Dear Volkswagen: This Was Your Biggest Mistake

Tyler Durden's picture

As we previously commented when it comes to justice, there are those companies that have been bailed out by the US Government, and then there is everyone else. Case in point, GM, which last Thursday was fined $900 million for covering up its faulty ignition switches that caused at least 124 deaths and hundreds of injuries.

The deal with GM was cut by U.S. Attorney for the Southern District of New York Preet Bharara, who said there’s no federal criminal penalty for knowingly putting a deadly product on the market. "It has been a challenging case, for the agencies, for the prosecutors and for me," Bharara said.

As a result, nobody was prosecuted by the US government. 

"I don’t understand how they can basically buy their way out of it," Margie Beskau, whose daughter Amy Rademaker was killed in an October 2006 crash, told the Times. "They knew what they were doing and they kept doing it."

"So much for the Justice Department’s new strong policy on individual prosecution,” University of Maryland Law Professor Rena Steinzor told Corporate Crime Reporter. “This settlement is shamefully weak. A GM engineer knew about the fatal defect even before the first car rolled off the line. He secretly changed the part in 2005 but left hundreds of thousands of cars on the road with the bad switch. GM lawyers conspired to delay the recall. Much harsher penalties and individual prosecutions are warranted. The deferred prosecution is a toothless way of approaching a very serious problem.”

* * *

And then there is Volkswagen, which earlier today took out a record charge of €6.5 billion, one which many think will be insufficient before all it set and done, following its own snafu involving manipulating emissions tests to make its cars appear "cleaner" than they were.

Yes, GM killed people, but Volkswagen killed the air!

While one can debate whose crime is greater, it is quite clear that the punitive damages so far are orders of magnitude apart.

Why? This is precisely what Volkswagen executives, many of whom will lose their jobs in the coming days, are scratching their heads over.

We would like to take this opportunity to explain to them "how it is done" in the US.

 

 

 

How does Volkswagen stack up?

 

To summarize Volkswagen's biggest mistake: it was not poisoning the environment, it wasn't even getting caught. It was this:

 

Source: OpenSecrets Volkswagen and GM

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insanelysane's picture

You are a MORON!  The original design was not willful or malignant but once the original design was found to be flawed GM management refused to fix the issue for ever.  After they were found to have killed people, they still refused to fix the problem.  There was no fix until .gov stepped in and forced them to fix it.

TalkToLind's picture

No 50 mpg diesel cars for you! It's gasoline with corn juice for you Murican slaves or nothing, now shut up and pay your taxes.

 

Love,
The EPA

firstdivision's picture

E85 > diesel

Looking to do the swap to my car, just need bigger injectors and bam, looking at 400whp in a awd vehicle.

Hubbs's picture

Thanks for breaking it down so succinctly ZH. So easy to understand now a caveman can figure it out.

ebworthen's picture

So it must be better for the "environment" if all those Volkswagen diesel drivers trade them in for Escalades?

Is the E.P.A. going after the Dodge/Ford/GMC smoke belching diesel trucks and modder aftermarket?

Of course not!  What a crock.

Consuelo's picture

 

 

"While one can debate whose crime is greater, it is quite clear that the punitive damages so far are orders of magnitude apart."

 

From a position of where priorities lie, I don't think anything need be added to the statement above...

grapeape's picture

all the charts show is that it cost more to buy a rebub than a dem.

ersatz007's picture

holy F^$K batman!  $157M??? 

 

would love to know what %-age of our federal tax dollars used to 'bail' them out went towards the legal bribing of our elected officials. 

Max Cynical's picture

And then there's this...

"28 years for salmonella: Peanut exec gets groundbreaking sentence"

Stewart Parnell once boasted processing the "finest" peanut products, but on Monday, the former company executive was effectively sentenced to life behind bars for knowingly shipping out deadly food.

