Cheaters Never Win: The Volkswagen Scandal Rolls On

October 22, 2015

If Volkswagen aspired to cement themselves in the consumer conscience, they have undoubtedly succeeded, just probably not in the way their public relations department would have chosen.  The company’s ongoing scandal, considered by many to be one of the largest corporate disgraces in recent history, has raised questions from concerned customers, environmental advocates, and legal commentators alike.  One of the latest inquiries of note has been that involving the legality of the new emissions-control devices installed on Volkswagen’s 2016 diesel models.  Although Volkswagen has already admitted to installing illegal software on its 2009-2015 diesel models, it remains unclear whether these same alterations are also present in the current model year.
So, how exactly did Volkswagen end up in this position? To briefly recap, the news about the German automobile manufacturer’s misfeasance broke in a major way on September 18, 2015, when the United States Environmental Protection Agency (EPA) presented Volkswagen with a Notice of Violation.  The Notice arose out of the EPA’s finding that Volkswagen had deliberately installed “defeat devices” on the majority of their diesel models released over the past six years.  These devices essentially allowed Volkswagen to circumvent the emissions standards set by the EPA for all new vehicles marketed and sold within the United States.  When operating normally, the affected cars emitted up to forty times the amount of nitrogen oxides allowed by law.  While undergoing emissions testing, however, the cars’ emissions controls would operate as the EPA intended them to.
Volkswagen’s stock wasn’t the only thing that took a hit in the wake of scandal; the company will have a hard road ahead of it if they intend to rebuild their reputation with both customers and regulators.  Although the company has claimed that degenerate engineers, rather than executives, were responsible for installing the defeat devices, it is the executives who will have to answer publicly for the egregious error.

Installing the defeat devices—regardless of whether or not the corporate brass signed off on it—constituted a clear violation of the Clean Air Act, which means Volkswagen is potentially liable for civil penalties on top of and beyond their public disgrace.

The Clean Air Act, originally enacted in 1970, has at its core the goal “to protect and enhance the quality of the Nation’s air resources so as to promote the public health and welfare and the productive capacity of its population,” and does so by establishing National Ambient Air Quality Standards (NAAQS) to regulate emissions of hazardous air pollutants.  Given the gravity of the Act’s stated mission, it is perhaps not surprising that Volkswagen’s President and CEO, Michael Horn, has already been called in to testify before Congress.  In his statement before the House Committee on Energy and Commerce Subcommittee on Oversight and Investigations, Horn admitted that the defeat devices were installed “for the express purpose of beating [emissions] tests,” although he was personally unaware of the devices’ existence prior to meeting with regulators on September 3, 2015.  The hearing closed with Volkswagen’s fate still unclear, although the EPA purportedly plans to pursue a massive forced recall of the affected models and impose up to $18 million in fines, a far cry from the relative slaps on the wrist imparted in many cases of corporate wrongdoing.
The fate of the company’s 2016 diesel models remains similarly undetermined.  The company has already admitted that its 2016 models “contain emissions software ‘that would potentially help their exhaust systems run cleaner during government tests,’” but not to the same extent as the much maligned defeat devices.  Amidst all the uncertainty, however, it remains clear that a serious gaff by a single company will likely have sweeping ramifications for the entire automobile industry and ultimately determine the rigor of emissions testing they can expect to face going forward.