VW diesel deception known by highest execs, lawsuits say

Every scandal comes down to a set of related questions: who knew what, and when did they know it?

Thus far, in the VW diesel emission scandal, those questions remain unanswered.

A report from an independent inquiry into the entire chain of events, commissioned by VW Group and conducted by law firm Jones Day, was to have been released in April.

DON’T MISS: VW diesel plan gets preliminary approval, but buyback offers won’t start yet

That date has been pushed back indefinitely by VW, likely to the end of the year or perhaps even later.

The company said that releasing the report and its conclusions could interfere with investigations into the matter by German authorities.

While suspicions have long swirled about the role of former VW Group CEO Martin Winterkorn, who resigned just days after the scandal broke on September 18, no one knows for sure.

The company has maintained that the deception was known only to a small group of engineers in its powertrain division, and had not been approved by top executives.

But lawsuits filed last week by the attorneys general of Massachusetts, Maryland, and New York eight days ago suggest that  the very highest levels of the executive team were aware that the company had chosen to cheat.

As The New York Times recounts, documents in the lawsuits say that Winterkorn’s replacement and VW Group’s current CEO, Matthias Müller, was “aware of a 2006 decision to not outfit Audi vehicles with equipment needed to meet American clean-air standards.”

ALSO SEE: VW diesel deal: what should I do? Take buyback? Wait for updates?

At that time, Müller was head of project management at Audi, with responsibility for vehicles that included those sold in the U.S., a key profit center for VW Group’s highest-volume luxury brand.

The suits do not, however, indicate that Müller knew specific details about the various “defeat devices” developed for different versions of the diesel engines to be sold in the U.S.

Both Müller and Winterkorn have denied knowing about the deception, which affected almost 600,000 vehicles sold from 2009 through 2015 by Volkswagen, Audi, and Porsche.

Consumer Reports tests 2015 Volkswagen Jetta TDI diesel in 'cheat mode,' October 2015

Consumer Reports tests 2015 Volkswagen Jetta TDI diesel in ‘cheat mode,’ October 2015

Enlarge Photo

The lawsuits draw heavily on documents and e-mails from within VW Group, as well as interviews with witnesses.

In the words of the Times, the evidence “depicts a corporate culture that allowed a ‘willful and systematic scheme of cheating.’ “

The engineering challenges of getting European diesel engines to pass new U.S. emission limits that took effect on January 1, 2008, were immense.

CHECK OUT: What will I get for my VW diesel car in the buyback?

And Volkswagen was the only maker that proposed to sell small diesel engines in mass-priced vehicles, including the VW Jetta compact sedan and Passat mid-size sedan.

Other makers, notably BMW and Mercedes-Benz, used diesels only in cars with prices from $35,000 to $100,000, giving more leeway to fit the expensive exhaust aftertreatment systems that VW avoided.

“In late 2006, facing these engineering challenges and a management-imposed production deadline, and with the knowledge and approval of their managers” the suits say, “olkswagen’s Wolfsburg engineers adopted defeat-device software first developed at Audi but not used by that company.

The lawsuits just from the three states that filed last week could expose VW to additional $500 million in penalties, above the $15 billion it has agreed to spend in settling a national class-action suit.

If other states file their own suits, following the lead of Maryland, Massachusetts, and New York, that total could rise substantially.

_______________________________________

Follow GreenCarReports on Facebook and Twitter.

Source link