By on April 27, 2016

TDI Clean Diesel

If you want your nefarious plan to stay on the down low, try not to make a PowerPoint presentation on it.

That’s an obvious takeaway from the New York Times report that details a bombshell discovery made by investigators probing documents and laptops related to Volkswagen’s diesel emissions scandal.

It’s already known that Audi designed the infamous “defeat device” at the heart of the scandal back in 1999, and that Volkswagen waited six years before deciding to use it.

But corporate culture being what it is, company representatives needed some pointers on the illicit technology. And thus, the incriminating PowerPoint was born.

The New York Times report, drawn from two sources who viewed the document, says the PowerPoint presentation was crafted by a senior technology executive in 2006, after the company made the decision to use the defeat device in its new “clean diesels”:

Just a few pages long, the 2006 presentation included a graph that explained the process for testing the amount of pollution spewing from a car. In a laboratory, regulators would try to replicate a variety of conditions on the road.

The pattern of those tests, the presentation said, was entirely predictable. And a piece of code embedded in the software that controlled the engine could recognize that pattern, activating equipment to reduce emissions just for testing purposes.

The technology was subsequently refined to recognize other signs of regulatory testing, according to hacker Felix Domke, who analyzed the software with the finest of combs.

Volkswagen and its executives failed to respond to requests for comment from the newspaper. The report doesn’t name the PowerPoint’s creator, and the question of who saw the presentation remains unanswered.

It’s possible some Volkswagen heads are still due for the chopping block, but the company has already paid an astronomical price for its consumer deception.

Besides sales that resemble a jetliner’s trajectory following a double bird strike, the company has carved out $18.2 billion from its struggling operation to fund last week’s settlement with U.S. consumers and regulators.

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91 Comments on “‘Defeat Device’ PowerPoint Presentation is Volkswagen’s Latest Embarrassment...”


  • avatar
    Storz

    And just when you think the trainwreck couldn’t be any more trainwrecky…

    • 0 avatar
      Lou_BC

      A train wreck into a nuclear power plant that just got hit by a large meteorite in ISIL controlled territory and everyone on the train is naked and circumcised.

      • 0 avatar
        redmondjp

        With the safety containment vessel around western-designed nuclear reactors, none of what you described would have had any ill effect on the critical safety of the plant.

        I used to work at one – The containment vessel was designed to withstand a direct strike by a 747 aircraft without any breach.

  • avatar
    redliner

    It’s getting harder and harder to claim that this was unsanctioned tampering by “a few” engineers. This was obviously and open secret amoung certain engineers and executives.

  • avatar

    Why yes, we ARE amused…..

    (passes popcorn)

  • avatar
    5280thinair

    The PowerPoint presentation finally provides an answer to the question “If they could make it pass during testing why disable it on the road? ” The emissions control devices they used weren’t robust enough to last in everyday usage, so they disabled them in normal driving to extend their life.

    Anyone who’s worked in a large corporation questioned the assertion that this could have been restricted to a few rogue engineers. Not surprisingly, it went much further than that. Saving a few hundred dollars per vehicle probably doesn’t look so smart now.

    • 0 avatar
      brettc

      I think if it was in “clean” mode all the time, VW would have been replacing a lot of DPFs well under the federal emissions warranty limit. Of course they saw that as an unnecessary expense at the time.

      Just like when you don’t maintain a VW on schedule, things have gotten exponentially more expensive for them than they ever had to be.

    • 0 avatar
      DeadWeight

      IF this is proven to be factually true assertion, it makes it pretty high up on the list of “dumbest corporate/groupthink follies of all time.”

    • 0 avatar

      ” The emissions control devices they used weren’t robust enough to last in everyday usage, so they disabled them in normal driving to extend their life.”

      My one data point agrees with that…..

    • 0 avatar
      stevenj

      It was always my thought that the device could make said cars meet our emission standards and provide a level of performance not possible within the aforementioned standard. is this not the case?

      • 0 avatar
        Pch101

        The equipment that reduces NOx necessarily causes a slight reduction in fuel economy. But VW’s primary motivation was to have an emissions control setup that did less work, which meant that the hardware could be less robust and therefore cost less. Thus, the software ensured that the smog control devices were being fully utilized during the tests, but only partially utilized otherwise.

        Better hardware used properly at all times would have resulted in a slight reduction in fuel economy and a substantial reduction in profit margin, since consumers aren’t going to willingly pay a premium for lower NOx levels.

  • avatar
    FAHRVERGNUGEN

    When you think about it, the coding was genius; its just the deception which was stupid.

