By on January 4, 2016

2013-volkswagen-lineup

(UPDATE: Updates the story throughout, including penalty figures. Volkswagen comment.)

The Justice Department on Monday filed a multi-billion dollar lawsuit against Volkswagen for illegally selling emissions-cheating cars in the U.S. from 2009 until last year and said the automaker withheld information about its 3-liter diesel engine’s “defeat device” after investigators uncovered the scandal.

The lawsuit, filed in eastern Michigan court, seeks more than $40 billion in damages from the automaker.

In announcing the lawsuit, officials from the Environmental Protection Agency signaled that regulators and officials may be at a standstill with Volkswagen regarding how it intends to fix its cars in the U.S.

“So far, recall discussions with the company have not produced an acceptable way forward. These discussions will continue in parallel with the federal court action,” Cynthia Giles, assistant administrator for enforcement and compliance assurance at EPA, said in a statement.

The lawsuit details how Volkswagen allegedly installed software to alter its cars emissions during tests beginning in 2009 and denied claims by regulators that its cars illegally polluted. In the complaint, attorneys wrote that Volkswagen deceived investigators after September 2015 — when Volkswagen admitted its 2-liter diesel cars cheated emissions tests — regarding an investigation into Volkswagen’s 3-liter diesel cars for the same “defeat device.”

From the Department of Justice lawsuit:

The United States’ efforts to learn the truth about the emission exceedances and other irregularities related to the 3.0L Subject Vehicles, including whether VW had committed the violations of federal law alleged herein, were impeded and obstructed by material omissions and misleading information provided by VW entities including at least Volkswagen AG and Audi AG.

In the lawsuit, U.S. environmental officials asked for up to $37,500 for each of Volkwagen’s 580,000 illegally polluting cars, and an additional $37,500 per car for “tampering.” The lawsuit also seeks up to $3,750 for each “defeat device” and up to $37,500 per day for Volkswagen’s violation beginning in 2009. All told, the penalties could top $40 billion.

Last month, California Air Resources Board and EPA officials said they would be postponing its review of Volkswagen’s fix for its polluting cars because of additional information provided by the automaker. EPA officials were slated to rule on Volkswagen’s fix in late December, before pushing that date back to later this month. It’s unclear from the EPA’s statement Monday if Volkswagen’s fix is still being considered by regulators.

A spokesman for Volkswagen issued the following statement after filing the lawsuit:

Today, the United States Department of Justice, on behalf of the U.S. Environmental Protection Agency (EPA) filed a civil lawsuit against Volkswagen, Audi and Porsche in the United States District Court for the Eastern District of Michigan. The claims in the Complaint pertain to the 2.0L and 3.0L TDI engine equipped vehicles that have been the subject of EPA investigations and allege violations of the same provisions of the Clean Air Act as were noted in the EPA’s September 18 and November 2 Notices of Violation.

Volkswagen will continue to work cooperatively with the EPA on developing remedies to bring the TDI vehicles into full compliance with regulations as soon as possible. In addition, we are working with Kenneth Feinberg to develop an independent, fair and swift process for resolving private consumer claims relating to these issues. We will continue to cooperate with all government agencies investigating these matters.

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164 Comments on “UPDATE: Feds File Lawsuit Against Volkswagen For Approximately $40 Billion...”


  • avatar
    DeadWeight

    Breaking News:

    U.S. DOJ demands payment from VW equal to 10 billion USD for each person injured or killed by defective General Motors ignition switches in order to resolve emissions violation.

    • 0 avatar

      I’m not really joking when I make the statement that – if you died because you couldn’t ‘control’ your Cobalt when the ignition turned off – you probably shouldn’t be operating a motor vehicle.

      • 0 avatar
        DeadWeight

        Let’s just hope General Motors/Shanghai Automotive has those made 100% in & exported from China Buick Envisions well sorted out!

        • 0 avatar
          bball40dtw

          I doubt they are made much better or worse than other GM products.

          • 0 avatar
            DeadWeight

            General Motors should have built them in that abandoned Mitsubishi plant in Illinois.

            They could have named it the Buick Zero.

          • 0 avatar
            bball40dtw

            Yeah, that’s what GM needs, the old Diamond Star Motors plant. Because when I think of quality, I think of the 2004 Chrysler Sebring Coupe and 2012 Mitsubishi Galant…

          • 0 avatar
            DeadWeight

            Buick Rendezvous – GM Mark of Excellence.

          • 0 avatar
            bball40dtw

            Nothing like a hideous U-Body roaching around. The first time I saw a Rendezvous was when Tiger Woods was in my small town the week of the Buick Open. He must have looking for Big Boy or Red Robin waitresses to bang.

      • 0 avatar
        CJinSD

        Flybrian,

        I’ve had cars where the steering wheel locks when the key is in the off position. From what I understand, the airbag shuts off when the key is turned to off as well, as is the power assist of the brakes. Did the Cobalt have a steering column lock? If it did, I wouldn’t hand out any Darwin Awards beyond the honorable mention that goes to anyone who buys a Detroit-3 vehicle.

      • 0 avatar
        wumpus

        I’ve known at least one car that lost all steering (not sure about braking) without power. Of course, I don’t know how hard a jolt it would take to turn my (then, pretty hefty) keychain.

        Makes me miss non-power steering (then it snows and I learn just how much I love traction control).

    • 0 avatar
      CarnotCycle

      The emissions-defeat mess for Volkswagen has done more than the normal civil-liability-fraud thing, it has made them fresh meat for the CO2 doom-cult, an important political market currently.

      GM and its union on the other hand are a more important political market than the ignition-switch victims.

      An interesting contest politically-speaking would be if GM got caught in a massive emissions-defeat scheme; who would win in determining GM’s penalties given our current political regime – unions or the CO2 cult? The CO2 cult won with Keystone XL last time these factions were on opposite sides of a political question, but only with labor stakes much smaller, and nobody making a move until all electoral considerations were past the current regime’s time-horizon.

      • 0 avatar
        FreedMike

        “CO2 cult”…”unions”…”current regime”…thanks for the laugh.

        Car emissions regs have been around for almost 50 years. Why? To make sure you and your family aren’t breathing in too much pollution. Evil and socialist as this may be, VW knew this and broke the damn law anyway.

        But you stay focused on your bogeymen.

        • 0 avatar
          Hummer

          Yes car emission regulations are great, no one will disagree with that, pollution is bad, but CO2 is clearly not a pollutant and it is being used as a bogeyman by those with power to gain more power.

          • 0 avatar
            Drzhivago138

            Mind providing a source for the “clearly” part?

            And even if it’s not a pollutant, it’s still a greenhouse gas.

          • 0 avatar
            heavy handle

            CO2 has nothing to do with the VW NOx scandal. The only people who bring CO2 to the table are delusional conspiracy theorists. To them, anything that has to do with emissions must be about CO2, and therefore Al Gore(?)… or something.

            Ironically, air quality has long been a non-partisan issue in the US, with the greatest progress made under Nixon’s administration.

            All in all, CO2 conspiracy fantasies are probably a fairly effective use of these people’s time, given the alternatives.

          • 0 avatar
            Hummer

            Petroleum comes from decaying fossils, once living creatures, so we can safely assume that these creatures existed before a time of large expanses of petroleum in the earth; which would mean that the carbon based life forms that left the petroleum pockets existed under much higher carbon levels.
            So with minimal deductions life can and will exist with higher carbon levels in the atmosphere. Since there is a constant cycle of life and decay on the earth then there is a consistent loss of CO2, even if we assume that the output is higher than the input; which from what I was taught in school isn’t happening.
            It’s a natural cycle, petroleum still natural bubbles out of the ground and out of the sea floor. If we are to believe that we can overload the atomosphere with CO2, then the precedence is there that similarly we can create an situation where we don’t have enough CO2, which is stupid and should be seen as stupid under both conditions of too much and too little.

            But this is about NOx emissions which is clear and unequivocally seen as a pollutant.

          • 0 avatar
            FreedMike

            Hummer, yes, CO2 IS a pollutant. Put it into the atmosphere, and the atmosphere retains more heat. That is settled science.

