WASHINGTON — The deception perpetrated by Volkswagen in the United States likely reaches around the globe, the company said this week, with some 11 million cars worldwide equipped with software designed to cheat emissions tests.
The automaker said it will set aside $7.3 billion to cover fixes and “other efforts to win back the trust of our customers.” That amount likely falls many times short of the actual costs, including car repairs, lawsuits and government penalties around the world.
Exactly what alterations are necessary on all of those cars is unknown, and independent engineers said the task of repairing the emissions systems could be extremely difficult to do without harming engine efficiency and performance. None could offer what they deemed a reliable estimate of the cost of a potential repair.
“In my German words, we have totally screwed up,” Volkswagen U.S. chief, Michael Horn, said at an event in Brooklyn late Monday night.
The broad scale of the deception suggests that knowledge of the emissions cheating was widespread, and Department of Justice investigators are focusing on the actions of executives. German news outlets Tuesday reported the firing of chief executive Martin Winterkorn is imminent, citing unidentified members of the company’s board.
Also Tuesday, new details of the cat-and-mouse interactions between suspicious regulators and the German car giant showed how far the company was willing to go to assure the government that, contrary to the best evidence, nothing was amiss in its diesel cars. Last year, Volkswagen informed regulators it was initiating a 500,000 car recall in the United States that would fix the problem. The recall was either a technical failure or, as some U.S. officials said, a ruse.
Whether those involved in the emissions cheating software will face more severe penalties is unknown, but anger among customers, who are stuck with cars that defy pollution standards, and dealers, who are left with in unsold inventory, has become increasingly evident. Their appeals have been heard in Washington.
“It is an outrage that VW would take advantage of its consumers by purposely deceiving them on their mileage on diesel vehicles…There ought to be some prosecutions and corporate executives that knew this and have done it ought to be going to jail,” Sen. Bill Nelson, D-Fla., said in a speech on the Senate floor Tuesday, regarding the repeated failures of automakers. “And I lay this not only on the corporate culture, I lay it at the feet of the U.S. regulatory agencies who ought to be doing their job, ought to be doing it in a forceful way.”
Noting that Volkswagen had engaged in similar tactics in the United States in the early ’70s, when they were fined $120,000, Clarence Ditlow, director of the Center for Auto Safety argued that financial penalties were not enough to keep the company honest.
“The only way to change auto company behavior is to put the responsible executives in jail,” he said.
The company’s diesel troubles have erupted over just a few days, but they were more than a decade in gestation, and emerge from the company’s efforts to conform to stricter U.S. emissions standards.
Those regulations were finalized more than 15 years ago, and after a years-long grace period, the tough standards were phased in between 2004 and 2007. At the time, the government acknowledged that meeting the emission standards for NOx, or nitrogen oxide, as well as soot, would be difficult.
“Manufacturers have expressed concerns that diesel-fueled vehicles would have difficulty meeting NOx and particulate matter levels like those contained in today’s rule,” Environmental Protection Agency officials wrote in issuing the new standards. “Clearly, these standards will be challenging.”
For a time, Volkswagen and other automakers stepped back from the U.S. diesel car market. It was a time to retool. Experts said the challenge of making a diesel engine clean enough for the U.S. standards – without compromising how the engine works — is very difficult.
In 2008, Volkswagen came back with a diesel version of the Jetta. The company touted it as an example of the “clean diesel.” It won raves, including “Green Car of the Year” at the Los Angeles Auto Show.
“After a three-year break that seemed interminable to fans, Volkswagen’s back in the U.S. diesel-car market with a clean-burning diesel in its popular Jetta compact sedan,” USA Today told readers.
But what seemed like a breakthrough seems now, in light of the recent revelations, like a massive cheat.
The engineering hurdles in controlling diesel emissions are high enough, some experts said, that they may have provided an incentive for companies to skirt the rules.
“I can’t say I’m surprised,” John DeCicco, a research professor at the University of Michigan Energy Institute, said of the recent revelations. “The temptation to game the system with a defeat device is definitely high because of the technical challenges.”
The company’s two-liter diesel engines in the United States had been equipped with a “defeat device” that allowed the cars to pass federal emissions tests despite the fact that while on the road they emit more than 10 times the permitted amounts of NOx. Those emissions lead to smog on hot summer days, triggering a variety of health problems, particularly for asthmatics and other people with breathing difficulties.
As has been widely reported, the emission problems were detected in a May 2014 report by the International Council on Clean Transportation and West Virginia University.
A closer examination of the public documents around the case, however, shows that as recently as December 2014, the company sought to persuade government regulators that the excess emissions could be addressed with a simple software change.
At a meeting on December 2, Volkswagen proposed a “voluntary recall” of about 500,000 vehicles. Officials from the U.S. and California, which generally takes a lead role in emissions issues, approved the plan.
“Based on this meeting, VW initiated a voluntary recall. . . . This recall was claimed to have fixed among other things, the increased real world driving NOx issue,” according to a recent letter from the California Air Resources Board to the company.
The extent of the recall, which is discussed in letters between government and company officials, is unknown. Company officials wouldn’t say this week how many recall notification letters Volkswagen issued to consumers, and how many consumers brought their cars in for the purported fix.
But by May of this year, California officials had run road tests on cars altered under the recall. Despite the fix, the car showed higher than expected NOx emissions. California engineers also created a special dynamometer test, apparently to address company concerns that the previous testing was unfair.
California Air Resources Board “has determined that the previous recall did not address the high on-road NOx emissions, and also resulted in the vehicle failing certification standards,” it told the company this month.
“They basically ran out of excuses,” said Stanley Young, spokesperson for the California Air Resources Board. “They would say the tests weren’t at the right temperature, or some other issue. We had them in [to our offices] several times.”
EPA administrator Gina McCarthy said on Tuesday that the agency would step up efforts to look for cheating by other manufacturers, though she suggested that Volkswagen was an “outlier” in the extent of its cheating to defeat emissions standards.
“We are not going to sit around and worry about whether or not there are other devices. We’re going to find it,” she said. “So right now we’re upping our game in terms of going out and doing the work to take a look at what we need to do with other vehicles.”
McCarthy, speaking to reporters in Washington, acknowledged that the Volkswagen software ruse was “particularly difficult for us to detect. We haven’t found similar types before but we’ll take a look and make sure we’re attacking it successfully,” she said.
Such efforts may protect consumers in the future. For now, many of those diesel Volkswagens present a problem for the current owners, as well as the 650 U.S. dealers with whom thousands of the suspect vehicles now sit.
Jack Fitzgerald, chief executive of Fitzgerald Auto Malls, an auto dealership chain that sells Volkswagens in Annapolis and Frederick, Maryland, said he is still awaiting details from the company about exactly what is needed to fix the problem.
“They haven’t given us any idea what the fix is,” Fitzgerald said. “All we know is that we have parked the cars that have not sold, and we can’t deliver them, and we’re waiting for further information from Volkswagen.”
Tom Doyle, manager at Wheaton Service Center in Maryland, an independent shop that specializes in Volkswagens, said customers “just feel slightly betrayed by Volkswagen.”
He’s talked about little else with them since news broke Friday of the EPA’s allegations against Volkswagen.
“They’ve called me wanting to see what kind of drop in fuel economy they’re likely to see once a fix is applied,” he said.”The thing that frightens me is that they thought they could get away with it. . . Every one of those half million cars that they sold has the evidence on board.”
Washington Post staff writer Joby Warrick contributed to this report. Moore is a freelance writer.