By on September 22, 2015

tdi7 Volkswagen announced Tuesday that it “plans to set aside a provision of some 6.5 billion EUR ($7.3 billion) recognized in the profit and loss statement in the third quarter of the current fiscal year,” but that the final number is subject to change as the emissions scandal unravels.

The automaker has also admitted that the software, which includes a “defeat device” to hide on-road NOx emissions, has been used on 11 million vehicles sold worldwide.

The latest admission and act to mitigate the damage is another chapter in what seems to be a very long story that only came to light this past Friday. Nearly a half a million vehicles sold in the United States with four-cylinder diesel engines are affected. CARB and the EPA gave Volkswagen a chance to rectify on-road emissions issues last year by way of a voluntary recall, but the fix did not bring NOx emissions down to an acceptable level.

Volkswagen, in a statement released Tuesday, said they are “working at full speed to clarify irregularities concerning a particular software used” in the vehicles and that newer Euro 6 compliant vehicles are not affected by the “defeat device” software.

Diesel Volkswagen and Audi models were held up at port for months waiting for a Certificate of Compliance from the EPA. When the EPA held cars at port, Volkswagen admitted to using abnormal software measures and engine mapping to manipulate particulate test results.

Volkswagen and Audi have stopped the sale of the affected models in the United States and Canada.

After admitting to the emissions manipulation, Volkswagen’s stock price close to 20 percent, erasing a significant amount of value from the company. The company is also now under investigation from the U.S. Department of Justice.

In the U.S., Volkswagen could be fined up to $18 billion, or $37,500 per non-compliant vehicle sold.

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59 Comments on “Volkswagen Sets Aside €6.5 Billion to Cover 11 Million Vehicles With Cheating Emissions Software...”


  • avatar
    RideHeight

    “Volkswagen’s stock price close to 20 percent”

    No verb. Damn union typesetters.

  • avatar
    balreadysaid

    These engines are pretty dirty. I have worked on a few egr’$ and they are plugged with soot. Just for reference these egr’$ plug up in short order with driving that is optimum for the egr to run. 11 million times what I scrape out of the intake? Sounds like a bigger problem than anyone realizes. Just rub soot on your skin and see how easy you can get it off. Breathing it in will disgust you once your familiar with it.

    • 0 avatar
      DenverMike

      Diesels are “dirty” by design. You can’t get around it. Emissions are very counterproductive, counterintuitive to the nature of diesels. It’s like ‘adding on’ a reverse-supercharger to ruin economy and performance, if not reliability, for no good reason except cleaner air.

      So it’s much harder for small diesels to cope with CARB level emissions and still get desirable economy and performance.

    • 0 avatar
      RideHeight

      Even before combustion diesel and fuel oil will spasm my throat, turn on the waterworks and give me a piercing headache. I will never have that smell around me again.

    • 0 avatar
      DeadWeight

      In the metro Detroit area, especially on highways, I make sure to regularly change the cabin filter with a charcoal activated one and regularly run the A/C on recirc mode with family in our vehicles because of DDD (damn dirty diesels).

      They are offensive in every regard, and give many people acute headaches and respiratory problems.

      • 0 avatar
        jrmason

        Diesel power delivers your clothing to our shores by ship and to your store by truck. Diesel power plants, harvests, and delivers the food you eat. Diesel power delivers the construction supplies your homes are built and remodeled with, the entertainment equipment you use, it even delivers the vehicles you buy from the factories. It is instrumental in the roads you drive on, the bridges you cross and in keeping the roads cleared when it snows. If it is so offensive to you, perhaps you should consider a change in lifestyle.

        I personally get a kick out of the so called greenies and health nuts that bitch about dirty air. As paramount and instrumental as diesel is in supporting our everyday lifestyle it accounts for a minute proportion of the total number of vehicles on the road. The real question is,what’s really causing your health problems, NOX or your personal choices and lifestyle?
        Hmmm.

        • 0 avatar
          Ubermensch

          Only in bizarro-right-winger world does not wanting to breath in known carcinogens make one a “greenie” or “health nut”.

          • 0 avatar
            jrmason

            Nobody in their right mind wants to breath anything in that isn’t good for them. But just because you don’t own a diesel vehicle doesn’t give you the right to look down your nose at others and wash your hands of anything. Unless you live off the grid and are 100% self sufficient evertbody deoends on oil burners. It’s just that simple.

          • 0 avatar
            Pch101

            “Nobody in their right mind wants to breath anything in that isn’t good for them.”

