By on January 12, 2016

Volkswagen Wolfsburg

The California Air Resources Board and the U.S. Environmental Protection Agency rejected Tuesday Volkswagen’s proposed fix for its illegally polluting 2-liter diesel engines and said the automaker’s plan lacked enough detail and information.

“Volkswagen made a decision to cheat on emissions tests and then tried to cover it up,” said CARB Chair Mary D. Nichols. “They continued and compounded the lie and when they were caught they tried to deny it. The result is thousands of tons of nitrogen oxide that have harmed the health of Californians. They need to make it right. Today’s action is a step in the direction of assuring that will happen.”

According to a letter sent to Volkswagen, the automaker’s plans were “incomplete, substantially deficient, and fall far short of meeting the legal requirements.”

The rejection letter was accompanied by a new notice of non-compliance for the automaker’s diesel vehicles. It’s unclear from the notice whether Volkswagen faces additional penalties for submitting a rejected proposal.

In a statement, Volkswagen said it was meeting with CARB and EPA regulators to discuss a potential fix, and that the rejection applied to a plan that it sent in December.

The rejection is the latest chapter of an ongoing saga between the automaker and regulators to fix nearly 500,000 cheating cars. Last month, the EPA filed a lawsuit against the automaker, seeking billions in damages, and said officials at Volkswagen were withholding information vital to fix their cars.

In an interview with NPR, Volkswagen chief Matthias Müller said the automaker didn’t intentionally cheat, but rather that the company misunderstood the law.

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70 Comments on “CARB, EPA Reject Volkswagen’s Fix for 2-liter Diesels...”


  • avatar
    haroldingpatrick

    Ruh row raggy.

    • 0 avatar
      Pig_Iron

      +1

      I think they’d better get a plug-in hybrid variant of every diesel model they sell, and they’d better do it by yesterday.

      I used to be a Diesel Punk second only to Fred Voglmaier, but now I don’t see how they can pull it out of the inferno.

  • avatar
    Dr. Doctor

    Odds are that CARB won’t be satisfied unless VW does a buyback and lines their pockets with a substantial amount of money.

  • avatar
    SCE to AUX

    Mr Müller should never have spoken to NPR.

    He’s saying that instead of being unethical, VW is just stupid. In reality, they’re both.

    They won’t survive this.

  • avatar
    jpolicke

    Muller is doing an amazing job digging a deeper hole with his tongue. Some of his greatest hits:

    “it was an ethical problem? I cannot understand why you say that.”
    “We didn’t lie. We didn’t understand the question first.”
    And because of all their non-lying, “we have installed new board member for integrity”

    The only thing that offends people more than being lied to is having their intelligence blatantly insulted. If Muller thinks he’s doing damage control VW would have been better off keeping Winterkorn.

  • avatar
    CJinSD

    CARB and EPA are made up of such horrible people that I almost feel sorry for VW.

    • 0 avatar
      SCE to AUX

      Yes, but sometimes the blind squirrel finds the nut. They are right, this time.

    • 0 avatar
      highdesertcat

      ” I almost feel sorry for VW.”

      Hell, I don’t. VW is a Big Dog in the auto industry. Maybe not in the US, but a Big Dog everywhere else on the planet.

      Remember that old saying, “If you wanna run with the Big Dogs….. else stay on the porch.”

      VW chose to gamble.

      They chose badly.

      This, too, shall pass, as long as VW lines the pockets of the CARB and the EPA with a lot of cash money. And they will.

      • 0 avatar
        heavy handle

        Do you have proof that there is bribery going on? That’s a serious accusation. Government officials would get very long jail time if they were shown to accept bribes.

        Maybe I misunderstood you, and you are confounded by the idea that a “corporate citizen” would pay a fine for breaking the law. Perhaps a strongly worded letter would be better?

        • 0 avatar
          highdesertcat

          Hh, no bribery of individuals, but huge fines assessed by the CARB and EPA will make all this go away.

          VW took a calculated risk. They lost. They’ll pay.

          Then it’s right back to selling VW cars in the US.

          Maybe the UAW will see an opportunity here to exploit this situation. If only those VW employees in the US had been members of the UAW………..

          • 0 avatar
            heavy handle

            So it’s a fine just like a speeding ticket, but on a much larger scale.