            Now, if you want to discuss whether OUR produced CO2 is the culprit behind our current warming, then I guess that’s another question. But given that we know that CO2 causes warming, and that humans make it in vast quantities, questioning that is a lot like telling your doctor you’re not going to stop smoking until he proves that cigarettes are 100% guaranteed to give you lung cancer. Yes, people smoke for 80 years and die when they’re run over by buses, and lung cancer is caused by any number of other things, so the link is not 100% causative. But you’d be an idiot to test that theory on the only body you have.

            Multiply that by 8 billion people, and that’s how stupid we’d be as a species to ignore scientists’ advice on global warming.

          • 0 avatar
            dal20402

            “We can safely assume that these creatures existed before a time of large expanses of petroleum in the earth; which would mean that the carbon based life forms that left the petroleum pockets existed under much higher carbon levels.”

            This is probably true. What is far from guaranteed is that humans would fit into the category of carbon-based life forms that could exist under much higher carbon levels, particularly at the scale and in the places where they exist today. Of note, if CO2 concentrations continue growing at the present rate, the place where you live is likely to have such high summer wet-bulb temperatures as to make it very difficult for humans to survive outdoors for any length of time. Kuwaiti summer weather, coming soon to your local U.S. southeastern state.

          • 0 avatar
            Pch101

            “CO2 has nothing to do with the VW NOx scandal. The only people who bring CO2 to the table are delusional conspiracy theorists.”

            To be fair, there are a lot of grunts, uneducated folks and idiots who simply don’t understand the differences. They hear the word “emissions” and don’t realize that we’re talking about two different categories of emissions with two different effects.

          • 0 avatar
            Pch101

            “CO2 IS a pollutant”

            In the broader sense, it is — CO2 is a greenhouse gas that contributes to climate change when produced to excess.

            But CO2 doesn’t contribute to smog, which is what most people are thinking of when they think of air pollution. CO2 won’t give you emphysema or lung cancer as can the particulate matter from NOx.

          • 0 avatar
            wsn

            “Hummer, yes, CO2 IS a pollutant. Put it into the atmosphere, and the atmosphere retains more heat. That is settled science.”

            Even if the warming part is true, why is CO2 a pollutant? I want a warm up.

          • 0 avatar
            RobertRyan

            In concentrated amounts and it can kill.and has in Africa, killing 1700 people near a Lake that was Co2 rich. Lesser amounts can cause other problems with people

          • 0 avatar
            FreedMike

            “Petroleum comes from decaying fossils, once living creatures, so we can safely assume that these creatures existed before a time of large expanses of petroleum in the earth; which would mean that the carbon based life forms that left the petroleum pockets existed under much higher carbon levels.”

            Great, except prehistoric life forms didn’t have to worry about supporting an industrialized human population of upwards of eight billion. They didn’t have to worry about agriculture. They didn’t have to worry about the world’s economy. They didn’t have to worry about water and food supplies going away and hundreds of millions of resultant refugees.

            They didn’t have to worry whether New York would end up under water.

            Silly comparison.

          • 0 avatar
            Drzhivago138

            @wsn: Because as nice as some people think warmer temperatures would be, there’s a lot of things we humans are dependent on that would be negatively affected by climate change. Mostly agriculture. I’ve already noticed some minor changes in the fields in the past 15 years that could really screw things up down the road.

          • 0 avatar
            wsn

            @Drzhivago138

            I do agree that a global warming will definitely hurt parts of human living. However it will also benefit parts of human living. Overall, I wouldn’t say the net result would be bad.

            P.S. I live in Canada. The vegetation line has consistently pushed north in recent years, which is great news for agriculture.

          • 0 avatar
            Hummer

            I keep hearing the gloom and doom of ice melting and the oceans washing away massive tracts of land, every year during the polar regions “summer” we hear of massive amount of ice loss. And every “winter” you’ll quietly see that their is more new ice than what was lost in the previous “summer” period.

            Nothing is happening, naturally some outer banks areas are susceptible to being washed away either due to manmade changes (i.e. Morris Island outside Charleston) or due to natural changes in the oceans currents or even hurricanes that can and will wash away current islands/tracts and create new islands/tracts with the same sand 10 miles away (Hwy 12 OB). But core land hasn’t had any issues with land loss that can’t be directly correlated to the natural ebb and flow of nature.

            But seeing how neutral this entire conversation is I wouldn’t want to stir this up on a article concerning NOx emissions.

          • 0 avatar
            JalopNick

            Couldn’t reply to the post below, so I’m posting this here:

            The “clearly” part may have a lot to do with the fact that nobody has any problem when you breathe out (CO2) in their general direction (you exhale air with a CO2 concentration about 100 times higher than that in the atmosphere). This “pollutant” you’re talking about is the very basis of the trophic chain (i.e. those things you ate today would not exist in the absence of or even with diminished concentrations of atmospheric CO2).

            If you took a moment to look beyond the “settled science” that posits that any atmospheric warming/cooling surely has nothing to do with the variance in the sun’s radiance but has everything to do with my SUV and the tiny bit of CO2 it adds to the already massive 0.04% CO2 in the Earth’s atmosphere, you’d notice that this CO2 idiocy has actually moved the conversation away from actual pollution reduction and into some completely meaningless save-the-planet-by-giving-me-your-money direction.

            On a side-note, I drive one of these “non-compliant” 3.0L diesels. It stinks a lot less and its tail pipes are a lot cleaner than those of my other (less than one year old) gas-burning vehicle. Say what you will but with EGR and urea injection it is way cleaner than many other vehicles sold today. I also have an older Diesel at my home in Europe and there is absolutely no comparison between what comes out of that one’s tail pipe vs my NA diesel.

            This is all a bunch of hogwash and a massive shakedown of a manufacturer that was probably insufficiently “friendly” to certain parts of the administration.

          • 0 avatar
            RobertRyan

            @Jalopnik,
            Agreed on the vindictiveness of the fine. I feel as I have posted before, that if they keep on being ” nasty” this whole thing will bite them
            Not many parties in Europe, even those not associated with VW will be impressed.

          • 0 avatar
            Frylock350

            @Hummer,

            Your assumption that C02 used to be at very high levels is absolutely correct, in fact during most of the Earth’s lifespan its been much hotter and more humid than it is today. The irony is that the time period in which the fossil fuels were created had a climate more similar to today’s than other periods. The fossil fuel we burn today specifically come from plant matter laid down in the Carboniferous period long before the first dinosaur evolved. In fact basal reptiles were just beginning to establish themselves at this time. The Carboniferious (as its name implies) saw explosive plant growth, which pulled massive amounts of C02 out of the air and essentially deposited it in the ground. It also elevated oxygen levels to ~35% IIRC versus the ~20% we have today. Many consider us to still technically be in an ice age in terms of climate. Remember when dinosaurs roamed the earth the poles were heavily forested and very much alive with a very diverse set of megafauna, not the frozen nothingness they are today.

            So can life (and when we say life most people mean multicellular plant and animal life) survive in a much hotter and more humid climate? Obviously, it has an will.

            HOWEVER, much of the life that exists today is not well adapted for such a humid and hot climate. Some species that can adapt quickly (short lifespans, high reproductive rates) will do so and be fine. Others will suffer. Generally massive short term climate change is met with mass extinction. Most folks know about the K-T extinction event that ended the (nonavian) dinosaurs and 75% of all species on earth. Most don’t know that its just one of five similar events. The P-Tr (Permian-Triassic) extinction was even more deadly, killing 90% of all living species. The P-Tr extinction event’s likely cause? Climate change (caused by natural factors of volcanism, plate tectonics, etc).

            Note that mass extinctions are neither good nor bad, they’re just a thing. Extinctions are like a phoenix, species and lineages die and others rise from the ashes to take their place and fill the same ecological roles. if the massive synapsids didn’t go extinct at the end of the Permian, dinosaurs may not have evolved. If non-avian dinosaurs didn’t go extinct no mammals may have evolved fill those niches. All of this had to happen for a bipedal primate to become us. Question is can we survive the next extinction event or will the age of mammals be over?

        • 0 avatar
          CarnotCycle

          I am not talking about car-emission regs being evil or socialism or climate change or anything of the sort; I am talking about political markets, and how those are what dictate these arbitrary prosecutions and fines-by-fiat.

