Oliver Schmidt, who headed Volkswagen America’s regulatory compliance office from 2014 to March 2015, was arrested by the FBI last week. The charge was “conspiracy to defraud the United States.”
Schmidt’s alleged crime is overseeing the installation of equipment and software in 475,000 diesel cars sold in the U.S. with the specific intent of cheating on emissions tests. The objective was to make the cars appear to be cleaner-burning, from an emissions standpoint, than they actually were. In fact, the cars were typically emitting as much as 40 times the legally allowable level of pollutants.
In September 2015, the German automaker admitted it had equipped 11 million cars worldwide with this trickery. CEO Martin Winterkorn resigned at that time. Michael Horn, head of U.S. operation, departed soon after.
Subsequent investigations revealed that the company was aware of the potential for this type of emissions cheating as far back as 2006, as disclosed in a PowerPoint presentation given by a senior executive.
The scheme was discovered by a group of researchers at West Virginia University, who were working under a small grant from the nonprofit International Council on Clean Transportation to understand any discrepancies between test emission levels and the actual performance of diesel cars. WVU’s Center for Alternative Fuels, Engines and Emissions has extensive experience in vehicle emissions testing. Their, which were announced in 2014, were later corroborated by the EPA and the California Air Resources Board (CARB).
They found the cars were actually equipped with the devices required to curb emissions, though software bypasses that equipment except during emissions testing — making the car peppier and more fun to drive during normal operation.
VW has long courted youthful drivers with a sporty image. The company, which openly declared its ambition to become No. 1 in the world, was undoubtedly counting on that image to help get them there. But the fallout from the emissions scandal changed all that.
Volkswagen reported a 19 percent drop in profits back in May, though it still continues to make considerable profits from its Porsche and Audi brands. The company, which has agreed to either fix or buy back the affected cars, has set aside $20 billion to address the problem. Affected owners can find more information online.
It’s gratifying to know that, at a time when government and business increasingly seem to have their hands in each others’ pockets, that accountability is still possible.
That, however, did not stop the shenanigans. Just days after Schmidt’s arrest, news broke that the EPA and CARB accused Fiat-Chrysler of a similar emissions-cheating scheme on over 100,000 diesel-equipped SUVs.
This, like VW’s infractions, is in violation of the Clean Air Act which regulates nitrogen oxides as one of several criteria pollutants. In question are the Jeep Grand Cherokee and Dodge Ram 1500 models with 3.0-liter engines made during the years 2014 through 2016. Model year 2017 vehicles have not yet been evaluated.
Inspectors found unreported software in the vehicles that switches emissions circuits on during inspection and off during regular operation.
In a press release, Fiat-Chrysler Automobiles said it was “disappointed” by the violation notice and that the company “looks forward to the opportunity to meet with the EPA’s enforcement division and representatives of the new administration to demonstrate that FCA U.S.’s emissions control strategies are properly justified and thus are not ‘defeat devices’ under applicable regulation and to resolve this matter expeditiously.”
The message suggests that FCA is hoping Donald Trump’s business-first administration will be willing to overlook such infractions in the name of economic growth. It’s frightening to think, but who isn’t wondering whether these companies could have skirted responsibility for their activities if they weren’t caught until after Trump took office? Those of us that plan to breathe the air can only hope those who think so are wrong.
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