German Big 3 automakers emissions cheating disaster Master Thread

mmcartalk

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The first actual prison sentence has been handed down:

I won't doubt Liang's involvement in the issue (we're all responsible for our actions), but, given CEO Ferdinand Piech's notoriously dictatorial and heavy-handed style of management (i.e. ....giving orders to meet objectives in any way possible, legal or illegal), I suspect that not only Liang, but other Piech subordinates as well, were simply puppets carrying out Piech's agenda. I've posted in the past on Piech's style of management, and won't re-hash it again here....but how Piech himself has managed, so far, to avoid prosecution in this case beats me. :confused: No doubt, of course, he's got some good lawyers.

https://www.motor1.com/news/178064/vw-engineer-sentenced-over-dieselgate/

The first prison sentence has been handed down in the Volkswagen Dieselgate scandal, and if it’s a sign of what’s to come, things don’t bode well for guilty VW executives. The Detroit News reports that James Liang, VW’s former engineer who was at the forefront of the scandal, was sentenced to 40 months in prison and a $200,000 fine. For the record, prosecutors were asking for a three-year sentence with a $20,000 fine. So yeah, ouch doesn’t quite cut it.
The decision was handed down by U.S. District Judge Sean Cox, and it appears he’s using Liang as an example of what not to do when your bosses assign a task that's slightly illegal. Liang was involved with creating the infamous software that allowed certain Volkswagen diesel models to detect when emissions testing was taking place, thus altering parameters to meet emission requirements only during testing. The rest of the time, the cars are believed to have emitted up to 40 times the legal limit of nitrogen oxide.

It’s not that Liang was just involved with developing the software. He was also the main person in contact with federal regulators on the situation, which began with him lying about the software. Liang's defense painted him as a remorseful man in a difficult position, basically just doing what he was told while trying to be a loyal worker. Prosecutors argued – successfully we might add – that Liang knew what was going on and had plenty of opportunity to protest or blow this whistle, but instead chose company over legality.

“You were an important and key player in a very serious crime,” Judge Cox reportedly said to Liang.

What does this mean for other VW executives awaiting their fate? Oliver Schmidt may want to get comfortable with an extended stay behind bars – the former head of Volkswagen’s environmental and engineering center in Michigan pled guilty earlier this month on two charges of conspiracy to defraud the federal government and violation of the Clean Air Act. He faces up to seven years in prison.
 
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mmcartalk

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This thread, BTW, is getting very large...one of the largest in Lexus Enthusiast. I wonder if it isn't time to close it and start a new one....especially with the prison sentences now starting. But the mods can decide that....for now, I just added the article onto the existing one.
 

IS-SV

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VAG owns largest fraud case in automotive history (and now also LE largest thread of this type). Unfortunately the self-inflicted crisis is not over as of today, with pending shareholder lawsuits. The $30 billion price tag for their actions will be exceeded if it's not already. The heavily advertised TDI "clean diesel" just becomes an exhibit of false advertising.

The corrupt relationship of European automakers and governments can be seen/smelled today, as big European cities full of diesel passenger vehicles live with severe air pollution and related heath problems. No surprise passenger car diesel market share in Europe is now declining.
 

mmcartalk

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Duplicate VINs? That's nuts.

Yeah, something like that is so weird that it's hard to imagine that even somebody like Peich would order it....it would accomplish little if anything. I tend to believe (or want to believe) that something that outlandish must have come from an unforeseen computer/data-base screw-up....and that it was not intentional.
 

mmcartalk

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I bumped up this old thread to add another fine/prison term in this (seemingly) never-ending scandal. Oliver Schmidt, who was Chief of VW Engineering in the U.S., got 7 years and a 400K fine.

https://www.nytimes.com/2017/12/06/business/oliver-schmidt-volkswagen.html

DETROIT — A top Volkswagen official in the United States was sentenced on Wednesday to seven years in prison for his role in the German automaker’s decade-long scheme to cheat on diesel emissions tests.

The sentencing of Oliver Schmidt, a former Volkswagen manager in Michigan, was the latest turn in a vast scandal that has tarnished the company’s reputation and has cost the carmaker more than $20 billion in fines and settlements.

The sentence, including a fine of $400,000, was imposed by Judge Sean F. Cox in Federal District Court in Detroit four months after Mr. Schmidt, 48, pleaded guilty to conspiracy to defraud the federal government and to violating the Clean Air Act. The sentence was in line with the prosecution’s recommendation.