          The CO2 doom-cult is a cultural catch-all conflation for anything adverse in the air – why do all the CO2-doom books have covers of black-smoker funnels otherwise? – and the current regime has made that cultural catch-all a pet-project. This makes them a significant political market, and will therefore make VW’s cheating much more expensive for VW than otherwise.

          But what if the cheater had been GM? They too are a vast political market for the current regime, indeed are another pet-project. Would they be getting sued by the government? Or to reverse the question, how would VW be doing if they had been knowingly making defective vehicles that were killing people by the dozen?

          It is all a question of political markets when it comes to these decisions by fiat. That is all I am saying.

          • 0 avatar
            Hummer

            Those are the best when they show nuclear power plants with towers blowing out steam with the book title stating the evils of CO2 and the such.
            These people are so clearly frauds that it can’t get much funnier.

          • 0 avatar
            FreedMike

            “But what if the cheater had been GM?”

            Well, we don’t know what the final figure will be for VW, but it was upwards of $1 billion for GM. I’m not sure what the point of the comparison is.

          • 0 avatar
            RobertRyan

            VW’s Lawyers, will be looking for a similar amount as they did not kill or injure people

          • 0 avatar
            Drzhivago138

            @Hummer: Using inaccurate photographs, while by no means a good thing, doesn’t mean that the core argument is false. Every picture I’ve seen in a textbook of towers blowing out “steam” /was/ actually a coal plant.

        • 0 avatar
          tonycd

          Couldn’t have said it better myself, freed. And that goes double for the usual bozo trying to turn this into a GM thread.

          More interesting to me is that the EPA action itself signifies. They’ve got to know that even VW can’t come close to ponying up that kind of money. I have to assume this is arm-twisting to induce serious negotiations. Just amazing that VW remains so arrogant that they’re evidently taking an obstinate enough line to force the EPA down this road. Guess they really never do learn.

          • 0 avatar
            CJinSD

            “Couldn’t have said it better myself, freed.”

            He must be so proud.

          • 0 avatar
            DeadWeight

            Blah blah blah.

            GM’s fifty-cent-saved defective ignition switches killed, at minimum, 179 people (probably 5x that), and seriously injured thousands more, with GM knowing of the defect back in 2005 and doing nothing at first, and then a “silent keep the part number the same but have Delphi redesign the cylinder” d!ck move, and yet GM has paid out less than 1/40th of what the DOJ is now seeking from VW for emissions violations.

          • 0 avatar
            RobertRyan

            GM is a US company VW is not and was No.1 Ridiculous fine is going to be looked at as a political gesture, not outrage at what VW has done.

          • 0 avatar
            heavy handle

            “They’ve got to know that even VW can’t come close to ponying up that kind of money.”

            The obvious solution is for the EPA to get a cut of VW’s business. VW already belongs, in part, to the State of Saxony and to Qatar, so why not?

          • 0 avatar
            Pch101

            “They’ve got to know that even VW can’t come close to ponying up that kind of money. I have to assume this is arm-twisting to induce serious negotiations.”

            Good assumption. Reading between the lines, VW is probably not cooperating (or at least the feds don’t believe that VW is cooperating.)

        • 0 avatar
          28-Cars-Later

          He’s right though, I don’t see the current powers in DC throwing a $40B lawsuit against the company they “saved” for any reason whatsoever. GM’s negligence *did* kill people regardless of the exact pre or post bankrupt circumstance. Since VAG is foreign they have no issue making an example of them for daring to defy a fedgov edict. A defined loss of human life (179 or so) is worth $900 million, EPA non-compliance 40x times that, probably settle for 10x to 20x. Makes sense in the bizzaro world.

          http://www.usatoday.com/story/money/cars/2015/09/17/gm-justice-department-ignition-switch-defect-settlement/32545959/

          “your family aren’t breathing in too much pollution”

          The amount of which was statistically insignificant due to the low number of sales in CONUS. The proposed punishment does not fit the crime in this case. The US Attorney is going for the throat, not “justice”.

          • 0 avatar
            RobertRyan

            That is just plain stupid. EU under German pressure, wants Taxes not paid by US Tech companies. Starts a Global push against profit shifting, US economy could be big loser.Make Chicken Tax look like a very minor dispute

          • 0 avatar
            Pch101

            The new GM is not responsible for crashes that occurred prior to its existence. It is responsible for doing the recall repairs and for crashes that have occurred since the bankruptcy, but that’s it.

            It’s that simple. It’s not a conspiracy, and it’s the norm for companies that purchase assets out of BK to not be responsible for what took place prior to its purchase. The new GM has actually accepted more responsibility than usual.

          • 0 avatar
            CarnotCycle

            “The new GM is not responsible for crashes that occurred prior to its existence. It is responsible for doing the recall repairs and for crashes that have occurred since the bankruptcy, but that’s it.”

            That is all technically true; but there is history of politically-amplified damage in the auto-business from things that never were even empirically demonstrated, such as the Audi mystery-acceleration-braking days, or the more recent mystery-Prius-runaway acceleration fine of $3 bln.

            It is also worth noting if letter of laws regarding corporate financial liability had been followed, GM would no longer exist at all – new or old, liable here or otherwise. Its very existence today directly correlates to value of the thing as a political market.

          • 0 avatar
            28-Cars-Later

            @Pch

            I agree, but I think most would agree the GM bankruptcy was not a normal one. GM’s good assets, brands, and employees were transferred from “Old GM” to the new LLC. The same people, culture, and products which were liable were put into a new company with the same name and brands. This isn’t the same as parts of a company being purchased in Chapter 7 liquidation by a third party, or divisions being sold off as part of Chapter 11. Using this model, generally speaking wouldn’t it make sense for companies to take themselves into bankruptcies and reconstitute every ten years or so in order to avoid any possible liabilities from their business practices?

          • 0 avatar
            Pch101

            The old GM used a 363 sale to sell off its assets to the new GM. Perfectly legal.

            As noted, the new GM took on **more** obligations than the law would require. Not fewer, but more.

          • 0 avatar
            FreedMike

            28, until the final number is known, then we’re just speculating. I’m sure it will be a lot less than $40 billion.

            But that’s what happens when you directly hose over 580,000 buyers. As bad as the GM ignition failure was, it only affected about 175 people directly (and that assumes NONE of them would harmed if the switch worked properly, which I don’t buy at all). The fix for the rest of them was fairly inexpensive and easy – pop out the old ignition, put in a new one. I bet VW wishes it could fix all those TDIs that easily.

          • 0 avatar
            28-Cars-Later

            Thanks for the reply, I looked up what a 363 was and found this informative article.

            http://www.chadbourne.com/files/Publication/4dbdca20-38ed-4d4c-bc04-a637b7a6997d/Presentation/PublicationAttachment/962b73fc-20b1-4652-88a3-a8b84134f4b8/blocks%202-11.pdf

          • 0 avatar
            28-Cars-Later

            @Freed

            I agree it won’t be $40B, it will be settled for much less. But even $10B is over 10x the amount settled for in the GM ignition lawsuit which took 179 (or more) lives (GM’s voluntary actions vs obligations aside). I’d rather be one of the half a million affected people when the purchased product actually is working the way it was designed, over being dead due to negligence of the product I purchased. The fine value of human life is apparently less than than value of compliance with the myriad of federal regulations.

      • 0 avatar
        smartascii

        Uh, guys? The defeat device impacted Oxides of Nitrogen emissions, not CO2. Diesels emit less CO2 than an equivalent gas engine. NOx are a respiratory irritant and a significant contributor to smog and acid rain. Although the total impact of the few VAG diesels in the USA is probably minuscule, the fact remains that the illegal emissions in question ARE harmful. I mean, so is CO2, but the “Climate change is a conspiracy perpetrated upon us because of something something” crowd thinks they’re smarter than everyone else about that, so fine. I’m not aware of any NOx-is-harmful deniers out there.

    • 0 avatar
      RobertRyan

      @DeadWeight
      I suspect BMW and Daimler will also see it, as an Anti German ,Anti European measure, that could signal a new ” Chicken Tax” between the EU and the US.
      The fine is ludicrous

      • 0 avatar
        jpolicke

        BMW & Daimler will sit back, shut up and high five each other that it ain’t happening to them. Neither they or Ms. Merkel will do anything else, knowing that we can do without German cars a lot easier than they can do without the US market.