            No need to call it “lining the pockets of the CARB and the EPA,” that’s overly dramatic. VW agreed to the rules, which are the same rules their competitors play by. Level playing field, and all that.

            They broke the rules, got caught, and now they will have to make amends. Any monies collected will go to general revenue, which means that every US tax payer benefits.

            The side issue is that you may not agree with any government revenue/spending as a general rule. That has nothing to do with this issue. It’s a democratic system, so there is a process for making changes.

          • 0 avatar
            highdesertcat

            hh, “The side issue is that you may not agree with any government revenue/spending as a general rule.”

            That’s not true. I fully endorsed government revenue and spending during Clinton and Reagan, JFK and Nixon. In fact, I supported it.

            I wouldn’t call the American system a democratic system since we’re a Republic and the agenda is set by the political party that happens to be in power at any given time.

            VW got bagged, true, and so did Hyundai/Kia for making false mpg claims, neither issue which killed people.

            But what I would find a lot more interesting is that no one challenges the domestic car makers on how and where they break the rules everyone has agreed to.

            To me it seems like that “level playing field” is skewed to the benefit of the domestic car makers while the foreign car makers have to slog uphill.

            I like NAFTA and I like TPP. I think they do more good for more Americans than they do harm.

            This VW thing is just way overblown because VW is just not a player in America. Best thing to do for VW is to pull out of the US, and make them elsewhere for other markets.

            They did that once before.

    • 0 avatar

      You know every once in a while I feel bad for VW (mostly the innocent employees) Then they do something even dumber (see every interview they did this week) and then I’m OK with the company dying a slow horrible death.

  • avatar
    APaGttH

    Some good popcorn comments already.

    Yup, that CARB and EPA, amazing the power they are wielding in Europe over all of this.

    VW is running a textbook case of how not to manage a crisis. Herr Muller would have likely caused less damage doing those interviews and telling everyone GFY.

    Bad things happen when basic environmental laws aren’t followed. Ask the population of China on how they feel about clean air. Or the population of Flint, Michigan on how they feel about clean water.

    I remember the pervasive brown clouds of just 30 years ago, that aren’t very common anymore, and how we haven’t heard of the Cuyahoga River bursting into flames in the last 40 or so years.

    Consider me a liberal loon, but I like to breath clean air and drink water that doesn’t stunt my brain and turn me into a violent idiot.

    • 0 avatar
      TonyJZX

      You mean a republican? Hahaha I kid. Or maybe not.

      It seems many states dont particularly care about clean air and water or carcinogens. Problem is the place is so corporatist.

      I dont like CARB EPA or the state of California but sometimes you need a rabid dog to kill another rabid dog. To wit, meet VAG.

    • 0 avatar
      CJinSD

      Can you process that the brown clouds went away with emissions controls that were far simpler and with far more permissive standards than we have today? Now it is about a bureaucracy that validates itself by lowering permissible emissions and creating new metrics. It has nothing to do with cleaning the air.

      • 0 avatar
        Pch101

        Your MO is to whine, no matter what. You would have argued in favor of the brown clouds and against even the most basic of controls if that was the current status quo.

        • 0 avatar
          CJinSD

          When air pollution was a real problem, I was in favor of finding a solution. Your MO is that of a broken clock. This isn’t one of the two times you’re right.

          • 0 avatar
            Pch101

            I seriously doubt that you devoted your childhood years to supporting catalytic converters. But your penchant for whining was presumably already well established at that point — unlike most kids, you never grew out of the “terrible twos”.

          • 0 avatar
            CJinSD

            Worthwhile people identify problems, find solutions, and then move on. Liberals prolong problems to justify their continued parasitic relationship with the populace.

          • 0 avatar
            Pch101

            Are you this much of a whiner in real life?

  • avatar
    PeriSoft

    “Müller said the automaker didn’t intentionally cheat, but rather that the company misunderstood the law.”

    Mistakes were made. The tire pressures were wrong.

  • avatar
    mor2bz

    WTF? I thought they already fessed up and now this.

    They misunderstood the law? Maybe they will come to some understanding of it now.

    Cheating, lying: what’s the difference.

  • avatar
    28-Cars-Later

    “According to a letter sent to Volkswagen, the automaker’s plans were “incomplete, substantially deficient, and fall far short of meeting the legal requirements.””

