Volkswagen emissions scandal ("dieselgate")

The Volkswagen emissions scandal (“dieselgate”) is a controversy surrounding the German-based automobile manufacturer Volkswagen. Since 2008, Volkswagen sold automobiles in the United States and other countries. The emissions testing done on these cars was artificially manipulated to meet environmental standards. In reality, these automobiles produced unacceptably high levels of dangerous nitrogen oxide. Volkswagen paid billions in fines and instituted recalls and buybacks, but as of 2019 still faced lawsuits and penalties as well as severe damage to its global reputation and sales.

Background

Volkswagen was founded in Germany in 1937. The then-ruling Nazi party boosted the company as a means of providing an affordable “people’s car” (Volkswagen) for German citizens. During World War II (1939–1945), Volkswagen facilities were manned by enslaved laborers producing military vehicles. Following the war, the production of civilian cars slowly resumed, and the affordable models became increasingly popular in many countries. By 2014, Volkswagen and its partners had become some of the world’s largest and most influential businesses. Volkswagen boasted factories in 31 countries and sales facilities in 153 countries. However, in 2015 a scandal threatened the future of the automobile maker.

The 2015 scandal involved emissions testing. Automobile emissions became a topic of world discussion following World War II. An economic boom in the United States combined with population growth and the popularity of suburban living made personal automobiles an increasingly common staple of life. Motorized vehicles and roadways appeared in greater numbers than ever and increased continually in the coming years.

At the time, the popularization of automobiles was largely considered a positive sign of affluence. However, many negative effects, most notably pollution, began to appear. Scientists became increasingly concerned with the rise in air pollution caused by motor vehicles, particularly in urban areas. This pollution had an adverse effect on the environment and posed serious dangers to the health of humans and other living things.

By 1970, scientific studies on the danger of air pollution led to new legislation in the United States. The Clean Air Act, enforced by the recently founded Environmental Protection Agency (EPA), placed strict regulations on the emissions that could be legally created by automobiles. In the coming decades, the EPA and other organizations made their regulations stricter, pushing automobile manufacturers to produce ever-cleaner vehicles and automobile users to maintain their vehicles to ever-higher standards.

Overview

The Clean Air Act has helped to greatly reduce the hazardous content of automobile pollutants. One of the main methods of enforcing this legislation is through emissions testing. Before cars can be legally sold in the United States and other participating countries, they must pass a series of tests proving that their emissions conform to acceptable levels.

Most manufacturers comply to avoid fines and maintain good standing in the automobile market. However, some manufacturers developed “defeat devices,” computerized programs implanted in cars that change the emission output. With such a device, a vehicle that is placed in a stand for emissions testing will operate differently—and more cleanly—than a vehicle that is actually being used on the road.

By 2007, the use of defeat devices was well-recognized, and the European Union (EU) banned their use during emissions tests. However, Volkswagen secretly continued to use such devices during tests of many of their automobile models, notably those with diesel engines. By 2011, some researchers at the European Commission’s Joint Research Centre began detecting major discrepancies between the emissions of Volkswagen vehicles in tests versus on the road. Suspicions mounted about Volkswagen’s practices. An additional 2014 study by the International Council on Clean Transportation (ICCT) also noted unacceptable levels of emission produced by Volkswagens in the United States.

In September 2015, the EPA charged Volkswagen with using unauthorized defeat devices in automobiles, specifically meant to manipulate emissions-test results. The United States Justice Department estimated that half a million automobiles in the country were likely affected by the rigged tests. Officials in other countries, including Germany, claimed to be unaware of the deceit. Volkswagen officials admitted to this practice but withheld further information, causing widespread confusion and anger among consumers and company stockholders.

The chief executive officer (CEO) of Volkswagen, Martin Winterkorn, resigned his position while maintaining that he was unaware of the unlawful practices. Company officials claimed that the manipulated tests, affecting more than two million cars, were primarily used by subsidiary companies Audi and Skoda. However, allegations arose that a Volkswagen supplier had specifically warned the company about its use of defeat devices. Volkswagen was suddenly surrounded by controversy, and its sales, reputation, and stock value plunged. Outcry, lawsuits, and demands for automobile recalls on a grand scale commenced in several countries.

The event came to be known as “dieselgate,” with the “gate” suffix used as a reference to “Watergate,” another famous modern scandal. Investigators ultimately confirmed that as many as eleven million vehicles around the world may have been affected by the fraudulent tests. More than five hundred thousand of these vehicles were sold in the United States since 2008. Most of these vehicles had two-liter diesel engines. These engines passed tests but in real-world driving conditions created up to forty times the legal limit of nitrogen oxide, a pollutant that can lead to respiratory illnesses and other serious health problems.

Among the Volkswagen automobiles affected were the Beetle and Beetle Convertible, Golf, Golf SportWagen, Jetta, Jetta Sportwagen, Passat, and Touareg. Additionally, several models from subsidiary company Audi were affected, including the Audi A3, A6 Quattro, A7 Quattro, A8 and A8L, Q5, and Q7. The Cayenne model by associated automaker Porsche was also included in the list of affected types.

Volkswagen has faced an array of punishments for its deceptive practices, including a $14.7 billion settlement, a landmark amount for civil penalties against automobile manufacturers. This settlement was meant to compensate customers and contribute to environmental protection and cleanup programs. In addition, Volkswagen has instituted rolling recalls and buyback programs, along with bonus cash, to affected customers. The US government has ordered that 85 percent of the affected vehicles be fixed or taken off the road by Volkswagen by June 30, 2019. Meanwhile, European legal actions against Volkswagen, including a lawsuit against Martin Winterkorn, were in progress as of April 2019.

Bibliography

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Bartlett, Jeff S., Michelle Naranjo, and Jeff Plungis. “Guide to the Volkswagen Emissions Recall.” Consumer Reports, 23 Oct. 2017, www.consumerreports.org/cro/cars/guide-to-the-volkswagen-dieselgate-emissions-recall-. Accessed 17 Apr. 2019.

Bowler, Tim. “Volkswagen: From the Third Reich to Emissions Scandal.” BBC News, 2 Oct. 2015, www.bbc.com/news/business-34358783. Accessed 17 Apr. 2019.

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“Ex-VW boss Martin Winterkorn charged in Dieselgate scandal.” Deutsche Welle, 15 Apr. 2019, /www.dw.com/cda/en/ex-vw-boss-martin-winterkorn-charged-in-dieselgate-scandal/a-48329492. Accessed 17 Apr. 2019.

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Parloff, Roger. “How VW Paid $25 Billion for ‘Dieselgate’—and Got Off Easy.” Fortune, 6 Feb. 2018, fortune.com/2018/02/06/volkswagen-vw-emissions-scandal-penalties/. Accessed 17 Apr. 2019.