Volkswagen is in deep trouble. Two weeks ago, the German automaker admitted that it cheated on emissions tests in the US.Then it admitted that the cheating software affects 11 million vehicles globally.
The Real picture behind Scandal:
US Environmental Agency (EPA) stated that since 2009, Volkswagen had been installing an illegal sophisticated software algorithm, dubbed as “defeat device”, to cheat emission tests. While full details of how it worked are yet to be ascertained, the software could sense test scenarios by monitoring speed, engine operation, air pressure and even the position of the steering wheel.
During controlled laboratory conditions in which cars are put on a stationary test rig, the device appears to have put the vehicle into a sort of safety mode in which the engine ran below normal power and performance.
Nitrogen oxide emissions lead to formation of smog in the atmosphere which is responsible for increased asthma attacks and other respiratory illnesses.
Loss to Suppliers:
A key supplier said the German multinational company may now have to come out with "offers" to customers to buy its products and it may, in turn, try to squeeze its suppliers to offset the "additional cost".
A top executive of another company said German politicians are "really upset" by the scandal and potential damage it could cause to image of Germany as a bastion of engineering prowess.
Volkswagen AG has admitted using an engine device to cheat on diesel car emissions tests. It has said up to 11 million vehicles worldwide were fitted with the cheating device.
Merkel: VW scandal won't damage Germany's reputation
The Volkswagen emissions scandal was a "dramatic event" but would not inflict lasting damage on Germany's reputation, Angela Merkel has said.
The German chancellor said on Sunday that the car maker now needed to provide the "necessary transparency".
"But I think the reputation of German industry... is not so shaken that we are no longer considered a good place to do business."
Action Against Volkswagen:
Since Volkswagen stands accused of breaching the Clean Air Act, the EPA can impose a maximum fine of $ 37,500 per vehicle. Moreover, the Department of Justice is contemplating criminal charges.
** For any concerned US car owners, the models expected to be recalled include: The 2009-2015 VW Beetle 2.0L TDI; 2009-2015 VW Golf 2.0L TDI; 2009-2015 VW Jetta 2.0L TDI; 2009-2015 Audi A3 2.0L TDI; and 2014-2015 VW Passat 2.0L TDI.
Engineers' admission:
Several VW engineers had admitted to installing the defeat devices in the company's vehicles, according to another German newspaper report.
Bild am Sonntag reported that the employees had told the company's internal investigation they installed the software in 2008, but did not reveal their identities or say how many were involved.
The engineers said the EA 189 engine, developed by VW in 2005, could not have complied with pollution regulations and cost targets without the deception.
Other Issues:
At present, the software is protected under the 1998 Digital Millennium Copyright Act which makes it illegal to fiddle with the software. The rationale is to prevent the consumers to tamper with emission controls. The flip-side is that it becomes difficult for independent researchers to scrutinize the code to identify problems. Automaker and EPA have resisted the proposals by experts to make exemptions from this Act to enable researchers to evaluate the engines.
European regulators are planning to conduct road tests in addition to laboratory tests from 2017.
This is just the tip of the iceberg and we have to wait and watch which course the Volkswagen, the law-firms, the EPA, and other testing agencies take.
The scam has tripped more than 40 per cent off Volkswagen's market capitalisation. But it has vowed to get to the bottom of the scandal with an internal probe
In Germany, however, there is not a lot of cross-sector flexibility. Car engineers will not retrain to work in the biotech industry, or – heaven forbid – in the services sector. Germany’s dependence on a few industries is one of the reasons why outside opinion of Germany has been so volatile.
It was very different 10 years ago. People spoke of Germany as the sick man of Europe. A few years later the same observers held up Germany as the example of a competitive economy. The baton of the sick man now rests somewhere to the west, in France, or the south, in Italy. There is as much volatility in those who do the observing as in the object they observe. But the object is clearly volatile.
The Real picture behind Scandal:
US Environmental Agency (EPA) stated that since 2009, Volkswagen had been installing an illegal sophisticated software algorithm, dubbed as “defeat device”, to cheat emission tests. While full details of how it worked are yet to be ascertained, the software could sense test scenarios by monitoring speed, engine operation, air pressure and even the position of the steering wheel.
During controlled laboratory conditions in which cars are put on a stationary test rig, the device appears to have put the vehicle into a sort of safety mode in which the engine ran below normal power and performance.
Nitrogen oxide emissions lead to formation of smog in the atmosphere which is responsible for increased asthma attacks and other respiratory illnesses.
Loss to Suppliers:
A key supplier said the German multinational company may now have to come out with "offers" to customers to buy its products and it may, in turn, try to squeeze its suppliers to offset the "additional cost".
A top executive of another company said German politicians are "really upset" by the scandal and potential damage it could cause to image of Germany as a bastion of engineering prowess.
Volkswagen AG has admitted using an engine device to cheat on diesel car emissions tests. It has said up to 11 million vehicles worldwide were fitted with the cheating device.
Merkel: VW scandal won't damage Germany's reputation
The Volkswagen emissions scandal was a "dramatic event" but would not inflict lasting damage on Germany's reputation, Angela Merkel has said.
The German chancellor said on Sunday that the car maker now needed to provide the "necessary transparency".
"But I think the reputation of German industry... is not so shaken that we are no longer considered a good place to do business."
Action Against Volkswagen:
Since Volkswagen stands accused of breaching the Clean Air Act, the EPA can impose a maximum fine of $ 37,500 per vehicle. Moreover, the Department of Justice is contemplating criminal charges.
** For any concerned US car owners, the models expected to be recalled include: The 2009-2015 VW Beetle 2.0L TDI; 2009-2015 VW Golf 2.0L TDI; 2009-2015 VW Jetta 2.0L TDI; 2009-2015 Audi A3 2.0L TDI; and 2014-2015 VW Passat 2.0L TDI.
Engineers' admission:
Several VW engineers had admitted to installing the defeat devices in the company's vehicles, according to another German newspaper report.
Bild am Sonntag reported that the employees had told the company's internal investigation they installed the software in 2008, but did not reveal their identities or say how many were involved.
The engineers said the EA 189 engine, developed by VW in 2005, could not have complied with pollution regulations and cost targets without the deception.
Other Issues:
At present, the software is protected under the 1998 Digital Millennium Copyright Act which makes it illegal to fiddle with the software. The rationale is to prevent the consumers to tamper with emission controls. The flip-side is that it becomes difficult for independent researchers to scrutinize the code to identify problems. Automaker and EPA have resisted the proposals by experts to make exemptions from this Act to enable researchers to evaluate the engines.
European regulators are planning to conduct road tests in addition to laboratory tests from 2017.
This is just the tip of the iceberg and we have to wait and watch which course the Volkswagen, the law-firms, the EPA, and other testing agencies take.
The scam has tripped more than 40 per cent off Volkswagen's market capitalisation. But it has vowed to get to the bottom of the scandal with an internal probe
In Germany, however, there is not a lot of cross-sector flexibility. Car engineers will not retrain to work in the biotech industry, or – heaven forbid – in the services sector. Germany’s dependence on a few industries is one of the reasons why outside opinion of Germany has been so volatile.
It was very different 10 years ago. People spoke of Germany as the sick man of Europe. A few years later the same observers held up Germany as the example of a competitive economy. The baton of the sick man now rests somewhere to the west, in France, or the south, in Italy. There is as much volatility in those who do the observing as in the object they observe. But the object is clearly volatile.
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