Mr. Schmidt, a citizen of Germany, is the highest-ranking Volkswagen employee to be convicted in the scheme in the United States. His case underscores the Justice Department’s commitment to indicting and prosecuting participants in the company’s efforts to rig pollution tests on hundreds of thousands of diesel vehicles imported for sale in the American market.

But most of those suspected of conspiring to defraud United States regulators are out of reach of American justice in Germany, which normally does not extradite its own citizens. Mr. Schmidt may turn out to suffer the harshest punishment for the emissions fraud even though he was hardly the only participant or the highest ranking.



Mr. Schmidt’s arrest in January, more than a year after the scandal erupted, was something of a fluke. Having been transferred back to Germany, he came to the United States for a vacation with his wife and was seized as he waited for a departing flight in Miami. Why he risked arrest by traveling to the United States remains a mystery.

Mr. Schmidt had been a Volkswagen employee since 1997 and was named general manager of the company’s engineering and environmental office in Auburn Hills, Mich., in 2013. He was responsible for the automaker’s relations with the federal and California regulatory agencies that initially pursued the emissions-cheating case.

Before imposing the sentence, Judge Cox admonished Mr. Schmidt for his actions and described him as a crucial figure in a wide-ranging plot. “You are a key conspirator responsible for the cover-up in the United States of a massive fraud perpetuated on the American consumer,” the judge said at the end of the nearly two-hour hearing.

Prosecutors asserted that Mr. Schmidt had provided false information to federal agents after the Environmental Protection Agency uncovered the “defeat devices” that Volkswagen used to circumvent pollution rules.

Judge Cox said Mr. Schmidt’s effort to conceal the existence of the devices from regulators was hardly an isolated mistake. “You viewed the cover-up as an opportunity to shine and climb up the corporate ladder,” the judge said.

Mr. Schmidt has played down his role in the development of the devices and in the company’s efforts to cover up its actions.

In his comments to the judge, Mr. Schmidt — his wrists shackled and wearing a red prison jumpsuit and black-rimmed reading glasses — said he accepted responsibility for his wrongdoing. “I only have to blame myself,” he said in German-accented English. “I made bad decisions, and for that I am sorry.”

Mr. Schmidt had sought to limit his sentence to 40 months in prison and a $100,000 fine.

In a letter to the judge before the sentencing, Mr. Schmidt said his loyalty to Volkswagen had led him to be “misused by my own company.” He cited a meeting in 2015 with a senior official at the California Air Resources Board at which he concealed the existence of software that allowed Volkswagen to cheat on emission tests.

“A script, or talking points, I was directed to follow for that meeting was approved by management level supervisors at VW, including a high-ranking in-house lawyer, ” he said in the letter. “Regrettably, I agreed to follow it.”

Mr. Schmidt did not identify any Volkswagen superiors who might have pressured him to lie to regulators.

Volkswagen moved to put the scandal behind it in the United States by agreeing this year to plead guilty to felony charges of illegally importing nearly 600,000 vehicles equipped with devices to circumvent emissions standards. It paid $4.3 billion in penalties and was put on probation for three years, with a monitor overseeing its compliance with ethics and regulatory measures.

Other than Mr. Schmidt, only a company engineer, James Liang, has been sentenced in the United States in the matter, receiving a 40-month term in August after pleading guilty to conspiring to defraud the government and violating the Clean Air Act.

Another figure in the American investigation, Zaccheo Pamio, an executive in the company’s Audi division, was arrested in Germany in July. As an Italian citizen, he faces possible extradition — unlike five other executives indicted in the United States, all Germans based in their home country.
 

IS-SV

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^ We actually had an idea long ago in US, the corrupt relationship of European automakers and government has been reported in our media (via Google for example) over last year.
 

isanatori

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^ We actually had an idea long ago in US, the corrupt relationship of European automakers and government has been reported in our media (via Google for example) over last year.
Well, my bad. I assumed wrong, because of the title of this thread. Thank you for correcting me.
 

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The German/European automakers know of the possibility of a diesel ban in several major cities, and with that would be a very negative impact on diesel passenger car residual values.
 

