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Here’s what Volkswagen did and how they gotcaughtBEN MOSHINSKY (HTTP://WWW.BUSINESSINSIDER.SG/AUTHOR/BEN-MOSHINSKY/)FINANCE (HTTP://WWW.BUSINESSINSIDER.SG/CLUSTERSTOCK/)

(/HERES-WHAT-VOLKSWAGEN-DID-AND-HOW-THEY-GOT-CAUGHT-2015-9/#COMMENT-) SEP. 23, 2015, 8:15 PM�

Volkswagen Chief Executive Winterkorn speaks at Porscheduring the annual meeting in Stuttgard

Volkswagen is facing huge fines, its reputation in tatters and a CEO on the edge.(http://uk.businessinsider.com/report-volkswagen-ceo-is-out-2015-9)

The company cheated US diesel emissions tests for seven years.

It did so through a clever piece of software that could identify when it was beingtested and reduce harmful exhaust so it looked like the cars met requirements,when in fact they didn’t.

Volkswagen was caught out by independent testing carried out by a clean-airadvocacy group, called the International Council on Clean Transportation(http://www.theicct.org/about-icct), which tested the cars themselves because theythought they were such a great example of how diesel can be a clean fuel.

Here’s a rundown on what happened and when.

In 2008, tougher emissions rules come in to force.

Most car manufacturers use a urea-injection system, often called AdBlue, whichuses a chemical catalyst to make sure unburnt fuel doesn’t get into the exhaust.

But VW says it can meet the regulation without the AdBlue system on many of itscars.

In 2013, the International Council on Clean Transportation teams up with WestVirginia University for a study on the Volkswagen diesel cars.

“We had no cause for suspicion,” John German, from the ICCT, said in aninterview with Bloomberg (http://www.bloomberg.com/news/articles/2015-09-19/volkswagen-emissions-cheating-found-by-curious-clean-air-group). “Wethought the vehicles would be clean.”

The study tests three cars in real-world conditions — a 2012 VW Jetta, a 2013 VWPassat and a BMW X5 SUV, under both laboratory and road conditions, findinghuge differences in the amount of harmful emissions.

The group tests one on nearly 4,000 kilometres of highway drivingbetween California and Washington State. 

The tests find that the Volkswagen Jetta exceeds nitrous oxide caps by 15 to 35times, with the Passat exceeding emissions caps by 5 to 20 times.

Meanwhile the BMW met all the standards under normal driving conditions.

The two groups alert the California Air Resources Board and EnvironmentalProtection Agency in 2014.

The EPA and CARB put the findings to Volkswagen.

The company disputes the test results “citing various technical issues” butimplement a voluntary recall of nearly 500,000 cars in December 2014 to put in asoftware patch they claim will fix the issue.

It doesn’t and CARB and the EPA keep pushing to find out why the cars’ own

diagnostics systems don’t register the high emissions under test conditions.

Volkswagen says the study is flawed, blaming “various technical issues” for theresults.

Volkswagen dispute the test results but implement a voluntary recall of nearly500,000 TDI cars in December 2014 to put in a software patch they claim will fixthe issue.

It doesn’t and CARB and the EPA keep pushing to find out why the cars’ owndiagnostics systems don’t register the high emissions under test conditions.

  

The tests find the root cause of how Volkswagen got its cars to pass the tests –discovering the software called “the switch.”

The switch is clever. It tracks the position of the steering wheel, vehicle speed, howlong the engine is on and barometric pressure.(http://www3.epa.gov/otaq/cert/documents/vw-nov-caa-09-18-15.pdf) If theseinputs match the ones commonly found in vehicle testing, the software cut harmfulemissions to pass the exam. 

If it sensed that the car was being driven on a road rather than in a lab, it switchedto a separate callibration which turned off the exhaust controls.

People have speculated this was done to keep the cost of the cars down, tricking thetesters into thinking they were fine without the AdBlue systems used by other

manufacturers.

Volkswagen finally admits the scheme on September 3 to the EPA and CARB.

The company was confronted by the authorities with evidence of the softwarescam. Running out of excuses, the company admits to gaming the tests.

On September 18, the EPA go public with the findings of their Volkswagen tests.

“Using a defeat device in cars to evade clean air standards is illegal and a threat to

public health,” says assistant administrator for the Office of Enforcement and

Compliance Assurance Cynthia Giles.

The fine could be as high as $37,500 per vehicle for the violations, a total of more

than $18 billion ((£11.8 billion). The U.S. Justice Department and German

authorities also begin investigations.

When markets open on the following Monday, Volkswagen stock plunges morethan 20%

Volkswagen experiences its biggest one-day drop in six years as the potentially

huge fine spooks investors.

CEO Martin Winterkorn releases an apology, saying “I personally am deeply sorry

that we have broken the trust of our customers and the public.” 

On September 22, Volkswagen admits the emissions scam is far more

widespread, saying it could affect 11 million cars.

Once again, the shares go into meltdown and another 20% is wiped off the value of

the company. 

Volkswagen issued a profit warning

(http://www.volkswagenag.com/content/vwcorp/info_center/en/news/2015/09/Ad_hoc_US.html)

setting aside €6.5 billion (£4.7 billion) to “cover the necessary service measures

and other efforts to win back the trust of our customers.” They add: “discrepancies

relate to vehicles with Type EA 189 engines, involving some eleven million vehicles

worldwide.”

Volkswagen CEO Martin Winterkorn appears in a video saying he’s staying at the

company, after German press reports state his last day is September 25.

The statement comes after Tagesspiegel reports that Winterkorn was going, and to

be replaced by Porsche CEO Matthias Muller. 

The Tagesspiegel report cites sources close to the company’s 20-person supervisory

board, which is having crunch talks this week on how to respond to the scandal.

367

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