    • 0 avatar
      NickS

      All these students, and professionals who passed their exams by cheating, are they geniuses too?

      That is an interesting definition of genius — commit malfeasance when you know/think no-one is looking (and assume they will continue not looking).

      • 0 avatar
        Russycle

        If those students wrote complicated computer algorithms to enable their cheating, maybe. “Genius” does not imply ethical, or even wise. It may take a genius to figure out how to do something, but a wise person to know it’s not worth doing.

        • 0 avatar
          NickS

          @Russycle
          Hmmm, wait, you (and perhaps F) mean that what VW did was genius at the *technical* level?

          How much do you know about embedded software?

          There is real genius in ECM programming for a most every aspect of running newer engines with features like lean burn, etc. This sensing when a vehicle is being tested and turning on emissions controls is very basic.

    • 0 avatar
      Lack Thereof

      The coding wasn’t particularly genius, either. Any 1st year computer science student could write the necessary sequence of IF / ELSE checks.

      The algorithm to determine if the car was undergoing a test would be incredibly simple, compared to the rest of the algorithms required to actually operate the vehicle.

  • avatar
    sirwired

    At this point, it’s not this Powerpoint deck that’s particularly shocking. It’s silly to imagine that a small team of engineers could, on their own, do something this terrible. OF COURSE they had upper-management buy-in. (Though I have to admit, the detailed candor of “I’m going to put on paper, in excruciating detail, how to program our cars to cheat on emissions tests” shows either severe-Asperger’s-level social-cluelessness, or complete and total arrogance; I’m not sure which.)

    For me, the worst part of that article was the VW exec’s shock that the US govt. reacted so strongly. He appeared to think, that after VW had outright mocked the EPA’s competence for an entire year, that the EPA would give them four months of damage control after VW finally fessed up to the lies. As if a criminal is due some sort of deference and respect from the police after confessing to a crime. (And this document expressing shock was written in January, not the week after the initial reveal.) Not to mention them STILL Fighting over the 6-cyl TDIs a couple months later; thinking that this was a good time to argue regulatory semantics.

    That, more than anything else, shows that VW is rotten to the core, Just Does Not Get It, and deserves whatever the authorities throw at them.

    It’s one thing to cheat on emissions/economy regulations; as has been pointed out many times, it’s not exactly new, and the fines have been no more than a Cost of Doing Business. But VW not only cheated, but instead of ‘fessing up when caught, and making the customary token round of firings, they tried to worm their way out of it by doubling down on the lies, insulting their regulator in the process. Donald Trump might admire that sort of chutzpah, but the authorities generally are not amused.

    • 0 avatar
      3XC

      “As if a criminal is due some sort of deference and respect from the police after confession to a crime.”

      Corporate defendants that commit white collar/regulatory crimes in the United States routinely do received deference and accommodations from the FBI and courts. VW was shocked because the usual pattern is to allow time to find a mid level manager/inconsequential nobody to act as a Patsy. The thought that executives might actually be punished probably never occurred to them, because why would it? Justice is bought and sold and corporations are wealthy. Consequences are the sort of thing those OTHER people face. And this same corporate culture and the media companies they own and control still question the appeal of outsider Presidential candidates.

      • 0 avatar
        JimZ

        ” The thought that executives might actually be punished probably never occurred to them, because why would it?”

        then they’re doubly clueless. there have been a number of auto suppliers caught price fixing, which sent execs to prison.

        http://www.wsj.com/articles/SB10001424052702304526204579099181709700164

        “The Justice Department also has charged 21 executives. Many already have been sentenced to U.S. prison terms of a year or longer.”

      • 0 avatar
        sirwired

        Plenty of execs that have run the ‘perp walk would disagree with that statement.

        Large companies get deference when they cooperate with investigations; that cooperation does indeed give them time to devise clever strategies to foist blame and minimize damage.

        VW didn’t cooperate. At all. They completely stonewalled and told the EPA they didn’t know how to use testing equipment properly. And, in return, the EPA did the equivalent of putting an entire company on the perp-walk.

        • 0 avatar
          yamahog

          It seems like the automotive industry has received a ton of scrutiny from the Obama administration. A good number of execs have avoided perp walks with shareholder’s money. Exactly how many people were brought to trial for 2007/2008?

          And most of those execs accused of price fixing were convicted in absentia. Japan isn’t going to extradite many of the people caught up in that. And really their only crime was that they didn’t get a big accounting firm to bless the price fixing as ‘transfer payments’.

          • 0 avatar
            VoGo

            “It seems like the automotive industry has received a ton of scrutiny from the Obama administration”

            Does ‘scrutiny’ mean ‘saving’?