        The fine may be ludicrous, but it was posted in the regulations for all to see. VW decided to gamble on whether they would get caught and on how successfully they could plead hardship to minimize the penalty.

  • avatar
    Storz

    Still waiting for VW/EPA/CARB to tell us they are going to deal with the 325k non-Urea equipped 2 liter diesels out there.

    • 0 avatar
      MrGrieves

      My guess is that VW proposed retrofitting a Urea system to these cars, and CARB (EPA) told them no way – you need to buy them back, to which VW said “Nein.” So the feds have turned up the pressure with this lawsuit.

      IIRC, there was a statement made by CARB before the holidays indicating that they did not like the idea of a retrofitted system, as they rarely performed as intended.

      • 0 avatar
        Storz

        Agree completely, I as the customer don’t want a car that has been that extensively modified even if it is by the dealership.

        Buy back is the only answer.

        • 0 avatar
          Lorenzo

          That’s not the ONLY answer. There’s another one: keep all the cars with the defeat device on the road as-is. They’ll be off the road eventually, and given Volkswagen’s reliability and expensive repair and parts, eventually will be fairly soon. The added pollution is a drop in the bucket compared to what China puts out.

          Volkswagen can simply agree to stop making the defeat device, and just like other big US businesses, will sign a settlement that says, “We didn’t do it, and we promise not to do it again.” If big banks and brokers can do it, So should Volkswagen, and the EPA needs to back down on their ‘remediation at any cost’ demands.

      • 0 avatar
        NeilM

        MrGrieves writes: “My guess is that VW proposed retrofitting a Urea system to these cars, and CARB (EPA) told them no way – you need to buy them back, to which VW said “Nein.” So the feds have turned up the pressure with this lawsuit.”

        My guess is the exact opposite: The EPA points out to VW that only a urea system, which is what everyone else already uses, will produce compliant results. VW responds that the cost/degree of difficulty for a retrofit makes this impractical.

        Don’t underestimate how hard it would be to install, and find room for, all the tank/plumbing/control gubbins that a urea system requires. In cars not designed for this it could require a new, reduced capacity fuel tank to free up space for the urea tank. Installation cost alone would be breathtaking.

        Of course so is a $40B lawsuit.

      • 0 avatar
        Scoutdude

        The problem is that they haven’t submitted their plans to the EPA yet which is pissing them off. They have submitted a plan to CARB, withdrew it resubmitted something else.

        If VW proposed DEF retrofitting, that was shown to meet the standard and did not include a defeat device, you can bet CARB and EPA would gladly accept it. CARB and EPA would have to allow it and don’t have the power to cause VW to buy back cars IF they present something that will work and show a reasonable time frame to fix the cars still in use.

    • 0 avatar
      brettc

      People keep asking me if I’m going to get the “recall” done so I’m always confused by that since there is no recall (yet).

      Either way, I tell them that VW isn’t touching my car. My car had enough dealer caused problems stemming from visits during its carefree maintenance window, so why would I willingly take it back for them to add a bunch of untested emissions equipment?

  • avatar
    fendertweed

    I guarantee you there is also an ongoing criminal investigation seeking to charge the highest ranking corporate officials concerning whom there is evidence to support charges.

    It seems highly likely IMO that there will be criminal charges eventually.

  • avatar
    honda_lawn_art

    The EPA just dumped 3,000,000 gallons of toxic waste into the Animas River and we’re supposed to shrug. If it’s the EPA’s intent to name VW as automotive public enemy number one, it’s lost on me. VW has as their bread and butter always had some of the more environmentally responsible vehicles available in the US, especially when viewed across a companies entire range; not saying VW’s blatant cheating effort should go unpunished.
    You can lambaste VW for their commitment to pollution, but you also better be against the Keystone Pipeline, and you’d have to park your Tahoe, etc.

    • 0 avatar
      RobertRyan

      @honda lawn art
      It is a political act that is now trying to cripple one of the biggest threats.to the US Automotive Industry. I wonder when the next big surprise will be about Toyota? People who live in glass houses should not throw stones.
      Apple and a few other US Corporations have not paid their fair share or any taxes. Wonder if they will be the revenge target for the EU? As the anti VW, as against GM bias will not be seen in a good light by the EU

      • 0 avatar
        sirwired

        VW is “one of the biggest threats to the US auto industry”?

        Are you serious? VW has been struggling for years due to their complete and total ignorance of the US market, and all the TDI’s in the world don’t fix that. They were floundering in the US well before the TDI scandal broke.

        • 0 avatar
          RobertRyan

          No, not in the US, but globally yes. VW was no 1 Globally. BMW and Mercedes are the top luxury makers in the US market
          EU reaction to this could be very negative as Germany is the Powerhouse of the EU economy Down the track expect reprisals and they will not be nice.
          http://www.theguardian.com/business/2015/oct/04/vw-scandal-is-heavy-blow-for-german-economy-says-eus-martin-shulz

          • 0 avatar
            Scoutdude

            Just keep in mind that this whole thing was uncovered by Europeans that were trying to show how a US spec car was cleaner than the euro spec cars to encourage outrage about the lax Euro standards.

            VW then begged to get screwed in the US. The cars that uncovered the problem in the US were vehicles with DEF systems that shut off when the computer didn’t detect it was under test conditions. CARB found the trick by running over the test cycle again w/o shutting the vehicle down and restarting the timer. VW was called out and then “fixed” the cars with an update that just extended the time that the vehicle would run compliantly. CARB ran the test for longer than the new timer and that is when the stuff hit the fan.

            The EPA then went Hmmm and decided to test other VW vehicles and when the EPA figured that they also used a defeat device VW denied that it did.

            So if they would have fixed the DEF equipped vehicles from the start rather than trying a second cheat they probably could have prevented the scandal from getting so big if it even made it to scandal status.

            If they had come clean with respect to the 3.0 vehicles the EPA probably would not be filling the lawsuit at this time.

          • 0 avatar
            RobertRyan

            A $40 Billion lawsuit, by the US EPA is a fine unrelated to the wrong and will invite retaliation, 11million vehicles were affected outside NA,(maybe 800,000 )in the US little in the way of lawsuits outside NA

          • 0 avatar
            DenverMike

            “Retaliation” my A$$. I say bring it. Europe and Germany knows Mercedes, BMW, Audi and Porsche are heavily reliant on US sales. Southern California snobs, d-bags and Yuppies *alone* keep the lights on at those OEMs.

    • 0 avatar
      30-mile fetch

      “The EPA just dumped 3,000,000 gallons of toxic waste into the Animas River”

      Well, it’s probably more accurate to say EPA incompetence triggered the mass spill of waste water that was already leaching at hundreds of gallons a minute into the stream on which it was located, killing fish for miles downstream in the Animas for years before the spill. The EPA didn’t dig the mine, create the toxic waste water, then abandon it for future generations to deal with. They just took the effects of private greed, and used bureaucratic ineptitude to transform it into something truly spectacular. Teamwork.

    • 0 avatar
      brn

      I can’t believe I’m responding, but…

      “The EPA just dumped 3,000,000 gallons of toxic waste into the Animas River and we’re supposed to shrug.”

      The EPA made a mistake and I assure you they feel horrible about the environmental impact of what they did.

      What VW did was intentional and I assure you they feel horrible about getting caught. Once caught, they continue to try and cover up what really happened.

      “VW has as their bread and butter always had some of the more environmentally responsible vehicles available in the US”

      Based on what? Lies? That’s why they’re in trouble.

      “you also better be against the Keystone Pipeline”

      What are they lying about?

      Are you seeing a pattern here? Lies, lies, and more lies. That’s why VW is under the gun.

      “and you’d have to park your Tahoe, etc.”

      VW Touareg, Audi Q7.

      • 0 avatar
        28-Cars-Later

        Can we fine the EPA $40B? Law tends not to be about “feeling bad” for a crime being committed.

        • 0 avatar
          DeadWeight

          Governmental agencies, departments and the federal government itself can only be liable for civil damages if Congress specifically passes legislation making it so by specifically enumerating a cause of action exempting said governmental entity from “immunity.”