    Words which also describe most US politicians.

  • avatar
    Von

    Another example of just how badly the company runs. I’ve been middle management in a company 1/10 the size of VW, and the top 500ish people got communications training on how to handle a crisis. When there was an eventual crisis, people got a good long memo from the CEO basically telling you what you should and should not say, the next working day.

    I just bust up laughing thinking about the reaction of the chief spinster after seeing his boss’s interview with NPR. The whole we misunderstood the law was a terrible attempt at a save, too.

    How many months has it been a crisis now? Get your crap together.

  • avatar
    jthorner

    “Volkswagen chief Matthias Müller said the automaker didn’t intentionally cheat, but rather that the company misunderstood the law.”

    VW is completely incapable of perceiving reality. Misunderstood? 100% German BS.

    VW sells about 10 million cars per year world wide. The half million cheating US market vehicles are thus about 5% of one year’s production volume. It they want to deal decisively with this mess, buy them back at full original value and be done with it. We are only talking about 5% of one year’s sales. Write it off, clean up the mess, and move on.

    • 0 avatar
      Scoutdude

      Except they did similar cheats in other jurisdictions that have even semi-strict emissions laws. So they didn’t just misunderstand the US laws they misunderstood the laws in many countries. Yes somehow they seemed to understand the laws when they were doing their gas engines in those some countries.

  • avatar
    gasser

    VW will not survive this crisis in its present state. Billions in fines, billions in repairs or buy backs, billions in legal fees. Falling credit ratings . They will have to sell off part of VW to survive. They have squandered millions in redesign of a new Passat that looks just like the previous one. They have NO competitive SUV/CUV for the US.

    • 0 avatar
      RobertRyan

      US, is a bit of an also ran for VW the Corporation, main interests are outside NA

      • 0 avatar
        carguy67

        Perhaps. But it was only a few years ago VW was bragging about how they were going to massively grow the US market (DeLorenzo went ballistic on them on that one). For some reason, this reminds me of Hitler thinking an invasion of Russia was going to be a cakewalk.

  • avatar
    Tstag

    I’m surprised VW shareholders are so relaxed. This could well bankrupt the company. Options are to sell brands or chapter 11 the US business (if they can) but both options are bad. Selling the Truck business would help but Bentley, Bugatti and co probably would go for much. They could sell Audi but whoever buys this needs to be confident of how much they will lose in the diesel scandal.

    If they chapter 11 then they will be locked out of the US unless they can buy their way back in. Not good!

  • avatar
    Storz

    Really curious to see where this goes.

  • avatar
    NickS

    Muller has got to go. Minimal ability to carry out proper PR in a crisis. Epic fail when you have a PR problem in a country like the US. Even more so when you’ve managed to piss off the owners, dealers, regulators and politicians. If someone can make it worse for VW, Muller and his team are it.

    Problem is VW has this messed up culture at the very top, their supervisory board and this weird ownership structure. In a normal publicly traded company, the big shareholders would redo the board if you keep f-ing it all up. Will lower Saxony or the union force some humble pie and the courage to quickly expedite a solution to move past this? At this point, they should be coming to terms with reality: its getting more and more expensive with each fail. The more time they spend in this, the more opportunities they will have to repeat these fails. If they don’t like the sound of $10 billion today, is $15, $20, or $30 down the road somehow better?

    A normal company would put a stellar CEO at the top,certainly someone who can handle the public spotlight. It matters very little how many years the CEO has been with the co. or what their nationality is. But here this is all backwards. Muller knows VW inside out, and is German, neither if which was in short supply at VW. What is his track record with handling regulatory matters, the press, corporate restructurings, culture change, or crises?

    The only support VW is getting comes from two constituencies: Germans, and anyone who has it out for the EPA no matter the issue.

  • avatar
    heavy handle

    Reading between the lines, VW had a 45-day deadline to meet, so they submitted an incomplete plan.

    People who’ve never worked in any industry seem to think that 45 days is enough to formulate a complete plan to retrofit half a million cars with yet-to-be-designed, unproven components. Sure.

    • 0 avatar
      NickS

      That’s assuming that VW found out they were cheating only 45 days ago. If you believe that, I would agree with what you say and even offer that 6 months is barely enough time to find a fix and plan it out.