            Apparently, you do.

        • 0 avatar
          jthorner

          We could eliminate a lot of global pollution by going back to making stuff close to where it is going to be used instead of all relying on giant factories in China. So what if the price of crap at Wally World went up? The vast majority of people already have more stuff than they know what to do with.

          • 0 avatar
            jrmason

            Absolutely. I live rural so I’m in a different situation than most on TTAC but I buy almost everything locally. I can count on one hand the number of times we’ve been to a large corporate chain store in the last 5 years.

        • 0 avatar
          RideHeight

          “what’s really causing your health problems, NOX or your personal choices and lifestyle?”

          Ya got me, bro. It’s on me that back in the ’70s I decided to go into anaphylactic shock from close exposure to diesel and fuel oil.

          It was the lifestyle of the times and it kinda stuck with me… anything for a rush, know what uh mean?

  • avatar
    sirwired

    “they are working at full speed to clarify irregularities concerning a particular software used”

    “Clarify irregularities”? Seriously? Is there a single person alive that would give any credence whatsoever to this example of mealy-mouthed meaningless corporate weasel-speak?

  • avatar
    sportyaccordy

    Wonder if they will contract APR to do the reflashes.

    Also wonder if Piech’s exit was related to this. Winkertorn just got canned.

    • 0 avatar
      brettc

      Hey VW, I’d gladly take a $1000 Malone Tuning gift certificate (for the engine and DSG tune) to take care of whatever fukkery was programmed into the ECU on these cars.

      11 million is a significant number, and halting diesel sales in Canada is really bad for them. It’ll be interesting to find out how high up this all went, but it probably was okayed by top executives. If it hadn’t been for those meddling WVU kids!

      • 0 avatar
        tedward

        It will be interesting to see if the eventual settlement impacts tuned cars. It may be as simple as getting the car reflashed having the update done and then going back to the tune. What if the epa wants verification at every inspection though? Are they going to ask every inspection certified garage to start using vagcom cables?

    • 0 avatar
      VoGo

      If VW is smart, they’ll go with Trifecta Tune. Then their diesel engines will run cleaner, get 60 MPG and complete the ‘Ring in 7 minutes.

    • 0 avatar
      DeadWeight

      VW has hired Norm already to assess their crisis and devise a diesel Trifecta Tune emissions patch.

  • avatar
    cwallace

    Bailout beneficiary GM admits to negligence in the deaths of 124+ Americans, and pays a whisker under a billion dollars in fines. VW cheats on an emissions test and is looking at an $18 billion liability.

    USA! USA! USA!

    • 0 avatar
      jmo

      Do you not see a difference between negligence and outright deliberate fraud?

      • 0 avatar
        mazdaman007

        A lot of people seem to have that problem when it comes to this story. I have no love for GM whatsoever, if GM had done this I would hope and expect they would be nailed to the wall just like VW is here.

    • 0 avatar
      VCplayer

      GM was fined the max that they could be under the law. I’d bet this doesn’t actually happen to VW, although their exposure to class action suits might end up costing them more.

      Also, it’s difficult to prove that anyone at GM knew they were killing people, and it’s difficult to prove that those 124 people were definitely killed by the defect. I’m not excusing GM’s culture, it’s just a lot more difficult to prove malice of any kind against a legal standard. $900 million was pretty reasonable under the circumstances.

      • 0 avatar
        tedward

        Here’s my take, i reserve the right to be completely wrong. That max fine figure seems like it was intended to ward off intentional failures by low volume high cost brands. Even rolls would hesitate to pony up 30k a car. Fining a foreign manufacturer that much would also probably require state department involvement as it could end up affecting any industry trading across that border if it sets up tit for tat trade war issues. That said, this situation does differ from the norm because they’ve admitted intent. It will be billions but not 18.

        The class action is still vaporware damages wise. There will be a large settlement regardless, but without shown economic damages (mileage below epa cert, savaged resale) there isn’t all that much to ask for. It’s all speculation so far as the fix isn’t out yet. Right now it’s just attorneys jockeying to be appointed as class rep.

        The doj fine has the potential to be large. They don’t have a rigid formula to follow so I’d expect their action to be negotiated after seeing what the epa levies. There’s definitely international political concerns that will limit this aspect of it. I predict it will bring the total federal fine cost to a pre arrainged amount.