      • 0 avatar
        CJinSD

        If you believe the EPA didn’t know what they were doing to the Animas River, how can you believe they’re competent enough to justify their budget and authority? The Animas was just another of their draconian penalties for noncapitulation.

        • 0 avatar
          FreedMike

          It’s called an “accident.”

          Good lord…paranoia run rampant.

          • 0 avatar
            28-Cars-Later

            Similar accidents cost people their livelihoods or freedom. Do you or I get an “oops my bad” pass if we screw up in a similar manner?

          • 0 avatar
            dal20402

            Actually, yes, we often do get a “oops my bad” pass, depending on the offense.

            Many crimes require intent, either to commit the particular crime or to commit an act that foreseeably gave rise to the crime.

            Even outside of criminal liability, so-called “strict liability” is relatively rare except in product liability. Usually you have to have been at least negligent to be held civilly liable. In many cases the standard rises to gross negligence, which amounts to “there is no way in hell you couldn’t have seen this coming.”

            And even where you have been negligent, judges and juries tend to be more forgiving if the facts show that it really was an accident and that no evil practice or grossly excessive penny-pinching was behind it.

            Even the IRS will sometimes accept “my bad” in many contexts if the circumstances are favorable (with the notable exception of employment taxes).

          • 0 avatar
            jkross22

            The Affluenza defense.

  • avatar
    GermanReliabilityMyth

    Stay tuned for the Nuremberg Trials, part II!

  • avatar
    tylanner

    I continue to find this case fascinating.

    How will the world governments will respond to large, global-market shifting fraud?

    The intent and scale warrant severe punishment but how exactly do you make them and every other future emitter feel the full wrath of Captain Planet?

  • avatar
    Speed3

    It seems like the Feds are throwing the book at VW but GM got off pretty lightly. I realize that in VW’s case there was criminal intent, but surely there was criminal negligence at GM.

    I would really love to read a piece that explains this.

    • 0 avatar
      Hummer

      The EPA has a lot more power to go after VW than the agency that dealt with GM.

    • 0 avatar
      jmo

      GM went bankrupt so any fines would be paid by the bankruptcy estate. VW is still a going concern.

    • 0 avatar
      notwhoithink

      The Feds asked for larger damages against GM as well, but in the end GM got off paying a lot less. VW will, too. But when you’re filing a lawsuit to use as negotiating leverage, you ask for the absolute maximum penalty that can be levied, which is what the DoJ did here. If they asked for $10 billion in fines then VW might have less incentive to do the buyback that (it seems) like CARB and the EPA are pushing for. The cost of a buyback at FMV would be in the range of $9-$10 billion, so they might decide to just pay the fines instead. But faced with $40 billion in fines (that would likely cripple the company and call into doubt it’s ability to survive long-term) VW will have a lot more incentive to play ball.

      • 0 avatar
        Scoutdude

        Other than the one comment above I have not seen anything that indicates that CARB and EPA are pushing for a buy back. They don’t have the authority to demand that as the only acceptable solution. Only if VW can’t demonstrate a fix that meets the regulations could they possibly force a buy back.

        I do agree that this lawsuit is mainly a tool for added leverage.

      • 0 avatar
        brn

        notwhoithink nailed it, and they’re not done with GM.

    • 0 avatar
      wsn

      I see it as two folds:
      1) Intent vs negligence as you mentioned it.
      2) Damage to specific buyers vs damage to public. One can argue that GM buyers kinda deserved it because, well, GM is not well known for building high quality cars. They paid cheap and they got cheap. However, the general public do not deserve to be hurt by VW’s extra pollution. They don’t buy VW’s approach from the start.

  • avatar
    Von

    But they got such good mileage, even got the efficiency crown at TTAC.

  • avatar
    maxxcool7421

    Wow. What a blatant over the top knee jerk reaction. This is purely because the ignition BS-fine was so laughably low that they (the doj) really did NOT penalize GM in the end and the result was the DOJ looking utterly toothless.

    So now that the ‘fin’e does not directly affect the effect the US economy they are going both barrels over the top.

    Now they just look like ass clowns.

  • avatar

    40 Billion. Just one country. Wait until the other 149 countries have their way with them. VW may be a goner.

    • 0 avatar
      RobertRyan

      I will think Apple will come under special attention by the EU. No lawsuits will not apply to other countries , just fines
      The US has allowed Navistar to run non compliant, diesels, but it had to pay a fine to do do.

    • 0 avatar
      slavuta

      This is a bigger game than it seems. And probably has a lot to do with Russia. Remember 9 billion penalty to French bank (if France sells military ships to Russia).

  • avatar
    CJinSD

    I don’t see how VW doesn’t win this. Every vehicle they sold met the letter of the regulations. Look at the correction factors used for advertised EPA fuel economy numbers. Everyone involved with a three-digit IQ knows that EPA targets are ridiculous and cars are built to the tests. The silly EPA tests used to determine gas mileage were existing emissions tests. When a car that has a CAFE score of 31 has a published combined number of 24, this reflects the EPA and the automakers knowing that the test for emissions is built around. VW just did it better than anyone else.

    http://www3.epa.gov/fueleconomy/documents/420b14015.pdf

    • 0 avatar
      dal20402

      “Every vehicle they sold met the letter of the regulations.”

      No. The regulations do not say you only have to meet specified emissions levels under test conditions. The regulations specify emissions levels you have to meet all the time. VW’s products failed to do so, and the failure was massive, intentional, and fraudulent.

      Even if there were any question about whether the cars were compliant (which even VW admits there is not), the intentionally fraudulent nature of the failure would ensure that no judge at any level would give VW the benefit of the doubt.

      • 0 avatar
        CJinSD

        As I’ve shown, the EPA has a forty year track record of using tests they know aren’t representative to certify emissions compliance. A corrupt judge won’t be enough. VW will have a competent legal team, and they’ll win this during jury selection.

        • 0 avatar
          derekson

          Zero chance this ever actually goes to trial. There are way too many incentives to settle on both sides. Staking out this number is all about leverage.

        • 0 avatar
          wmba

          @CJinSD

          I’ve had a browse on the EPA site and cannot find anything about the NOx emissions being measured from fuel economy results which are just another way of stating CO2 output. And yes, we know that CAFE and earlier fuel economy test results were useless, which is why they were changed in 2008, at least what was shown on the sticker.

          There certainly are tests for measuring NOx, and the procedures are listed, but I see no link to fuel economy testing per se.

          Do you have such a link I could peruse? Thanks.

          • 0 avatar
            CJinSD

            The incredibly flattering tests that produce the number used for CAFE compliance existed before the EPA had any interest in fuel consumption. The tests were run with exhaust captured and analyzed for emissions. Fuel consumption is actually measured from emissions rather than consumption by the EPA, IIRC, but that isn’t material here. The point is they were testing for CO, NOx, and HC, and they were using the same test that they know is unrepresentative of real world conditions:

            1970
            Congress adopts the first major Clean Air Act, establishes the U.S.
            Environmental Protection Agency (EPA), and gives the new Agency broad
            responsibility for regulating motor vehicle pollution. The clean air law
            calls for 90 percent reductions in automotive emissions. New cars must
            meet a 0.41 gram per mile HC standard and a 3.4 grams per mile CO
            standard by 1975; NOx emissions must be reduced to 0.4 gram per mile by
            1976*. The law also directs EPA to set health-based “National Ambient
            Air Quality Standards” for six pollutants, all of which are present in auto
            emissions to some degree.

            http://www3.epa.gov/otaq/consumer/12-miles.pdf

            You are wrong in saying the EPA tests were changed in 2008. They were just added to, and only for the purpose of better window sticker reporting. There’s a high speed test, and an A/C test now, I believe, but they don’t matter for the purpose of this discussion. Emissions and CAFE compliance are still determined by the original two tests, as that’s where the goal posts are agreed to lie.

          • 0 avatar
            wmba

            @CJinSD

            Thanks for your input. From further reading I’ve done, they actually have bags to capture the exhaust during the FTP dynamometer test, three separate ones for the three main parts of the test. They then measure CO, HC and NOx components, and apply weighting pursuant to how much distance is traveled in each of the three parts of the test. Thus they can calculate the NOx/mile, for example, which is what we’re interested in here.

