Volkswagen leaders: misconduct, weak processes, tolerance for rule breaking led to diesel cheating

Volkswagen leaders: misconduct, weak processes, tolerance for rule breaking led to diesel cheating

Internal investigation finds automaker couldn't make small engines pass tests within the time and budget given.

December 14, 2015

Wolfsburg, Germany – Volkswagen officials have detailed some of their findings on what caused the company to cheat on U.S. emissions tests for diesel vehicles, saying that it simply couldn’t meet standards with the budgets it put in place.

Officials say the starting point was a strategic decision to launch a large-scale promotion of diesel vehicles in the United States in 2005. Initially, it proved impossible to have the EA 189 engine, by legal means, adhere to the stricter nitrogen oxide requirements in the United States within the required timeframe and budget.

This led to the incorporation of software that adjusted nitrogen oxide emission levels according to whether vehicles were on the road or being tested. Later, when an effective technical process was available to reduce NOx emissions, it was not employed to the full extent possible. On the contrary, the software in question allowed the exhaust gas treatment additive AdBlue to be injected in variable amounts such that the NOx values were particularly low when vehicles were in the test bay, but significantly higher when vehicles were on the road.

Chairman of VW’s supervisory board Hans Dieter Pötsch says, “No business transaction justifies overstepping legal and ethical bounds.”

Nine managers who may have been involved in the manipulations were suspended.

Pötsch adds, “I here and now guarantee that we will pursue our thorough investigation to its conclusion. I vouch for this personally, as does the entire Supervisory Board of Volkswagen AG.”

Technical solutions to make the engines compliant for customers in Europe have been devised, presented to the authorities, and positively evaluated by them. Due to far stricter nitrogen oxide limits in the U.S., it is a greater technical challenge to retrofit the vehicles such that all applicable emissions limits can be met with one and the same emissions strategy.

VW officials are cooperating closely with the U.S. Environmental Protection Agency (EPA) and the California Air Resources Board (CARB) to create a solution for North America.

VW’s investigation is being coordinated by a special committee of the supervisory board. Approximately 450 internal and external experts are involved in the investigations. External experts from U.S. law firm Jones Day is conducting a forensic investigation. In connection with its work, Jones Day is being provided with operational support by the audit firm Deloitte.

VW officials announced earlier that the investigation had not found widespread fraud in its CO2 emissions certifications, the European equivalent of fuel-economy standards. From an initial estimate of 800,000 vehicles thought to have understated emissions, company investigators found only 36,000. Nitrogen Oxide (NOx) was a different matter. The U.S. heavily regulates the smog-forming emission.

VW investigators have concluded that software-influenced NOx emissions behavior was due to three factors:

Volkswagen executives say future emissions tests will be evaluated externally and independently. In addition, randomly selected, real-life tests to assess emissions behavior on the road will be introduced.

Source: Volkswagen AG