the technical differences between what the EPA, CARB, etc. have stated and what you and other media have improperly stated. It’s unfair to all concerned to mislead the public on the VW diesel emissions when the EPA information states the particulars on the VW diesel engines, which is different than what many have reported. I suggest that VW owners read the EPA public online statements for clarification.
http://yosemite.epa.gov/opa/admpress.nsf/bd4379a92ceceeac8525735900400c27/dfc8e33b5ab162b985257ec40057813b!OpenDocument
GT, nobody is punishing VW diesel owwers! It is VW who is punishing them.
John,
You misunderstand my comment. When the media falsely claims that VW cheated on the emissions test – which they did not, the misunderstanding by the general public is that the VW diesel engines can’t meet the emissions requirements, which they can and do meet. Thus VW diesel owners could falsely believe that there is a mechanical problem with their diesel or that additional hardware is required to comply with the relevant emission requirements, which there is not. Thus the general public and VW owners may believe these diesel engines are defective in design instead of just employing improper software. This is why getting the facts technically correct is important. False and misleading statements by the media confuse the public and portray the situation differently than it actually is as stated by the EPA and other investigating authorities. That ends up hurting VW owners in numerous ways including on resale value of their vehicles.
Paul – I wholeheartedly agree with your rebuttal. GT is playing with words – what are the chances that this is a plant from the VW PR spin machine?
From the moment that emission testing was instituted (late 60s/early 70s) there was the issue that the tests (conducted in carefully controlled laboratory-like conditions, at light load and low speed) didn’t necessarily reflect real-world usage. I worked in GM Emissions Engineering in 1971 and we debated at length whether we could have one strategy for the tests and another for higher speed/higher load real-world usage. It was decided from on-high that that such an approach was not ethical and probably not legal – that the same powertrain strategy needed to be operative under all conditions, thereby meeting the intent of the regulations. I am confident that this policy has been followed by the majority of OEMs (especially GM and Ford) ever since.
But … what VW did was one step further. They deliberately built in software that even when the car was operated in the real world under the light load/low speed test conditions the certified emissions levels were exceeded. This is deliberate subterfuge, as you imply.
I believe, however, that VW is, at heart, a great company with a strong ethical belief at its core. I can only surmise that a small handful of employees unable to meet their commitments of cost, performance and emissions, chose to implement such a short-sighted and nefarious act. They may have saved their pensions and bonuses but cost the company dear. In doing so they did all of us a profound disservice.
Rgreensl – I really enjoyed what you wrote. You are a spot-on. Thanks for putting the beautiful reply. I wish I could use English as good as you 😉
Rgreensi,
Sorry but I have no association with VW at all. I however am capable of reading the EPA online statements and letters to VW and understanding the technical issues.
I agree that a small group within the VW diesel / emissions group took it upon themselves to write improper ECU operational code that illegally detected when an emissions test was likely being administered and also that the software can reduce emissions control duty cycles under normal usage resulting in non-compliance with some emissions regulations.
As such VW’s reputation has been severely damaged by a small group of unscrupulous people. VW diesel owners are also suffering in many ways by false reports from the media that improperly state the technical issues and mislead people into believing VW cheated on the emissions test which they did not. As such the public is likely to believe that the engines will not actually meet all emissions requirements, when they already do comply under test conditions only. Getting the technical details correct is a responsibility of the media and not a trivial matter.