The Volkswagen diesel emissions saga has reached a logical legal conclusion. The automaker entered a guilty plea in a Detroit federal courtroom this morning, admitting to a vast, 10-year conspiracy to fool environmental regulators through the use of emissions-cheating defeat devices.
As penance, Volkswagen AG must now pay $4.3 billion in criminal fines and civil penalties. That sum can now be added to the multi-billion U.S. buyback of hundreds of thousands of 2.0- and 3.0-liter diesel vehicles manufactured since 2009. While the penalties would be a bitter pill for any automaker to swallow, it’s a fraction of the fine allowed under federal guidelines.
Had the court pursued it, it might have sparked a brand fire sale down at Volkswagen Group. (Read More…)
The Office of the Inspector General is preparing to conduct preliminary research to determine whether the Environmental Protection Agency’s internal controls are effective at detecting and preventing emissions fraud.
While the EPA has proven itself capable of stopping cheaters in the past, the federal oversight group wants to check in on the National Vehicle and Fuel Emissions Laboratory in Ann Arbor, Michigan and the Office of Transportation and Air Quality in Washington D.C.
This investigation comes amid the current administration’s proposal of a 25 percent reduction in the EPA’s $8 billion budget, the elimination of almost 3,000 jobs, and the suspension of agency-backed programs and departments — including the environmental justice office. Automakers are also begging President Trump to rollback emissions standards after 2016 ended up being the first year since 2004 that U.S. light vehicles did not exceeded the industry-wide fuel economy targets. Regardless of intent, any appraisal of the EPA’s ability to act effectively will either serve to validate its existence or help rationalize its dismantlement. (Read More…)
The fallout from the Environmental Protection Agency’s call-out of Fiat Chrysler Automobiles over excess EcoDiesel emissions has now landed in the company’s lap. Or, more specifically, in its mailbox.
In a filing to the Securities and Exchange Commission, FCA revealed it’s been hit with subpoenas from state and federal authorities, including the SEC, Reuters reports.
The need for answers comes after the EPA accused the automaker of failing to declare eight auxiliary emissions control devices installed on its 3.0-liter diesel V6, which the regulator claims emits illegally high levels of emissions. That engine found a home in roughly 104,000 Ram 1500s and Jeep Grand Cherokees.
Every automotive manufacturer currently selling cars within the United States has incessantly requested that the government dial back federal fuel economy standards ever since Donald Trump took office. Now, two advocacy groups — Consumers Union and the Consumer Federation of America — have sent a letter to Trump making a case to maintain Corporate Average Fuel Economy (CAFE) standards for the good of average Americans.
Automakers have claimed that higher efficiency targets will increase vehicle cost, making this a battle between two camps, each focused on U.S. wallets: MSRP and MPG. (Read More…)
Politicians from Volkswagen’s home region of Lower Saxony are raising questions over the unanticipated departure of the German automaker’s compliance chief, Christine Hohmann-Dennhardt, saying they have concerns over how the supervisory board handled the matter. There has been a long-standing apprehension among investors and business analysts that VW is too tightly controlled by its founding Porsche-Piech family and incapable of amelioration.
On Wednesday, Deutsche lawmakers called for a formal inquiry on the matter.
Hohmann-Dennhardt was brought aboard very late in 2015 to assist in Volkswagen’s reformation following the diesel emissions cheating scandal. However last month, after only a year on the job, she left abruptly with a sizable pension and gargantuan severance. (Read More…)
Volkswagen AG has announced a new U.S. unit that will manage its hefty court-mandated investments in zero-emission vehicle infrastructure and green awareness programs.
Electrify America LLC, located in Reston, Virginia, is supposed to be entirely separate from Volkswagen Group’s automotive brands and owned as a subsidiary of VW of America. It will oversee $2 billion in initiatives to promote the use of zero emissions vehicles in the U.S. over the next ten years as part of VW’s diesel emissions settlement. (Read More…)
Contrary to the popular mantra, there is a replacement for displacement. The problem is tiny engines that harness technology to boost power output aren’t the greenest things on the road. In fact, the emissions created by small two, three and four-cylinder engines are often out of all proportion to the mills’ Lilliputian displacement.
Volkswagen, realizing it’s staring down the barrel of regulatory non-compliance, has vowed to stop searching for the latest gas- and diesel-powered micro-wonder. Small is out. Normal-sized is in. (Read More…)
President-elect Donald Trump’s pick to head the Environmental Protection Agency, Oklahoma Attorney General Scott Pruitt, said he plans to review the Obama administration’s recent decision to secure fuel efficiency standards through 2025.
Last week, outgoing EPA administrator Gina McCarthy bumped up the timeline for the final determination on the fuel efficiency rule in the hopes of maintaining the Obama administration’s climate legacy.