        CARB is a wild card and I have no idea what their sanctions structure is or how they do business with violators. California literally has no skin in the game and its regulators and leadership have staked out a fairly industry hostile track record. It all depends on wether they need to get fines approved by the legislature. Those guys will be wary a little bit of motivating opposition among in state dealer networks at least.

        • 0 avatar
          Pch101

          “That max fine figure seems like it was intended to ward off intentional failures by low volume high cost brands.”

          The Clean Air Act penalties were intended to prevent one-off violations, such as the backyard mechanic or aftermarket shop who wants to remove the catalytic converters for kicks. Something similar to the VW case is unprecedented.

    • 0 avatar
      DeadWeight

      “Bailout beneficiary GM admits to negligence in the deaths of 124+ Americans, and pays a whisker under a billion dollars in fines. VW cheats on an emissions test and is looking at an $18 billion liability.”

      I made this relevant & logically sound point yesterday, & GM apologists went NUTS!

      VW set out to actively deceive pollution testing protocols prior to releasing their products, which is very bad, and is prima facie evidence of mens rea, but no loss of life or serious bodily injuries have yet been proven as a result of their malfeasance.

      GM released a defective ignition switch, discovered it was defective in 2003, was proven without doubt that it was defective and leading to injuries and deaths in 2005 – sat on and concealed this information, while trying to implement a “fix,” then lied repeatedly (hundreds if not thousands of times) when caught by Lance Cooper, after at least 124 people died (likely 2x to 3x higher) and hundreds were seriously injured (likely 2x to 4x higher in actuality).

      Das Strafschadensersatz!

      • 0 avatar
        yesthatsteve

        Plus, we’re dealing with two separate regulatory bodies with different parameters in terms of sanctions. It’s not GM’s fault the Clean Air Act gives the EPA bigger teeth.

      • 0 avatar
        dash riprock

        I too believe the GM ignition situation is much worse. The loss of life is in no way comparable to the loss of value that may be suffered by owners.

        But DW, the comments by others was not about which lying organization is worse, but about you becoming seemingly unhinged every time GM is mentioned(or you can provide a link in a story to GM). Your obsessive behaviour is tiresome.

    • 0 avatar
      jthorner

      CW, you are way behind the curve. You need to come up with a new talking point. The story has moved past the 500k cars first identified in the US and become 11 million vehicles sold world wide. So, find some new nonsensical moral equivalence argument to make.

  • avatar
    Jeff Waingrow

    If it weren’t for the EPA, the market would surely have exposed this quickly. Ok, so I’m editorializing. But in the real world, corporate big shots mostly do their thing, and all the lesser folk often suffer irreparable harm because of it. Isn’t it finally time to storm the corporate Bastille? Me, I’ll start with Winterkorn.

    • 0 avatar
      jmo

      “If it weren’t for the EPA, the market would surely have exposed this quickly.”

      Explain exactly how that would work? Why would there even been emissions controls if it wasn’t for the EPA?

      • 0 avatar
        Jeff Waingrow

        jmo, I was just trying to be satirical. Maybe I need to get better at it. Believe me, I’m no Grover Norquist. Quite the opposite. I’m for much more stringent oversight and focused regulation. Lord only knows where we’d be if corporations were left free to do as they wish. The only irony here is that VW’s Germany is one of the better regulated countries. I quake at the thought of an Indian Jaguar.

  • avatar
    VoGo

    This guy gets it (from Bloomberg):

    “Our company was dishonest with the EPA, and the California Air Resources Board and with all of you,” Michael Horn, the head of the VW brand in the U.S., said Monday in Brooklyn, New York, where he was revealing a redesigned version of the Passat. “We have totally screwed up. We must fix the cars to prevent this from ever happening again and we have to make this right. This kind of behavior is totally inconsistent with our qualities.”

    • 0 avatar
      sirwired

      This is the guy they should be using to interact with the press and public for the scandal. They need to fire whoever thought issuing a press release about “clarifying irregularities in the software” was a good idea.

    • 0 avatar
      jthorner

      Given that 11 million vehicles in global markets are involved, there is no way the cheating could be “inconsistent with our (VW’s) qualities.” It is impossible to cheat on such a broad scale without doing so being known and rewarded up and down the corporate chain of command.

      VWoA already has earned a horrible reputation for how it treats customers. Just ask anyone who got stuck with one of VW’s famous self-destroying sludge monster 1.8T engines. Eventually they sort of helped the owners out, but it took years of legal and regulatory pressure to get them to own up to the problem. At first they blamed negligent owners for years. Oh, and many VW fanboys on the ‘net went along with VW back then too.