          • 0 avatar
            mtmmo

            Though snowflakes wish to believe differently it was Bush who did the bailing. Obama ended up providing the necessary protection so no one in his new donor class ended up serving time. As Biden said, “Time heals all wounds”.

            http://www.newyorker.com/news/john-cassidy/an-inconvenient-truth-it-was-george-w-bush-who-bailed-out-the-automakers

    • 0 avatar
      notwhoithink

      “It’s silly to imagine that a small team of engineers could, on their own, do something this terrible. OF COURSE they had upper-management buy-in.”

      I absolutely agree, and have been saying so since September. The part that was shocking to me was that the board, led by Winterkorn, apparently refused multiple requests from underlings to fix the solution and stop cheating because it would cost “several hundred dollars per vehicle with no improvement that was perceptible to the customer”. Before I had always assumed that Winterkorn simply played hard-ass and demanded that they make compliant cars or be fired, so a few engineering groups cooked up a cheat with the approval of middle managers. But now it’s clear that the cheat was widely known, even up to the board? That’s really damning, if true.

      • 0 avatar
        JimZ

        I think the other prong to this is it’s clear Winterkorn and other higher-ups at VW thought the EPA would be just as spineless and ineffectual as EU regulators are. They seriously didn’t believe the EPA could or would hit them with such severe penalties.

    • 0 avatar
      VM

      I’m not sure I agree with this statement: “(Though I have to admit, the detailed candor of “I’m going to put on paper, in excruciating detail, how to program our cars to cheat on emissions tests” shows either severe-Asperger’s-level social-cluelessness, or complete and total arrogance; I’m not sure which.)”

      When large organizations engage in unethical/illegal behaviour and get caught, the organization will look for someone to blame… and possibly hand over to government authorities for prosecution. Ideally someone as far away removed from the current executives…

      The person who prepared this presentation in excruciating detail just guaranteed that he/she won’t be the ‘fall guy’ because the more senior executive(s) at that meeting knew EXACTLY what was about to happen and did exactly nothing to stop it.

      Had that same person prepared a very vague presentation without the details, the senior participant at that meeting could easily say “but I never understood that they were planning to cheat! I was in a hurry to get to my next meeting, I thought they were describing some new compliant technology so I quickly told them to go ahead. Had I known those rogues were talking about CHEATING and ILLEGAL ACTS of course I would have stopped them and fired them” and pass the blame to the presentation creator.

  • avatar
    Land Ark

    Did the PPT originate in the US or in Germany? That seems like a key detail left out of the NYT article unless I’m missing it.

    • 0 avatar
      sirwired

      VW, unlike many automakers, does not do any engineering in the US. It would, by necessity, had to have originated in Germany. Maybe they had a US engineer help with translation of US regulations, but all the powertrain work is done in Europe.

      • 0 avatar
        Land Ark

        I have to assume there are Technology Engineers here. I could see the word coming down from Germany with no documentation but then when the Tech Engineer here got it created a PPT to help explain it to the folks here. That would give Germany plausible deniability still – that is was limited to a few people there.

        • 0 avatar
          Lack Thereof

          In 2006, when this PPT was created, Volkswagen of America did nothing but marketing and logistics. They hadn’t even opened a factory in the US at that point, much less any engineering facilities.

    • 0 avatar
      NickS

      It would have to be Germany. The cars were wholly engineered there.

  • avatar
    sportyaccordy

    Paging that VW16V fanboi….

    I have a garbage tub of white cheddar popcorn.

    The saddest part? I would STILL buy a GTI over pretty much any of its competition. I only say pretty much because I may be forgetting something.

    • 0 avatar
      CoreyDL

      They make good car’s, and when I see VW’s embarassing like a M3’s and a M5s’ at stop light’s, I know I’m in the right car for me. Lexus’s’ can’t even compete with luxurie’s like at the Passat 2.0T.

    • 0 avatar
      hubcap

      Sporty, have you driven a WRX yet? Go take one for a test drive. I’d be interested in your opinion.

      That said, the GTI is a nice car as is the Golf R. For me, it all comes down to how much you want to spend but it would be between the R and the WRX.

  • avatar
    seth1065

    Well of course it is in a powerpoint the Germans are very detailed in that way.

  • avatar
    tylanner

    There was already an abundance evidence supporting the theory that this device was well socialized and accepted among VW engineering and management.

    This is truly embarrassing though…dirty laundry to be sure…

    It is going to incredibly difficult to wrangle and reprimand when the fraud is of such scale and the impact so arbitrary. I feel however that the precident must be set down extremely harshly upon VW. It is astonishing that the fraud could be sustained for so long without being whistle blown or the EPA/consumer protection getting thier stuff together…

  • avatar
    Notadude

    Only because it’s now clear I will be able to sell my VW back did I find the NYTimes article amusing. Even made me chuckle.