            Say they’re off by 30% on the “light” side, corresponding to the optimistic fuel economy results. This is still peanuts compared to 5 to 40 times too much NOx for VW. Plus, VW has admitted they gamed the FTP test with the software “fix”.

            I therefore do not share your feeling that the trial will not happen. The variance is too egregious, and there was admittance of guilt and gaming of the system.

          • 0 avatar
            CJinSD

            I believe the trial will happen. The proposed fine is such that VW can’t afford to settle. I just think that a good legal team for the defense will be able to weed out people from the jury that can’t understand the EPA’s history. If VW plays their cards right, they’ll get industry groups to help with their legal fees. If VW is culpable for gaming the system, what protects every car company that sold cars that can’t achieve CAFE numbers in the real world, with the elevated CO, HC, and NOx numbers correlating to the elevated fuel consumption?

          • 0 avatar
            wmba

            @CJinSD

            Can’t understand your point of view, it seems hope more than reality. There never were any penalties for not meeting EPA fuel economy on an individual vehicle and every vehicle ad I’ve seen that has fine print in it always says, “Your mileage may vary”. There have been CAFE penalties, but most manufacturers have a mixed-enough fleet to meet their goal. Not all.

            I think you’re clutching at straws. VW has admitted guilt already (gaming the system). Period. That is not in question.

            This suit by the Justice Department on behalf of the EPA is NOT a criminal case – guilt has been admitted. It is a CIVIL suit to try and get maximum money out of VW and to make a point.

          • 0 avatar
            Pch101

            It’s not unusual for federal prosecutors to pile on a bunch of charges in order to induce a plea bargain.

            That’s what is happening here, except that it is a civil rather than a criminal matter. VW can’t afford and won’t pay anything close to $40 billion, and everyone knows it.

            What this does indicate, however, is that VW is not playing nicely with Uncle Sam. Typically, an agency will haggle with automakers behind the scenes to have a “voluntary” recall that the feds can live with.

            I’m going to guess that VW has been stalling (at least as far as the feds are concerned) and this is an effort to put a fire under its backside.

            And the defeat devices are flat out illegal. No way that VW is going to worm out of that.

          • 0 avatar
            dal20402

            CJ:

            1) No industry group is going to help with this one. This is not a case of misreading of the rules, a slight miss, optimistic test scenarios, or overzealous enforcement. It’s a case of blatant, obvious fraud that resulted in colossal violations (40x!) and that everyone else in the industry will run as far away from as possible. This is not like a C-Max getting 35 mpg in the real world. It’s as if a C-Max got 1 mpg in the real world.

            2) “The history of the EPA” will not be admissible and will not come into play in jury selection. Relevant evidence will be evidence that shows whether or not VW installed a defeat device, meant to make it work the way it did, or deceived the public about the emissions levels produced by its cars.

            3) Again, obvious and deliberate fraud. This is as close to an open-and-shut case as the EPA will ever handle. They are not going to miss the opportunity for the publicity benefits of holding a fraudster to account unless the settlement is massive enough to bring the same publicity benefits.

          • 0 avatar
            CJinSD

            Here’s the reason I think nobody can sit back and let the EPA get away with this:

            1. The two tests used to determine CO, HC, and NOx are the same two tests using the same instruments and methods as the tests used to determine fuel consumption for CAFE calculations. Whether CAFE goals are met or not, the emissions measured that provide the unrealistic CAFE number of combined fuel economy is the rate of exhaust production that is also used for determining emissions of these three pollutants, which also happen to be the three pollutants that we all agree are pollutants.

            2. CAFE exhaust volumes are known by all parties to not be the same thing as real world exhaust volumes. That’s why published numbers are reduced by constants and have other test protocols averaged in. The result is that last year’s CAFE average of 31 mpg equated to a published combined fuel economy of 24 mpg. Whether it was met or fines were paid is immaterial, as that was the goal. In less than a decade, CAFE is scheduled to be 50 mpg while EPA combined published fuel economy is supposed to reach 40 mpg. Never the two shall meet.

            3. There are car companies that have gotten in trouble for not meeting their self-certified EPA numbers. The only reason they were penalized is because they couldn’t match their published numbers under the testing protocols. What the customers saw was immaterial. When Priuses couldn’t hit their astronomical numbers, Toyota was investigated. What the EPA found was that the cars produced astronomical numbers under the test protocol, but hybrids’ efficiency translated even less to real world conditions than other cars. The result was a larger correction factor for hybrids’ published numbers, not a fine for Toyota. Ford, on the other hand, got in a tiny bit of trouble for publishing EPA highway numbers for the CMAX that were based on the drag coefficient of a Fusion. They couldn’t back up their published numbers or claimed CAFE numbers on the old EPA emissions tests.

            What have I established, and what does it matter in this case? They EPA’s emissions tests used for CO, HC, and NOx don’t correlate to the real world and everyone involved knows it except maybe some of Obama’s zealots. Car companies that don’t ‘build to the tests’ have 20% higher emissions in the real world than they do on the tests. That’s what 24 mpg EPA combined v. 31 mpg CAFE is a reflection of. People that build to the tests, and that’s everyone with a high compression, DI, turbo, aggressively-upshifting automatic transmission car, are polluting even more than 20% above their tested levels.

            VW built to the test. If you stick a VW TDI on a dyno and hook up the exhaust bags, chances are you’re going to find in those bags exactly what was supposed to be there in the year it was built. Like every other car sold, it will pollute more the moment a real person drives it on a real road, but that’s the nature of standards chosen by people the public should be protected from, not regulated by.

            The reason everyone in the industry needs to get on board with VW is that the current regime knows that if they can skewer VW for cars that pollute more in the real world than on the test, then they will have the precedent to penalize every other car maker, since they all accepted the bureaucrats’ world where a bogus test is used to determine emissions. If VW can be held accountable for emissions that didn’t translate from a test that’s known to be off by at least 20%, then what is to stop the ideological monsters that gave us 54.5 MPG CAFE from leveraging everyone else’s now-excessive by at least 20% emissions to force them to buy EV technology from their buddies’ crony start-ups? Or maybe they’ll just start on the ones that don’t have UAW organized labor.

            It doesn’t matter, because this is far more than the camel’s nose in the tent. This is one of those decisions that would be so sweeping that it could cripple our economy as much as the first time the endangered species act was successfully used to stop a power plant in favor of a common and insignificant fish that had adapted itself to a tiny region. The next thing you know we’ve got third-world infrastructure and deforestation to print environmental impact studies. This is how progressives dismantle civilization.

          • 0 avatar
            RobertRyan

            CJ in SD
            EU was before this lawsuit came out, was going to do that for other manufacturers. This will degenerate into a very much unwanted Trade War. Everybody seeing everyone else, or trying to recover Taxs that have not been paid by US Tech stocks

          • 0 avatar
            Pch101

            VW installed defeat devices.

            Defeat devices are illegal.

            This isn’t complicated.

          • 0 avatar
            CJinSD

            What does skip-shift do on a manual Corvette? It operates in a narrow range and is only intended to come into play on the test. Is that a defeat device?

          • 0 avatar
            heavy handle

            “What does skip-shift do on a manual Corvette? (…) Is that a defeat device?”

            No, that is not a defeat device. Neither are upshift lights.

            Additionally, defeat devices per-se aren’t illegal, undeclared defeat devices are. They really should have picked a better name than “defeat device.”

          • 0 avatar
            Pch101

            §89.107 Defeat devices.

            (a) An engine may not be equipped with a defeat device.

            (b) For purposes of this section, “defeat device” means any device, system, or element of design which senses operation outside normal emission test conditions and reduces emission control effectiveness.

            (1) Defeat device includes any auxiliary emission control device (AECD) that reduces the effectiveness of the emission control system under conditions which may reasonably be expected to be encountered in normal operation and use unless such conditions are included in the test procedure.

            (2) Defeat device does not include such items which either operate only during engine starting or are necessary to protect the engine (or equipment in which it is installed) against damage or accident during its operation.
            ____

            It just isn’t legal.

          • 0 avatar
            CJinSD

            §89.107 (2) Defeat device does not include such items which either operate only during engine starting or are necessary to protect the engine (or equipment in which it is installed) against damage or accident during its operation.