“It merits review and I would review that,” Pruitt said at yesterday’s Senate confirmation hearing. Later that same day, Pruitt confirmed that he would not permit California to continue operating under its own rules as part of its 2009 advanced clean cars program and zero emission vehicle mandates.
As predicted, California isn’t interested in being told what to do. (Read More…)
It would be fair to suggest that government agencies have held the automotive industry by the testicles with both hands for much of the Obama administration. America’s fuel economy and emissions targets are noble, but have cost manufacturers peace of mind and plenty of money. Enter President-elect Donald Trump, who spent a great deal of his campaign promising to repeal some of those standards and change things for the industry.
Are the current targets too lofty? Most automakers would say yes, but it depends on who you’re asking. However, the odds of Trump rolling back efficiency standards in a meaningful way is on par with us returning to the Bronze Age. While not impossible, it’s incredibly difficult to turn back the tide of progress. Even if the 45th President of the United States did manage to dismantle the EPA, abolish Corporate Average Fuel Economy (CAFE) regulations, and convince China to nuke us into the Stone Age, there remains the outside world to consider. (Read More…)
Fiat Chrysler Automobiles started off the week in solid form. It deftly preempted the Detroit auto show by unveiling its futuristic Portal minivan concept at the youthful Consumer Electronics Show a week prior, then dangled a big Mopar tease in front of enthusiasts with its yet-to-be-revealed SRT Hellcat Demon variants of the Dodge Charger and Challenger.
Then, just like that, the Environmental Protection Agency held a media conference and FCA found its legs kicked out from under it. After Thursday’s accusation of emissions violations (via eight undeclared emissions control devices found on 3.0-liter EcoDiesel models), the automaker finds itself playing defense as controversy grows.
As the EPA’s investigation continues, the U.S. Department of Justice has now opened a criminal probe. (Read More…)
Environmental Protection Agency administrator Gina McCarthy has decided to maintain current emissions and fuel economy standards through 2025, cementing a central pillar of the Obama administration’s green legacy.
Many automakers have been critical of Obama’s rather strict climate policies and were hopeful that President-elect Donald Trump might roll back some of the more stringent regulations. Of the policies, none is more controversial than the corporate average fuel economy (CAFE) mandate, which began a midterm review earlier this year.
While the EPA’s ultimate determination wasn’t due until April of 2018, choosing not to alter 2025 vehicle emission and CAFE rules effectively locks in the standard before Trump can take office. (Read More…)
Well known as a leading voice in the fight against climate change and a host of other progressive issues, New York Attorney General Eric Schneiderman now has Fiat Chrysler Automobiles in his sights.
After yesterday’s bombshell announcement from the Environmental Protection Agency, in which the regulator accused FCA of violating federal laws with its 3.0-liter diesel Jeep and Ram models, Scheiderman revealed that his office will investigate the automaker.
A noted environmental attack dog, Schneiderman isn’t the guy you want on your tail. (Read More…)
The Environmental Protection Agency calls the emissions control devices found on diesel Jeep and Ram vehicles a “clear and serious violation of the Clean Air Act” — something the CEO of Fiat Chrysler Automobiles isn’t very happy about.
In their morning announcement, EPA officials claimed the automaker hasn’t done anything to prove the devices found on 2014-2016 EcoDiesel models aren’t regulator-tricking “defeat devices.” According to Brent Snavely of the Detroit Free Press, Sergio Marchionne is mighty steamed, calling the insinuation of cheating “unadulterated hogwash.”
So, what are these eight auxiliary devices, and what penalty could the automaker face if found in violation of the law? (Read More…)
A Volkswagen executive who allegedly spent more than a year throwing up smoke screens around the emissions-cheating automaker has been arrested in sunny Florida.
Oliver Schmidt, a former top emissions compliance manager assigned to the U.S., ran defense for the company in the long run-up to the diesel revelations. As allegations mounted and regulators began asking questions, Schmidt and other company officials blamed phony technical problems for the sky-high emissions levels seen during real-world testing.
According to the New York Times, Schmidt, a German national, was nabbed on Saturday and charged by the FBI with conspiracy to defraud the U.S. (Read More…)
Volkswagen’s chief executive officer, Matthias Müller, will be taking a pass on the North American International Auto Show this year. VW still needs to settle things with the U.S. Department of Justice, and is desperate to reach a criminal settlement before the Obama administration is replaced by Trump.
Of course, there is also the matter of public embarrassment. At the 2016 NAIAS Müller took some serious heat for telling National Public Radio that Volkswagen did not lie when initially questioned about its emission-cheating diesel vehicles. The CEO may indeed be busy overseeing the criminal settlement with the DOJ, but there has to be a little leftover humiliation from last year’s awkwardness. (Read More…)