A federal judge handed Parnell a 28-year prison sentence, the toughest penalty ever for a corporate executive in a food poisoning outbreak.

http://www.cnn.com/2015/09/21/us/salmonella-peanut-exec-sentenced/

dexter_morgan's picture

Maybe, but they make crappy little overpriced cars that don't compete well in any segment they are in so that might be a problem too. 

Refuse-Resist's picture

Disagree. Drive any gasoline powered car that competes with the TDIs in MPG, then drive a TDI.  Get back to me about performance and value.

I've owned a few. Most current VW, bought new 10 years ago, has been the most reliable car I've ever owned.

List of unscheduled maintenance events:

  1. electric fuel pump
  2. Alternator pulley
  3. There is no three. In 10 years.

2005 Jetta TDI 5 M/T -  204k miles.  In the shop getting a new clutch ATM. The stock clutch finally started slipping last week.

 

This has nothing to do with pollution and has everything to do with corpgov.  The foreign competition, diesels in particular, must be stomped. Since it has not happened organically in the free market, the corpgov must step in and 'level the field' and lay down some equality for all of us.

This is affirmative action for domestic automotive manufacturing.

TalkToLind's picture

This has nothing to do with pollution and has everything to do with corpgov.

This is exactly what the gum chewing public needs to understand. People have been thoroughly brainwashed to believe that diesel is dirty and now the EPA has made a move that will serve to eliminate diesel cars from the US market. LOL, Uncle Sugar has played the Murican public again, suckers!

Refuse-Resist's picture

Could this be karmic retribution for the DSG transmission?

 

I say it could.

starman's picture

you can't lobby this shit up! Oh yes we can! Murica!

the grateful unemployed's picture

these cars should have a good resale value in california where used cars need every edge to get by smog certification. and it might be worth studying the volkswagon method maybe it can be made into an add on for smog producing used cars. of course in germany they have a 7 year cash for clunkers program all cars 7 years over 7 go  to recycle but here in america we drive em forever, they become classics and they are worth more than they were new.

Jay's picture

I don't think there should be punitive damages levied by the govt. against car companies. It has become an excuse to step in and steal money from stockholders every time there's a problem with a vehicle. Any damages should be awarded to the victims not the government.

TalkToLind's picture

Comrades!  Do you own an imported 50 mpg diesel engine car in US market? Send it in now for the free recall! Once "repaired" your car will comply with arbitrary EPA regulations. It will also be worth $1500 USD less than before, and it will drive like shit.  

But seriously, now I know why Mazda never released the Mazda 6 in the US market: the EPA made it impossible for them to do it -- if Mazda followed the regulations. Yep, the EPA has only suceeded in "protecting" us from good quality, fuel efficient diesel cars. And in doing so they have actually helped increase the value of unaltered tdi/diesel imports in the used car market. Used, unaltered TDIs will be selling for a premium in the very near future.

 

Refuse-Resist's picture

ProTip: Avoid the super trick race inspired DSG transmission; a dual clutch computer controlled auto shifting manual transmission.They drive great when they work. But When it grenades, it is not rebuildable.

The replacement cost can easily exceed the value of the car -- ~$5k. 

Google can be quite informative in these matters.

If you're long TDI, go with 3 pedals.

 

 

black dragon's picture

i told putin, if he can beat me at chess and give me russian citizenship and diplomatic passport... i would live in st. petersburg 3 months a year. and start up the new RUSSIAN electric car industry.  i have built custom show cars for 30 years.  and designed clean room fabs and electronic assembly lines.

fuck you GM

Argenta's picture

They should've bought better politicians.  Don't those VW idiots understand that?

-Argenta

foodstampbarry's picture

Asians are building the best car for the money... PERIOD.

cheech_wizard's picture

But I would rather have one of these... under $10K US if I am doing my rubles to USD conversion correctly...

http://www.uaz.ru/en/cars/patriot

Standard Disclaimer: Because asian cars suck... or do you really want me to bore you with the story of my Toyota Camry that repeatedly popped out of gear when going downhill?