            That’s the defense to this aspect of the case. Running the cars in EPA test mode would cause rapid failures, which is why VW can’t use it as their fix.

          • 0 avatar
            Pch101

            Defeat devices are illegal.

            VW has already admitted that it used defeat devices, which are illegal.

            Everyone has figured out that VW broke the law, except for you. Then again, you generally don’t know what you’re talking about, so this isn’t exactly a surprise.

          • 0 avatar
            heavy handle

            Pch101,

            Kindly re-read paragraph (2) that you posted. Defeat devices are illegal, unless they aren’t, in which case they are called something else. This leads to your tautological argument that “defeat devices are illegal,” since their very definition is that they are devices that have been declared illegal.

            VW and all other manufacturers use devices (which are really software routines) during cold starts, wide-open throttle, high torque requests, detonation, high engine temps, etc.

            The problem with VW’s devices is that they were not declared, and that their use was the rule and not the exception.

    • 0 avatar
      RobertRyan

      Agreed.
      EPA allowed Navistar to sell non compliant diesels as long as they paid a small penalty to do so. Real hypocrisy displayed in the VW case

      • 0 avatar
        bball40dtw

        The EPA is taking Navistar to pound town. Right now, the EPA is suing Navistar for basically $39,000 per 2010 engine that didn’t meet those standards. Navistar sold about 7750 engines that didn’t meet requirements for a $300 million penalty. That’s after spending $700 million on an emission system that is trash. Maybe VW would like to pay $39,000 per non-compliant TDI vehicle? They had 500,000 vehicles that didn’t comply. I’m sure the EPA/DoJ would take a $19.5 billion payment from VW.

        • 0 avatar
          RobertRyan

          Although they allowed them to keep selling non compliant engines, so who is at fault?

          • 0 avatar
            bball40dtw

            The engines that are part of the lawsuit are ones that Navistar sold in 2010 that they say should qualify for 2009 regs. Not the engines that Navistar was allowed to sell in 2011. If you disclose an issue to the EPA, and work with them, you get fines, but they won’t kill you. If you lie to them, they’ll step on your neck.

          • 0 avatar
            wmba

            @RR

            Here’s google’s cached version of why EPA allowed Navistar to sell non-compliant engines, and all the competitors who belly-ached about it.

            http://webcache.googleusercontent.com/search?q=cache:FpNwnyqjjZkJ:http://nepis.epa.gov/Exe/ZyPURL.cgi?Dockey%3DP100GPF7.TXT%2Bdid+epa+allow+navistar+to+keep+on+selling+non-compliant+engines&gbv=1&hl=en&&ct=clnk

            Here’s the part that matters:

            “Congress adopted section 206(g) in the Clean Air Act Amendments of 1977 as a response to a concern with requiring technology-forcing emissions standards for heavy-duty engines. The concern was if strict technology-forcing standards were promulgated, then some manufacturers might be unable to comply initially and would be forced out of the marketplace. NCPs were intended to remedy this concern. With this provision, the nonconforming manufacturers would have a temporary alternative that would permit them to sell their engines or vehicles by payment of a penalty. At the same time, conforming manufacturers would not suffer a competitive disadvantage compared to nonconforming manufacturers, because the amount of the NCPs would be determined, in part, based on the money saved by the nonconforming manufacturer.”

            So collecting NCPs was entirely legal under the existing legislation. You just need to look a bit harder as usual.

      • 0 avatar
        DenverMike

        While technically compliant for the rules at the time, Navistar engines/emissions gamed EPA test cycles without a blatant/illegal cheat device. When caught Navistar wasn’t arrogant then defiant on top of it.

        • 0 avatar
          RobertRyan

          Sort of splitting hairs. They allowed them too keep trading
          “Congress adopted section 206(g) in the Clean Air Act Amendments of 1977 as a response to a concern with requiring technology-forcing emissions standards for heavy-duty engines. The concern was if strict technology-forcing standards were promulgated, then some manufacturers might be unable to comply initially and would be forced out of the marketplace. NCPs were intended to remedy this concern. With this provision, the nonconforming manufacturers would have a temporary alternative that would permit them to sell their engines or vehicles by payment of a penalty”

          Strangely, the punitive fine by the EPA, will force VW out of the marketplace. EPA had a very different reaction to GM’s ignition saga , that caused death to and injury to approx 170 people, only a fairly modest penalty, that guilt still lay with the “new” GM.
          VW, has not be responsible or has no allegations, of Death or Injuries caused by its actions

          • 0 avatar
            DenverMike

            “EPA had a very different reaction to GM’s ignition saga..”

            The Sierra Club yawned too! Maybe you should look into what exactly the “EPA” acronym stands for.

            And a “trade war” is completely far fetched too. US OEMs barely care about the EU market anyway, while BMW, Mercedes, Audi, and Porsche would the walking dead without the US. And there’s already a tariff imbalance. 10% duty to enter/sell in the EU while only 2.5% to enter/sell cars in the US.

          • 0 avatar
            RobertRyan

            You have absolutely no clue, about Europe, Japan or anything else

    • 0 avatar
      Pch101

      “Every vehicle they sold met the letter of the regulations”

      Defeat devices are illegal — their illegality is in the Code of Federal Regulations.

      FWIW, you are competing strongly with the Aussie duo for having the greatest track record of inaccuracy around here. All of you are tough competitors in the Perpetually Wrong award category.

    • 0 avatar
      NickS

      @CJinSD
      “Every vehicle they sold met the letter of the regulations.”

      This is factually wrong. Non-disclosure of AECDs is a clear violation of the CAA. That is the law on the books.

      “Everyone involved with a three-digit IQ knows that EPA targets are ridiculous and cars are built to the tests. ”

      Everyone will find laws ridiculous at one time or another, but that doesn’t mean they get no risk exposure when they break them. What you seem to be claiming is that if someone gets caught cheating on a test, that is okay, so long as they consider the test ridiculous.

      Would you be comfortable flying on a plane, or seeing a doctor who cheated on their certification tests?

      In any event, it seems you are making a political argument against the feds, regulation, environmentalists, or whatever … but this gets old fast.

      I seriously doubt there is anyone at VW who thinks they can win a court case on this, much less at the jury selection phase.

  • avatar
    kit4

    Reuters said it could be up to $90 billion.

    • 0 avatar
      RobertRyan

      Either way, this could be disastrous. Ford, GM , Tech Companies could face massive retaliation. As far as I know Ford is another non payer of Tax, outside the US

      • 0 avatar
        derekson

        It’s possible that http://www.macrumors.com/2016/01/01/iphone-ipad-germany-copyright-levies/ is already the first return fire in this exchange. But I could be wrong about that, I really have no idea. But it is an interesting coincidence of timing at least…

        • 0 avatar
          RobertRyan

          Profit shifting, or cheating has become a huge feature of large corporations. Apple is the worst and actually owes a staggering amount of Tax. This whole VW episode , could trigger a massive crackdown in the EU followed by a Global crackdown. When you have Corporations paying zero tax in many countries, because legal tax dodging has allowed them to do so, then laws as will be changed and I suspect retrospective in thir effect

          • 0 avatar
            Hummer

            Just a thought, if a company can legally find a tax loophole, then wouldn’t any reasonable human being, in the same position, be inclined to do the same?

          • 0 avatar
            RobertRyan

            In theory, yes but a bit rich when many Companies with turnovers in the Billions pay very little or no tax.Gets richer when a lot of the largest Corporations on the Globe start to do the same

          • 0 avatar
            Hummer

            There’s nothing inherently wrong with being a billionaire as you are alluding to. But so long as a company can take advantage of a tax break, they will, any company in the same position will do the same.
            Many of these tax breaks exist either because you elect the same people you deride, or because your tax structure without loopholes is too dependent on a fantasy company that has doesn’t require research and development to sustain business and grow.

            You notice how we don’t see calls for higher taxes on those bringing home $100m a year, just on the middle class bringing home $100k-$1M a year.

  • avatar
    slavuta

    Uncle Sam is drunk, edited to money. Make these people earn the money. Send them to coal mines.

  • avatar
    zip89105

    Total money grab. VW would be better off not selling VW’s in the USA.

    Did their ignition switches kill anyone?
    Did their airbags kill anyone?
    Did their accelerators stick and kill anyone?