      Let’s say they didn’t know when they started shipping these cars (the few rogue engineers theory). They got a copy of the ICCT findings back in 2013 IIRC. So, someone at VW must have known then. They also got inquiries from CARB and did a recall to “fix” the problem but it turns out they just tweaked the cheating mode. So, surely someone must have known then. Then a year went by with more and more pointed inquiries from CARB and EPA about inconsistencies and push-back (or dissembling) from VW. Then they admitted they were cheating (Feb 2015?). It seems to me it they’ve had way more than 45 days warning they’d need to fix this.

      Hubris has kept VW in denial for a long time.

      • 0 avatar
        heavy handle

        Even though they knew they were cheating, it takes more than 45 days to design, build, test, and implement a fix. Just the manufacturing lead times are way more than 45 days, and that’s only a small piece of the puzzle.

        • 0 avatar
          NickS

          Yes, I agree. For the small piece of the puzzle, noone would hold them to an unrealistic deadline.

          My point was about the larger issue of motivation to solve the puzzle. They didn’t think they should fix this properly all the other times they got a shot across their bow. They are kicking and screaming they don’t want to or can’t fix them. The latest deadline they missed was again their choice.

      • 0 avatar
        tedward

        NickS

        I think the charitable view of those comments was that the company as a whole, or at least those dealing with these regulators, did not understand where the emissions violation was coming from in their own vehicle. That, I actually think is likely up until the end, but it’s a bit of a stretch to assign that meaning to his words. If it wasn’t for the language barrier I would scoff at that friendly an interpretation. Since then it sounds like vw has taken an axe to the relevant departments. I can actually completely see how 45 days would in no way be sufficient.

        I don’t think the deadline was set with the expectation that the issue would be settled. It was a proper time period for a cooperative strategy with the doj to be put in place and for the next round of public back and forth to fall on a still interested public audience. The publicity is the point for carb, not the solution. What they want is to be seen as on the vanguard of environmental protectionism, and to be seen as a serious and scary player to industry. They have succeeded in that I think.

        Carb is never doing to escape the antipathy it has generated in the enthusiast community nor is it ever going to have a partnership relationship with industry of any stripe. They are a hostile dance partner that, I think, views themselves as separate from other government goals in a way that the epa never would or could. In that context being the big bad wolf in public is exactly the right strategy for them.

        It may not be how i would like to see my tax dollars being spent but then, I don’t pay California taxes.

    • 0 avatar
      Matt

      It takes me 45 days just to get a cheap injection mold made for cheap plastic products. People who think that they can do all this so quickly do not really understand manufacturing.

      • 0 avatar
        bumpy ii

        Nobody expected the cars to be fixed in 45 days. What CARB and EPA wanted was a full, good-faith effort by VW to develop a plan to fix the cars, and to at least offer a valid proposal within that timeframe. VW apparently couldn’t even manage that much, which is why CARB and EPA had to give VW a Nagasaki.

      • 0 avatar
        NickS

        @Matt

        On the very narrow issue of finding a technical solution, sending it to production, deploying it as well as figuring out the logistics, legal and financial ramifications yes, that is true.

        Let me make this relevant to your example.

        If your injection molds contain some banned substance and you are expected to fix them immediately after you are made aware, you will get plenty of sympathy from me and everyone else. Let’s call that plan A.

        Now, plan B – you just go on continuing to dismiss those allegations, and it is discovered that your suppliers told you way back when you started that the raw material they sell you is going to be illegal for your application, and a third party warns you their tests show a banned substance, and the regulators are making inquiries too and you even go as far as issuing some pretend-fix, and you generally show disregard for any cooperation with the authorities for a long while, it eventually becomes irrelevant what the manufacturing constraints are.

        If you followed plan A you would get plenty of forbearance from regulators to figure out how to come up with a fix, or how to make the finances work. If you follow plan B eventually noone will care how fast you make a new injection mold that is compliant. It becomes irrelevant.

        The fix has nothing to do with manufacturing limitations at this point. It is entirely about VW believing they shouldn’t have to fix these cars in any way that involves them spending money.

        • 0 avatar
          Matt

          I understand what you are saying, but this was still a tall order. Assuming that they’d need to add emissions components, they have to work with multiple suppliers, including the same supplier who made the illegal code in the first place. There is a lot to coordinate. And there is probably a lot of testing, retesting, etc.