    • 0 avatar
      brettc

      I’m thinking this example of their arrogance will help the cause for full purchase price buybacks/rescission. Maybe I’m wrong, but I hope not.

      • 0 avatar
        Notadude

        That would be so sweet. Hadn’t thought about that before. All available news sources keep repeating the notion of buying the cars back at fair market value pre-scandal.

        • 0 avatar
          brettc

          Indeed. The FTC was looking for rescission in their filing, so maybe it’ll happen. I like my car overall, but something new (that doesn’t regen in my garage randomly) would be splendid.

          • 0 avatar
            Nick 2012

            I don’t think full purchase price will be offered. Rescission is an equitable remedy. As guilty as VW is, buyers still got a functioning car for years. It is not possible to give bay a 2010 TDI in the same condition you bought it in as if the transaction never happened. If such a buyer got their full purchase price back, they’d gain a windfall by having a free vehicle for the better part of a decade.

            I would guess there would be a limited and very customer friendly depreciation matrix based on age and mileage.

          • 0 avatar
            DenverMike

            “Windfall”? For full price? What’s your health worth? I own an ’06 ‘pre emissions’ diesel pickup *except* I knew exactly what I was buying and getting into. So I limit the time idling/warming up/drive thrus/etc, especially in tight spaces and places that force me and my family to breath the cancerous exhaust.

            Sell me something “CLEAN” and I expect exactly that. It’s no different than having 40 ‘Test Cycle’ “CLEAN” TDI VW all idling in my carport or garage with the door open, inhaling the exhaust of all those all the damn time.

            Heck, forget about full price, MSRP, I want punitive damages on top of it.

      • 0 avatar
        notwhoithink

        Well, the buyback agreement hasn’t been settled yet. All they had was an agreement in principle. I’m going to go out on a limb and assume that this news (and anything else like it that becomes known over the next two months) is going to heavily influence what the plaintiffs’ attorneys and the FTC are pushing for in the settlement.

  • avatar
    APaGttH

    Memo to future business leaders:

    If you’re thinking of doing something illegal (VW) or immoral (Toyota) DON’T PUT IT IN A POWERPOINT PRESENTATION.

  • avatar
    TrailerTrash

    VW is starting resemble myself to a disarming degree.
    IF I had to look over all the deceitful, stupid and nasty things I did and said through my life, that would indeed be the TRUE HELL.
    And sooo much of it is committed to paper or movies or recordings!
    Even the songs I wrote and recorded years ago are embarrassing to listen to today! Papers written in College are really cries of help or insanity. Certainly stupidity and naivety
    .
    So real hell is not down deep in the heat with the red Devil.
    No…right here duck taped to a chair being forced to revisit my earlier actions and sayings.

    This is the problem with the Internet. Like what I’m writing now…I am gonna click send it and soon it will be added to that shameful list.

    What is that saying? The proof of insanity is somebody repeating the same stupid stuff? Well, here we go.

    So it is kinda uncomfortable watching VW these days.
    It just seems to hit home and warm up the guilt ambers.

  • avatar
    Robbie

    I thought that anything that is even ‘controversial’ in the slightest is done verbally, pretty much anywhere, with nothing in writing or email. It is just a sign of how sweet, innocent and cute a company VW is that they don’t have that as their routine.

    Surely GM has special soundproof rooms everywhere for discussing extra-moral things!

  • avatar

    Was their corporate counsel unaware of how document discovery works, or just unaware of what the execs and engineers were up to? There’s no answer to questions like this that don’t lead to share-liquidating investor conclusions (if anyone actually still carries VW stock).

  • avatar
    Paddan

    I’d guess the best Volks investment is now air cooled.

  • avatar
    John

    Harvard Business School Course Book 2018: “How to Deal With a Public Relations Disaster”. This course will deal with principles of triage, public relations, crisis management, and business salvage. Students will conduct an in-depth review of VAG’s handling of “Dieselgate”, and write term papers detailing everything that was done wrong, and how this led to VAG’s declaration of bankruptcy, and re-organization under German government control in 2017.

  • avatar
    NeilM

    Apparently WWII taught the Germans nothing about the consequences of keeping detailed records of your misdeeds.

    (Still like my Golf R though…)

    • 0 avatar
      Robbie

      How’s the ride in your Golf R, not too harsh and noisy for daily use?