      My conclusion: Arrogant disdain for customers and regulators is part of the VW Way.

  • avatar
    Joss

    Only blockheads could invent a poison like diesel then lie it off
    as clean billions $$$…

  • avatar
    DeadWeight

    Das Pollution!

    Das NOx!

    Schmutzig  Carcinogenic Particulate Lung Irritants!

    Die Übeltat vollbringen!

    Wir sind gefickt!

  • avatar
    VCplayer

    I wonder how many manufacturers are currently tearing apart rival vehicles looking for defeat mechanisms. I know I would be.

  • avatar
    TrailerTrash

    Two thoughts…

    Why is the larger V6 diesel not having the cheating software problem?

    And like my purchase of crap level Ford stock a few years ago…just waiting and watching to see when this stock will reach the level of BUY!

    • 0 avatar
      mazdaman007

      ‘Why is the larger V6 diesel not having the cheating software problem?’

      Just guessing here – perhaps because there is not as much of a HP/torque/fuel economy penalty as the smaller displacement engines when the pollution controls are working legally ?

  • avatar
    RHD

    Unless my early-morning math is wrong, VW is budgeting about 663 dollars per car to fix this problem. Either they already know of a quick, cheap fix or they are trying to minimize the drop in their stock price by kicking the financial can down the road.

    • 0 avatar
      ClutchCarGo

      I’m sure it’s the latter since there are many unknowns at this point. The current set aside number is just to show that they recognize a big problem exists.

    • 0 avatar
      sirwired

      The fix will be nothing more than a S/W re-flash. (Of course, that won’t “fix” the economy and power hit that’s going to cause.)

      I expect most of the money is for Cash-on-the-hood to move TDI’s that are now substantially harder to sell, and issue some financial compensation to owners for diminished value. (But in the end, I don’t think $668 is going to cover it.)

    • 0 avatar
      bball40dtw

      $663 ain’t sh!t. I received $850 from Ford for the C-Max mileage issue. They also paid for a software fix and gave me a bumper to bumper warranty for 7 years/125k miles because I complained a lot.

  • avatar
    jmo

    Winterkorn’s been fired:

    http://www.tagesspiegel.de/wirtschaft/newsblog-zum-abgas-skandal-bei-volkswagen-aufsichtsratskreise-vw-chef-martin-winterkorn-wird-abgeloest/12351882.html

  • avatar
    APaGttH

    So wait, if I am to believe the conspiracy theorists that post here, this was just the heavy hand of the EPA picking on poor VW to fulfill their plot of making everyone drive Chevy Sparks.

    Now the story is 11 million vehicles – globally. Some countries won’t care, others will come down harder than the US. So at what point does this stop being a witch hunt and you folks admit this was organized, planned, and approved corporate malfeasance on a colossal scale.

  • avatar
    SCE to AUX

    $7.3 billion?

    “You’re gonna need a bigger boat”

  • avatar
    jthorner

    “The automaker has also admitted that the software, which includes a ‘defeat device’ to hide on-road NOx emissions, has been used on 11 million vehicles sold worldwide.”

    I’ve always assumed that this would become a much bigger story than half a million US market vehicles. A company does not play this kind of deceptive game just once, because doing so requires a deep seated culture of self-justification which will do the same thing over and over again.

    How many other ways has VW intentionally cheated?

    How many VW employees will now start blowing the whistle and/or cutting deals with prosecutors?

    This could well collapse the entire VW enterprise just as Enron and Arthur Anderson collapsed under the weight of their criminal actions.

  • avatar
    28-Cars-Later

    Here’s a question, how will this affect gas VW sales and thus impact Chattanooga?

    • 0 avatar
      jthorner

      I think it will hurt all VW sales, gas or diesel. Personally I was thinking seriously about test driving a Golf Sportwagon as there are almost no alternatives in the reasonably priced station wagon class.

      But now, do I want to potentially own the product of a cheating company which might collapse and leave me with an orphan vehicle?

      Nope.

  • avatar
    jthorner

    Oh boy, the competitors’ attorney’s might pile on as well:

    “No doubt we will hear a lot from plaintiffs’ attorneys representing the poor car buyers but I guess the group that would have been hurt most would have been the other car manufacturers who compete with Volkswagen,” said one Swiss-based hedge fund manager, speaking on condition of anonymity.

    http://news.yahoo.com/volkswagen-shares-plunge-emissions-scandal-u-widens-probe-000939690.html


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