      • 0 avatar
        redav

        I don’t interpret it to be the fix ready to roll out in 45 days, but rather to have a workable plan for how to fix it.

        • 0 avatar
          heavy handle

          Here’s what CARB stated in their rejection letter:

          “First, VW fails to describe the noncomformities in sufficient detail for CARB to adequately understand them in the context of the recall plans, in order to determine whether the proposed fixes are feasible or would remedy each of the nonconformities. Second, VW fails to specifically describe the fixes in its proposed recall plans in a manner that allows CARB to adequately evaluate whether they could be successful or are even technically feasible. Third, the proposed plans do not sufficiently address impacts on the engine, the vehicle’s overall operation, and all related emission control technologies, including the OBD system.”

          Short version: the plan isn’t fully fleshed-out. VW submitted an incomplete (“insufficient”) plan, because the law says they have to submit something within 45 days. The alternative was to submit nothing, and that would be much worse.

          45 days isn’t enough time to resolve all the hypotheticals and to submit a “sufficient” plan. There are just too many details to work-out.

    • 0 avatar
      Von

      Not only has VW known about this for two years, they already know how to fix it. Some of their diesels are compliant, so there are already ways to do it in house. Urea injection technology is readily available from any of the big suppliers (Bosch for one). Or they can just take the performance and mileage hit and change the software, nothing to manufacture at all.

      The issue here is not if they can fix this quickly, but VW wants to spend the minimal amount of money fixing the cars and reimbursing the customers. None of the execs want to stand up to the shareholders and tell them I have authorized the 2 or 3 billion dollar plan to fix it. Instead, they want to say we have a 2 or 3 billion problem, and I solved it for $300M, can I please get a big bonus for Christmas? This has been my experience with “industry”.

  • avatar
    Master Baiter

    “…that have harmed the health of Californians….”

    Evidence?
    .
    .
    .

  • avatar
    kosmo

    Advice to Muller:

    Anybody: Could we get an interview, Mr. Muller?

    Muller: I am sorry, but no, I am devoting all available time to fixing this problem we have caused.

    It’s simple. Be polite, be apologetic, and BE FIXING THE PROBLEM IN A TIMELY MANNER.

    He is blowing this up to the point that it will end up being quietly settled at the Secretary of State level — though that will never appear to be the case. And if that happens, VW will pay a huge debt to Ms. Merkel somewhere down the road.

    • 0 avatar
      28-Cars-Later

      I know I’m going off on a tangent and acknowledge it in advance but in your VW-German Gov’t scenario my thought on Merkel is f*** her. VAG is one of the if not the most powerful industrial concern in Germany, any “fine” money spent is much better spent overthrowing the traitor Merkel’s gov’t and replacing it with something backed by VAG. The ensuing chaos doesn’t excuse VAG fines in the US or other nations but it takes pressure and attention off of them for a time and allows VAG to install a new friendly gov’t who forgives any fines for help in reshaping the new country for the better.

    • 0 avatar
      Pch101

      You wrongly assume that it’s easy to fix this in a timely manner.

      The most effective solutions are simply too expensive to implement, so there is a need to negotiate. How do you think that it got this way in the first place?

      • 0 avatar
        28-Cars-Later

        VAG seems to have steamed off the US authorities which brought this to light in the first place. What incentive is there for them to negotiate with VAG now?

        • 0 avatar
          Pch101

          The feds are obviously miffed, no doubt, but something will be negotiated eventually.

          The point remains that a technical fix that complies fully with the law is probably impossible. If there was an easy quick affordable fix, then it would have already been underway a long time ago (and the law probably would not have been violated in the first place.)

  • avatar
    zip89105

    I love it. A bunch of government appointee’s without a background in anything but Brown nosing making rules for everyone else without qualifications.

  • avatar
    Storz

    Think this rejection improves the odds of a buy back from VW?

  • avatar
    George B

    Seems to me that there are many different variants of the Volkswagen 2.0 liter diesel. Surprised that Volkswagen wasn’t able to get approval for changes to get the most recent ones, the ones with DEF hardware, into compliance with at least the EPA regulations.

    Not surprised that Volkswagen is having more trouble engineering a retrofit kits for the older models without DEF hardware. Not trivial to add the fluid tank to several different models.


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