Volkswagen Experiences Dej Vu in the European Court of Justice
Volkswagen had another day in court, and it wasn’t a good outcome for the company this time, either. The European Court of Justice ruled that the software VW used to override emissions tests was illegal under European law.
You may recall that in September 2015, US regulators discovered that VW had manipulated diesel emissions, a scandal that has cost Volkswagen more than 30 billion euros from lawsuits by owners claiming a loss of value.
Europe’s highest court ruled in favor of VW diesel purchasers who alleged they were duped, believing their vehicles produced significantly fewer emissions than they did. With all the advertising the company did to hype their cars as the cleanest and greenest cars on the planet, it was a catastrophe of immense proportions.
In a decision said to have wide-ranging implications for ongoing class-action lawsuits against VW, as well as other European automakers such as VW’s sibling, Audi, and Daimler, Mercedes-Benz’s parent company, the Court ruled VW’s emissions-defeating devices could not be justified on the grounds of engine maintenance, or that they contributed to preventing the aging or clogging-up of the engine, as the company had pleaded.
After an initial ruling handed down in April 2020, Volkswagen had petitioned for a limited interpretation of the law, limiting the definition of a defeat device to technologies and strategies operating downstream of the engine, or after the production of exhaust gases. The Court decided upstream technology was also applicable, which included the software VW used to manipulate diesel exhaust emissions under test conditions.
The Court’s ruling said the software must allow the engine to be protected against sudden damage and only immediate risks that give rise to specific hazards while driving justifies its use. Changes in how diesel exhaust emissions are controlled are expected. Thermal windows, where exhaust gas filtering is lowered or shut down to protect engine components at certain temperatures, are being used by European manufacturers.
The ruling also opens the door to what may be a record number of recalls and lawsuits. So much for being the people’s car, as Volkswagen translated into English, means.
Scalewoodman on Dec 18, 2020
Brand legacy, for the consumer, is shorthand for a predicted experience (TRUST and CONSISTENCY). Brand, the Great Intangible, has amazing power. The Volkswagen name, revered for generations, took a serious hit over this whole fiasco from which it may never fully recover. Customers appreciate efficiency and shareholders want value and profits, but real people have no patience for cheaters- something deep in our psyche loves revenge (some call it Karma) especially when our cultural differences sometimes interpret German dour judgements as absolute arrogance. We see the harm to Nissan after the Ghosn fiasco... Toyota after the (real or imagined) unintended acceleration crisis... best example Audi in the '90s. Humility in all things. And if your management hierarchy creates a culture of fear and intimidation, DON'T GET CAUGHT cheating.
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