April 27, 2017
The Aftermath of the Volkswagen Scandal: What Happened Next?
Volkswagen was once upon a time one of the most respected brands in the world. After all, ever since it first released its unique Beetle it has gained many fans all over the globe. But all that goodwill was thrown away when the Volkswagen scandal made headlines back in 2015. The aftershocks of that disaster can still be felt even today.
The Latest News
It has been more than a year since it was revealed that Volkswagen intentionally put in software that allowed its cars to cheat in emissions tests, and the repercussions from that act aren’t over just yet. Here are some of the developments that happened after the scandal broke out.
· In July 2016, Volkswagen agreed to a $14.7 billion settlement with US regulators. The deal called for $10 billion to be used for a buyback option, and owners of affected cars (except for the cars with the 3L V6 engine) could choose to receive the monetary value of the car before the news of the scandal became public, plus an extra $5,100. The $4.7 billion will be used for pollution mitigation efforts.
· Part of this deal involved a guilty plea for 3 felony charges. These charges were for obstruction of justice, conspiracy, and using false statements to introduce imported items into the US. This is the first time ever that VW has ever admitted to criminal wrongdoing in any court in the world.
· The 3L V6 exception was addressed more recently. This time, VW is required to repair at least 60,000 of the 80,000 affected V6 cars. For the remaining 20,000 cars, a buyback option will be offered. This deal is considered by experts as favorable for VW, because it could have required the company to buy back all the cars instead. This buyback option also offers less money than the buyback for the other 2-L cars.
· On March 30, 2017, VW agreed to a deal with attorney generals from 10 US states. The company will pay $157.45 million to settle environmental claims. . Part of this deal requires VW to launch at least 3 new EVs (at least 2 of them SUVs) in the 10 states by the year 2020.
· This deal follows the 2016 deal with 44 US states, in which VW agreed to fork out $603 million to settle the claims.
· So far, VW stands to pay out as much as $25 billion as a result of the scandal. The money covers settlements with car owners, federal environmental regulators, attorney generals from various states, and dealers affected by the scandal.
· The most recent news involves the fixes provided by Volkswagen for affected cars in the UK. At least 1.2 million cars were affected in the UK, and 540,000 of them have already received the VW fixes. Reports have surfaced, however, that some of the “fixed” cars have suddenly developed problems as a result of the new fix. More than 3,500 owners have reported problems such as sudden loss of power, poor fuel consumption, and strange rattling noises.
· The scandal resulted in the resignations of various VW executives. Included in the purge were high-ranking execs such as Martin Winterkorn (VW CEO) and Michael Horn (VW of America CEO).
What Was the Scandal About?
In 2015, the US EPA discovered that many of the Volkswagen cars sold in the US were actually unable to pass US emission standards. To compensate, VW executives installed a defeat device that enabled the car to sense when it was being put to an EPA test. The computer software was quite sophisticated, as it tracked engine operation, vehicle speed, air pressure, and even the steering wheel position.
If the program determined that the car was running in a test, the car went on safety mode. It was able to comply with US emission standards by going into safety mode and running below normal performance and power.
But for regular car trips, the software switched out of test mode, and the engines emitted pollutants that were astonishingly 40 times over the allowed US levels.
Eventually, VW admitted that this device wasn’t just used for VW and Audi cars in the US. More than 11 million VW cars all over the world had this software installed, and that included 8 million cars in Europe. VW has admitted the use of the program on VW models such as Passat, Golf, Beetle, and Jetta, along with the Audi A3. The EPA has also maintained that the software was also put in Porsche and other Audi cars as well.
The ripples caused by the scandal are still continuing, and the end is still not in sight. Because of the scandal, the reputation of German automotive engineering has been tarnished, and even the German economy may be affected. That’s a lot of damage due to just a single computer program.