    • 0 avatar
      RobertRyan

      Probably, they were going great guns outside NA

    • 0 avatar
      Frylock350

      @zip89105,

      The issue here is intent. VW isn’t in hot water because of the results of their actions they’re in hot water because of the actions themselves. VW is guilty of fraud. GM didn’t purposely design defective switches that couldn’t handle a teenage girls 55lb keyring. Toyota didn’t purposely design defective pedals for folks that don’t know what neutral is for. Incompetence or poor QA is not a crime. Intentionally flouting regulation is. American culture always forgives mistakes, but we don’t like it when you don’t play fair. GM and Toyota made mistakes, VW didn’t play fair. Jury’s still out on takata.

  • avatar
    SCE to AUX

    I’m amazed (sort of) at the efforts here to apply moral equivalency to the VW diesel scandal vs GM’s ignitions, Navistar, Toyota, etc, and to blame the regulators and politicians for what’s happening.

    VW cannot be let off the hook for this. As WhiskeyRiver said above, this is just the beginning of a worldwide response.

    VW will have a tough time surviving, and if they do, they will be a much-diminished company as a result, with poor brand equity. Dissolution may not happen for five years or so, but it is possible.

    • 0 avatar
      RobertRyan

      No, sales have actually gone up outside NA. I guess any publicity is better than none.

    • 0 avatar
      thx_zetec

      I don’t want to let them off the hook but why 40billion? Did dr evil make this fine? I want vw around in future who else will make inexpensive German cars?

      they cheated on NOX so they could make much less CO2 they were trying to fight global warming. I say 2 billion fine, paid with 100,000 manual tranny sportwagens. Seriously why do we have to destroy vw out of spite?

  • avatar
    NickS

    I know a few others made that point, but I’ll repeat it as well — this complaint is clearly a negotiating tactic on EPAs part to pile on VW in order to compel them to agree to a fix that will actually work (it will be expensive for VW no doubt, but presumably not $40B+). This implies that probably VW has been adamantly refusing to fit urea systems to the gen 1 vehicles (or a buy-back), and is hoping to buy time. This is an epic f-up for VW, or, perhaps a shrewd calculation on their part that the EPA won’t pursue the case legally and will somehow blink and settle for the half-baked “solution” that VW has suggested.

    I cannot stress enough how dead-wrong this approach is. The EPA’s currency of choice is fear and respect from the regulated, not shareholder dividends. If there is one thing regulators will not give away easily that would be a public perception that they are weak or ineffective. The EPA is routinely criticized for being too meddlesome to businesses and having its budget curtailed, and criticized again for not uncovering violations early enough. For their critics there is nothing they could ever do right, even when they use their scant resources to do something right. Does anyone really think they’ll just roll over and lock in a reputation of letting the most publicized violation of the CAA become an indisputable fact? They don’t have the staffing they need to verify compliance internally so we fund this theater of self-certification that relies on lawyers in the enforcement division. If they don’t act when that self-cert mechanism fails, there is not much left of the regulator. That is the kiss of death for any regulator, especially in the current climate where ideological opposition to them is a clear and present danger.

    Essentially, the choice for VW hits it where it matters: affect shareholder value now by assuming the cost of fixes/buyback, or assume huge legal risk with potentially severe financial penalties and uncertainty for years to come?

  • avatar

    It is that simple – if they fully fine GM then US taxpayers have to bailout GM. So as a taxpayer I am with Government on GM. But in case of VW they can charge any amount they wish. 40 billion, 100 billions -who cares – European taxpayers (which means Germans since only they in Europe have money) have to bailout VW. Therefore I do not care about VW, honestly. And additional benefit is less competition for US companies globally.

    • 0 avatar
      derekson

      if you don’t think the European Union having to bail out VW would have negative effects on the US economy then you are a fool.

      • 0 avatar
        Hummer

        Suddenly remembering the amount of money the US sends to Europe and it’s phony-banana establishments, I partially retract my first reply.

      • 0 avatar

        “if you don’t think the European Union having to bail out VW would have negative effects on the US economy then you are a fool.”

        Who cares about Europe. Asian countries are the most important US trade partners and that’s where future is. Europe became a Disneyland. I hope they realize sooner than later that US is not going to fight for them or sell them petroleum and gas for cheap and they better become friends with Russia and Iran.

        • 0 avatar
          RobertRyan

          No, the European Union, is a major player, that does affect the US. Asia especially China has enormous clout in the US, financially. VW is one of the top manufacturers in China.

    • 0 avatar
      Hummer

      In a very morally unpleasant way I suppose that is one way to look at it, whether or not that’s right for me to see it in such a globalist way is definately questionable.

    • 0 avatar
      wmba

      Since this is a civil suit, the penalties assessed against VW, if the suit is successful, are not just straight EPA administrative fines. They are court rulings on the fines payable, which shows that the Feds are being careful to make it seem like it’s not just the US government fining a foreign company out of spite. Clever approach, if you ask me.

      • 0 avatar
        jpolicke

        VW will never pay $40 billion. This is a bargaining ploy by EPA to induce VW’s cooperation. We’ve seen this approach on Law & Order all the time: “Plead guilty and we take the death penalty off the table.”

        • 0 avatar
          wmba

          You have completely missed the point.

          This particular case is a civil lawsuit, not criminal, and no pleas are required. It is also not a bargaining ploy. The judge and or jury will decide the penalties, since VW has already admitted it used cheater software. The result will appear as a Consent Decree.

          http://www.epa.gov/enforcement/enforcement-basic-information

          and more to the point for this case:

          http://mobile.reuters.com/article/idUSKBN0UI1QP20160105

  • avatar
    johnny_5.0

    The deciding factor in my GTI purchase was that I picked one up cheaply enough that I could flip it at any point if I didn’t like it. That logic was based on post fiasco unraveling used values. The wildcard is obviously the potential resale impact of all the pending litigation. EPA/DoJ, buyer class action, dealer lawsuits, whatever Uzbekistan wants to sue them for. It will be interesting to see if further damage to the brand or large scale discounting to move inventory suppresses the value of used GTIs. After shopping for a Golf R I’m convinced that Matthias Müller could punch baby seals on live TV and dealers would still demand MSRP for those.

  • avatar
    50merc

    The goal is to get noncompliant VW diesels off the road. They should be retrofitted with Pinto fuel tanks, Chevy Citation brakes, Camry accelerator pedals, GM ignition switches, Takata airbags and Firestone 500 tires. It’s all for the greater good.

  • avatar
    thx_zetec

    why 40 billion vs 2 bilion? 2,000,000,000 hardly a slap on the wrist. don’t they get credit for beating CO2 limits?)

  • avatar
    jthorner

    It continues to amaze me how many people are doing mental back-flips to try and make VW the victim here. VW cheated, lied and covered up on an epic scale. They continue to try and obfuscate the problem, and apparently in Germany they have enough “juice” to get regulators to go along with a vintage JC Whitney catalog class “air straightener” fix.

    In today’s news, it continues to come out that CARB and the EPA are not biting on VW’s proposed “fixes”. It is very important to note that even 2016 model year VW’s with urea injection were using a defeat device to meet the emissions specs.

    IMO: VW is going to have to buy all of the grossly defective and criminally produced vehicles back, but their pride will not let them admit this simple fact.

    • 0 avatar
      RobertRyan

      To save money, they could close down the Chattanooga plant and relocate to Mexico, much cheaper solution

      • 0 avatar
        Jasper2

        Will we be paying German prices for Mexican assembled cars?
        Will the models be re-badged and called “Adobe X” instead of Passat?
        I have always hoped for a Mexican engineered/built car.
        Why would U.S. citizens support Mexican labor instead of U.S. workers?
        VOLVO has had the good sense like BMW, Toyota and Hyundai of building plants in the U.S.

        • 0 avatar
          RobertRyan

          They already buy Mexican built Ford and Chrysler products. Prices the same, Mexico is part of NAFTA
          Volvo, BMW and Toyota have plants scattered across the Globe

  • avatar
    Jasper2

    Forget any fines for VW.
    Instead, just throw a dozen VW execs into jail either here or in Deutschland for a year or so. Start with Martin W., and work down.
    Be sure they are kept busy making German license plates.


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