 

Joebloinvestor's picture

Like I said, this is what happens when you don't contribute to the Clinton foundation.

The new "Avoid Prosecution" card to be played when needed.

TalkToLind's picture

Hey Mazda, you did the right thing not releasing the Mazda 6 diesel in US market, Uncle Sugar says Murican public is not worthy of this technology. Now please forward a list of South American countries where Mazda 6 diesel is sold so I can begin planning. This move will cost me $2350 USD in fees, but it will be worth it.

FrankieGoesToHollywood's picture

Very insightful article.  Thanks for posting Tyler.

JenkinsLane's picture

Pay to play baby, pay to play.

US Democracy - Hell yeah!

RaymondKHessel's picture

Old GM < VW < New GM

Catullus's picture

Why are we allowing the executive branch to decide torts? It's the single biggest knock of the regulatory state. You have a court system. Just use that. Why give some elbow patches the opportunity to pick winners and losers behind closed doors?

adr's picture

The increased Nitrous Oxide emmisions are the result of increasing the efficiency of the diesel engines. VW did not have the Urea injection system available for the previous generation Golf platform. It is easier to put a new engine in an older platform than to redesign all the plumbing.

Once the new Golf platform was created it had the Urea injection system and can hit the emission targets. There was no possible way to meet the emission regulation on the old platform. It was either cheat the test or not sell the cars.

Nobody is saying anything about the insanity of the regulations on the diesel engines. It is impossible to meet the future regulations. The clean diesel emmision control is a graduated enforcement system. The next step is giving all diesel manufacturers fits because it is simply impossible to manufacture an engine that meets the standard. Either to run lean and have to much Nox or run rich and go over the limit on particulates.

The media is making it seem like VW is cheating to the point that their engines are shooting coal out the tailpipe.

Reality is that the NOX measurements are 40x higher than an insane regulated level that is already 95% lower than older diesel engines.

It would be like a doctor saying you failed to reduce your sodium intake because you used to eat 1000mg and you ate 70mg, but he set your target at 50mg.

You can't get people to buy solar panels, well just jack up their electricity rates 300% and force them to put panels on their roof. I wonder how many Solar City executives lobbied for that one. I'm pretty sure quite a few politicians and utility board members got solar company shares.

The entire system is wholly corrupt and dirty. VW is being punished not because they cheated, every company is cheating on just about everything today, but because they didn't grease the people in charge.

VWAndy's picture

Water injection is just one way to reduce Nox and make more power. This has been known a long time.

yellowsub's picture

I thought this only happens in China?  This is America, damn it!

Angelo Misterioso's picture

maybe the fainter in chief at the other german car company knows a thing or two that is making him dizzy also....

Tarzan's picture

This issue will come full circle!  The truth is they are all cheating the CAFE (Corporate Average Fuel Economy) and Emissions Standards in one way or another.

The Standards are becoming harder to meet and still produce a car that people want to drive.  Many of the cars they produce are just fodder to feed the standard and not intended for the masses, who don't want to drive a tin can with a 3 cylinder motor.  But those cars must be in the lineup of every manufacturer so the standard is met.  Producing cars people don't want is expensive so the creative ways they meet that standard are a guarded secret among Manufacturers.  They're all struggling with this.

Ask any long time Subaru owner about their battle with the dreaded CHECK ENGINE light and all the ways you can find online to circumvent the O2 sensors readings.  From adding an extension to the O2 sensor's mount to get it out of the flow, to adding a resister to lower, thus cheat, the readings going to the CPU, they're all designed to artificially lower the reading of alleged "green house gasses" coming out the exhaust.

Even the required use of synthetic 0W-30 oil in my new Subaru Cross Trek is a result of CAFE Standards - lower viscosity results in higher fuel economy.  Never mind the $90 oil changes, Algore is lovin' it!

And we thought the funny math was exclusive to the accounting department.  Just more goal seeking at any cost....

