VW may see as much as $18 billion in fines from the EPA.
Apparently VW had installed “defeat devices” into its diesel vehicles which were able to recognize when a vehicle was being tested for emissions. When the diagnostics were run for emissions the vehicles then adjusted their engines to emit lower levels of pollutants than normal. Once back on the road the vehicles reverted to standard mode and resumed higher levels of emissions – and performance.
The easy way to look at this story is to just say ” Well, there you go. A giant corporation cheating the regulatory agencies (and in some eyes the American people). See, capitalism is bad.”
But it’s not that simple. Volkswagen has long had state support in Germany (and I am sure in many other places. It is a massive company.) It was after all Hitler’s “people’s car,” volks – wagen. There also seems to be a leadership struggle underway at the company. The cheating news hit the wires right before the current CEO was to have his contract renewed. Whether the emissions story is a coincidence we don’t know. But the timing is interesting.
Also, consider if GM was caught cheating tests like this whether the EPA would have come after the company with threats of crippling fines. We bet not. Not unless the Dems want to lose Michigan and Ohio.
This is definitely one of those “lots of ins and outs and what-have-you” cases. As the Dude might say.
Volkswagen AG lost almost a quarter of its market value after it admitted to cheating on U.S. air pollution tests for years, putting pressure on Chief Executive Officer Martin Winterkorn to fix the damaged reputation of the world’s biggest carmaker.
The shares plunged as much as 23 percent to 125.40 euros in Frankfurt, extending the stock’s slump for the year to 31 percent. The drop wiped out about 15.6 billion euros ($17.6 billion) in value.