Volkwagen : smoking guns

Roads-2-Roam was waiting for VW’s side of the scandal to make a call but some recent internal news leaks are very compelling against Volkswagen.

Two separate German ‘serious’ newspapers have identified sources that say VW knew about this many years ago but did nothing. They held out until they were busted recently.

Frankfurter Allgemeine Sonntagszeitung (What a name !) suggests that some VW technicians tried to blow the whistle in 2011.

The other newpaper, Bild am Sonntag, goes back even further with a letter from the supplier of the engine controller unit – Bosch – that warned VW back in 2007 not to use their software illegally.

Citing unidentified sources, Bild said Bosch had warned Volkswagen as early as 2007 that its software should only be used in company tests and not for normal driving.

Das Auto. Was ist passiert?

I’m afraid Volkswagen corporate management (Not sure we will feed the unrelated part of VW AG), it is time to feed you to the lions.

Just a sweet Volkswagen from Transmissional dieselania

Trajan has been keeping us up to date with the VW scandal and at the Emperor’s meeting, he briefed us about Matthias Mueller talking over as CEO where he show us a picture of the new guy.

Jeez, within 2 seconds, Cleopatra wanted his number, if he was available but anyhow back to the topic.

The new CEO of Volkswagen :Matthias Mueller who is obviously muelling things over.

When I first saw the picture, I was thinking where have I seen him before?

The fact that he was head of Porsche didn’t mean a thing. Then it hit me. 

He is “Rocky” from the Rocky horror show – What a perfect analogy!

Not only that, but we have Susan Saradon singing this song that is so VW emission appropriate. All together now: “..Toucha toucha toucha toucha me, I want to be dirty..”

Nero.

Now is the Winterkorn of our discontent

The front page of the Economist 23rd October edition

The repercussions of the Volkswagen emissions gets worse by the day. For those not following it:-

• The CEO, Martin Winterkorn, has resigned just as he was about  to renew his contract for 2 years. He was known as “Mr Quality”. More executives are likely to resign or be fired. The big question remaining is who knew and who sanctioned it.
• VW Stock market value has plummeted where it has lost 1/3rd of it value in just two days: ~$30B. Expect the stock to go much lower. You’d be foolish to buy with this amount of uncertainty.
• VW has said that European diesel cars have same software to fool the test.  In terms of impact, Europe has around 11 million out there compared to 1/2 million in the US.
• The talk remains about criminal charges. US Department of Justice, the EU and Germany prosecutors area all looking into it. Japan and India as also waking up.
• As predicted,  law firms have started to file class actions lawsuites under the rational that the consumers were duped. Some are also using for the ’emotional distress’ angle. The used car value of Volkwagen diesel cars is a big unknown. Who would want them?
• There is also likely going to a political fallout in Germany where it is being said that German Government knew about this back in July. VW, whose HQ is in Wolfsburg, are big political players in Germany due to the number of people they employ. The Volkwagon group that includes Porche and Skoda, were gunning for Toyota to be the biggest car manufacturer in the world.
• The regulators themselves are also coming under scrutiny. Many are asking how they designed and blessed off on these tests and allow each car manufacturer to run the tests themselves. It took a presure group and University in West Virginia to identify this. Regulators (Federal, Californian/ EU) were oblivious.
• The scandal is dragging BMW into the mess where it is also being reported that while it passed the ICCT test that busted VW, it’s cars are not as clean as their marketing is claiming.
• Knock on  business effects are also being seen areas from the commodity price for platinum which is used as a catalytic converter to reduce emissions, to the weakening of the Euro.

While Volkswagen has set aside reserves for the US fine, the overall consequential damages may bankrupt them. Even if it doesn’t initially, the brand is trashed.  It looks as if we are seeing the death knoll of “Clean Diesel” for VW as well as other players.  Emissions standards are going to get tighter and performance will drop off. Thus even if they survive, the demand for the product may not be there as people paid a premium for their diesel cars.

There is no good news whatever way you look at it.

• See also : “Dirty Secrets” opinion by The Economist.
• Sept 26: Added a link to FT primer on the issue.

Songs for Volkswagon

Augustus asked me to try and cheer all you Volkswagon owners out there who are fegickt over by the diesel cheating scandal. How about this compilation of Volksmusik relating to emission scandal:

• Whose sorry now : Connie Francis
• It wasn’t me: Shaggy
• I’m busted : Ray Charles
• Puff the magic dragon : Peter, Paul and Mary
• Lying Eyes : The Eagles
• Evil ways : Sanata
• Purple Haze : Jimmy Hendix
• All I need is the air that I breathe : The Hollies
• Blowing in the wind : Bob Dylan

And last but not least..

• Smoking : Boston

Take it away !

Whose Exhaustive research determined VW were blowing smoke?

Secret photographs show VW’s plans to pass new emissions target.

In a follow on to “He who smelt it, dealt it“, we found out a bit more on who it was that grassed up Volkswagon cheating in their emission testing on Diesal cars. It was an organization called “ICCT: The International Council of Clean Transportation”. From their website, the mission  statement is:

The International Council on Clean Transportation is an independent nonprofit organization founded to provide first-rate, unbiased research and technical and scientific analysis to environmental regulators. Our mission is to improve the environmental performance and energy efficiency of road, marine, and air transportation, in order to benefit public health and mitigate climate change.

Bloomberg explains the background to how ICCT busted ’em. Continue reading..

He who smelt it, dealt it.

An old German road sign that indicated “Verkehrsverbot bei Smog” (No traffic allowed in smog conditions).

Volkswagen appears to be in big trouble where it is being reported that they have installed ECU software on their diesel cars which apply full pollution controls only when they are running emissions testing. When actually running in real life, they are bypassed. The result is a car that has much more efficient gas mileage but at the expense of nitrogen oxide emissions which are up to x40 than ‘legal’ limits.

The Environmental Protection Agency (EPA) is calling them out for cheating and are referring to this a ‘defeat device’. The State of California is also piling on. If you look at comments on New York Times, a bastion of liberalism, many drivers of VW Diesel are very upset and while they are thankful for the per mileage improvement, they are aghast that their green image is more dirty grey. Continue reading..