 

no1wonder's picture

”Hitler Reacts To The VW-EPA Scandal Dieselgate” - superb parody, 3:50 min.

https://www.youtube.com/watch?v=dKef1JFpiCA

exartizo's picture

..the elephant in the room is that GM is vital to America's National Security Interests...

 

VW not so much.

DaNuts's picture

Vdubs built by Mussies in Germany

bid the soldiers shoot's picture

Maybe VW will be able to appeal the $6.5 billion charge and have it reduced.

Let's say if Germany permits the U.S. to bring into Germany 20 new nuclear bombs, each being four times the destructive power of the one that was used on Hiroshima.

Will that be enough, your honor? 

VWAndy's picture

Three things you need to know about Germans. Dont mess with them about beer,soccer or cars. They take that personal.

 Trade war here we come. Watch VW crush everyone in the China marketplace. My guess is they are sitting on a sweet flywheel regen system and are sandbagging on automotive technologies bigtime. They really really did all the math.

 You want to know how far ahead the Germans are? Check out the 917 turbo from the early 70s. Yes boys they did the math, all of it to the last decimal point.

 

buttmint's picture

All Volkswagens---for the most part---are amazing vehicles.

I love my Passat Wagon, now way past 100k miles and able to rip right along!

I once had my 4 cylinder turbo up to 162 miles per hour on a lonesome stretch of I-25 near Wagon Mound. VW makes ground-effects cars.

 

Anyone want to sell me their diesel VW cheap? Contact me!

I prefer tjhe 5-6 speed manual tranny, thanks in advance!

Tarzan's picture

Drove a 5 speed diesel Jetta in the early 90s, was a great car!

VWAndy's picture

I still have my old school 85 jetta TD 5 speed bitches. Door handles sucked ass from day one. 

Joe A's picture

Their TDI and TSI engines are great. Got a Skoda Yeti. My 1200cc engine produces 105 horsepowers and uses 7.7 litres per 100 kilometers. 6 speed with max speed of 170km/h. A bit low on the torc but a great car. Am at almost 110,000km after 5 year. Only problem so far is the distribution chain that needed to be replaced.

TalkToLind's picture

Citizen! Your car's government monitored fuel efficiency has exceeded 50 m.p.g.; pull over immediately and surrender your driver's license. Your bank accounts and other assets have been frozen.

Dominus Ludificatio's picture

There is a price for arrogance.VW was going after all the auto makers that were strugling.They have been buying out everyone.They own a lot of brands(Bugatti,Lamborghini,Ducati motorcycle,Bently,Seat,Scoda,Audi,Porsche)Das auto is now das crap.Gernan engineering means yuo need replace everything at maintenance interval.Why in the world someone not color code wiring.or add complexity just for the hell of it.

cinderalle's picture

so volkswagen did not pay protection money, we are dealing with the mafia

anonymike's picture

Had a Toyota for 13 years with the damn engine light on for emissions nearly the entire time. VW has done their customers a huge favor by eliminating this irritation caused by the criminal gang writ large who call themselves US government. VW needs to pay the fascist US regime its bribes (which should, but won't, be a lot less than Government Motors for killing 174 people) and then market the hell out of fewer engine light problems due to "emissions".

I'll be refusing this warrantee service on my VW TDI to keep this great feature.

dreadnaught's picture

I had a VW Fox....it had an "Oxygen Sensor" light that came on at 65,000 miles. Took it to my cousin who is a mechanic, who lifted the hood, did a little search and pressed a button. It was fixed for another 65,000 miles-

took 2 mins....Cost at VW dealership to fix: $150.00.  was an unneeded bogus indicator to begin with

loved the car though

ParisianThinker's picture

I want my money back.

 

TalkToLind's picture

Just wait a few months and sell it.  It will be worth more then than it is now...if you don't have it "repaired". Those in the know will avoid the EPA compliant diesel models at all costs. Or keep it and enjoy something that is about to become vary rare: a car in the US that can get 50 M.P.G.