      • 0 avatar
        NeilM

        “How’s the ride in your Golf R, not too harsh and noisy for daily use?”

        Not in the slightest, even with the original 19″ wheels (which I’ve ditched in favor of 18″). I usually keep the DCC (variable shocks) set to Normal, which handles urban potholes and the like just fine. The Comfort setting is good for bad highways where you hit road imperfections at speed, and the Race setting, which ought to be called Sport, is firm but everyday usable if one is so inclined.

        This is a sporting car which passes the wife test with ease.

  • avatar
    Whatnext

    Never before has a Powerpoint presentation been so spellbinding.

  • avatar
    geee

    I’m assuming someone was bright enough to go to “file” menu, “properties” and check if said dumas was clever enough to leave their authorship info.

  • avatar
    Jack Denver

    As Domke points out, the smoking gun is present in the ECU code in every single car, so even if they had never written down a thing and held their meetings in the Cone of Silence, the proof is still there, millions of copies of it. The cars go into “alternate” (stop adding AdBlue) mode in certain “special” circumstances, such as when the engine overheats or (oops) when the ambient temperature exceeds -3268 degrees Kelvin (i.e. always) AND the car is not inside an emissions test cycle. When (and only when) the car detects it is in a test cycle, the AdBlue system goes into “normal” mode and the emissions go way down, but the instant your speed falls outside the test cycle parameters, boom it goes back into “alternate” mode. It’s impossible that this code could have been introduced without the knowledge, indeed the orders, of higher ups in VW. You don’t need a power point to prove this. As they say in law “res ipsa loquitur” – the thing speaks for itself.

  • avatar
    VoGo

    The B&B loves to criticize the NYT, but you see, this is what they do. Actual journalism. Journalism may be a dying industry, but some of us still believe that an informed voter is essential for democracy.

    • 0 avatar
      ToddAtlasF1

      You’re right. The 169,000th story about the VW diesel scandal is far more informative for the voters than a story about Hillary Clinton’s criminality or Donald Trump’s history as a political amoeba. At this rate, they’re probably about to get around to covering why lying about Bengazi was important for Obama’s 2012 reelection hopes. You know how the NYT wants informed voters more than they want to forward an agenda!

      *edit – Surely you weren’t being serious and I just fell for blatant trolling. Mea culpa.

      • 0 avatar
        VoGo

        Are you the same ToddAtlasF1 who remarked in response to Ronnie’s latest article that progressives are the same today as they were in Germany in the 1930s? Didn’t you also claim that straight white males find niches in today’s current fascist power structure, just as some Jews did in past progressive movements?

        I detect a pattern here.

    • 0 avatar
      Lou_BC

      “an informed voter” – Alex, I’ll take oxymoron for 400 please.

      Sorry.

      I couldn’t resist.

      I do agree.

      If we actually had informed voters the GOP Primary wouldn’t be the freak show that it currently is.

      Might as well add, “And comments about Bengazi.”

      • 0 avatar
        ToddAtlasF1

        And Bernie Sanders and Hillary Clinton would still be in the race? You think you’re informed, but you don’t seem to know about the false narrative built by the Obama administration in order to avoid having their lies about the substance of the terror threat coming out during the 2012 election. You’re not a US citizen, so it isn’t your responsibility to know about such things, but you certainly look the fool for acting like you do.

        • 0 avatar
          Lou_BC

          ToddAtlasF1 – citations required or did the tornado wipe out the Rush Limbaugh Library wing of the trailer park?

          I don’t know of any political pundits criticizing the Saunders/Clinton side of the equation the way they pick apart the GOP one. I also don’t see the Dems looking for ways to sneak in an alternative candidate.

          Better luck next time.

          • 0 avatar
            ToddAtlasF1

            Do you even know who Bernie Sanders is? Do you know who Vince Foster was? Do you know who Paula Jones, Juanita Broaddrick, and Kathleen Willey are? Do you know what Whitewater was? Do you know what Hillary Care was, or about Hillary’s midas touch in the stock market? Do you know about the Clintons having to return the $200K in furniture they stole last time they vacated the White House, or the $80K in damages they had to reimburse the US for after they looted? Do you know about Hillary being fired from the Watergate commission, or about her laughing about a child rape victim she crucified on the stand years after the fact on tape? The media takes advantage of willful ignoramuses like you by reporting only what furthers their statist agenda. Your lack of character makes you easy prey for propagandists. You seem proud of how malleable you are for the people that will strip your rights. Pitiful.

  • avatar
    Robert.Walter

    Rogue engineers Piëch and Wintercorn,
    sitting in a tree,
    Set the tone years ago,
    For all we now see…


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