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Heard on the news today that the scandal has cost VW roughly 31 BILLION USD so far, and still counting. Many lawsuits against VW have yet to start for example. Also it was mentioned on the news (on TV) that some Australian auto mag/source tested in the real world one of the new engines replaced/recalibrated under recall, and it still failed emissions. Plus it had lower power and inferior fuel economy. VW is vehemently denying this and arguing against this Australian source.
 

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The exposure from VW's defrauded shareholders is still to be determined (billions $).
 
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isanatori

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Takada is also in deep **** over the airbag-defect issue...though probably not to the same extent as VW. Nevertheless, three of their executives have been criminally charged. Here is the story, and the official release from DOJ:

(In fact, I felt this was significant enough that I also started a new thread on it)

https://www.justice.gov/opa/pr/takata-corporation-agrees-plead-guilty-and-pay-1-billion-criminal-penalties-airbag-scheme
https://www.ft.com/content/a697e0de-3dfd-11e8-b7e0-52972418fec4

Takata was responsible for whatever bad happened and paid for it today. Takata died.

But all this mess affected Toyota and Honda too. Though once again the VW and the rest of the Germans remained untouched.
https://www.usatoday.com/story/money/cars/2018/01/18/14-automakers-list-more-models-takata-air-bag-recall/1044076001/

VW and the Germans used their big hand to deceive public opinion, mandating the EU officials accordingly and effectively delaying the implementation of strict car emission rules since the 90's.
They used humans and animals as guinea pigs inhaling diesel exhaust emissions They did it not for the sake of Science, rather for deceptively presenting that diesels without after treatment emission control tech were less harmful for humans!
Are you old enough to remember Jeremy Clarkson ridiculing prius 1 and finally claiming "Buy a Golf diesel. I swear you, it is more environmentally friendly than the prius" It was the episode with Billy Bob and his "gun"

VW and the Germans are assured that nobody can harm them, because they are gangsters. They are protected by the press and they are enjoying the EU asylum and traditionally exceptional Sino German relations.

People are getting killed by technology and nobody gives a damn. ZF Friedrichshafen, Autolive, Chinese are recalling deadly airbags. Everybody is advertising autonomous cars, yet it is a pipe dream,a nightmare for those who lose their life. Does anybody care?
Of course not.
 

mmcartalk

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Winterkorn is now the latest official to be formally charged in this endless affair.

https://www.autoblog.com/2018/05/03/ex-vw-ceo-martin-winterkorn-charged-diesel/

Ex-Volkswagen CEO Martin Winterkorn charged in U.S. over diesel scandal
He knew but continued ‘to perpetrate the fraud,’ indictment says

REUTERS

May 3rd 2018 at 4:24PM

WASHINGTON — Federal prosecutors in Detroit on Thursday unsealed charges against former Volkswagen Chief Executive Martin Winterkorn, accusing him of conspiring to mislead regulators about the German automaker's diesel emissions cheating.

Volkswagen did not immediately comment.

An indictment filed in secret in March was unsealed in U.S. District Court on the same day as Volkswagen's annual meeting in Germany. Winterkorn resigned soon after the scandal over polluting vehicles in the United States became public in September 2015.

U.S. Attorney General Jeff Sessions said in a statement that the charges show "Volkswagen's scheme to cheat its legal requirements went all the way to the top of the company."

Winterkorn is charged with conspiracy to defraud the United States, wire fraud and violating the Clean Air Act from at least May 2006 through November 2015 by using illicit software that allowed Volkswagen diesel vehicles to emit excess pollution without detection.

Volkswagen initially suggested that only lower level executives knew of the cheating. But the indictment alleges Winterkorn was informed of VW's diesel emissions cheating in May 2014 and in July 2015 and he agreed with other senior VW executives "to continue to perpetrate the fraud and deceive U.S. regulators," prosecutors said.

A spokeswoman for the U.S. Attorney's office in Detroit said Winterkorn was not in custody. In total, nine people have been charged and two have pleaded guilty in the case. One Italian citizen, a former Audi manager, is in Germany awaiting extradition.

Six of the former Volkswagen executives charged are in Germany and have avoided facing U.S. prosecutors because Germany typically does not extradite its citizens.

Reporting by David Shepardson
 

mmcartalk

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CYA largely committed from the top down, so much for weak attempt to blame a few rogue engineers.

I agree, but I still think it started with Ferdinand Piech, not necessarily Winterkorn. That is exactly the way that Piech used to manage, and the way he would bark out orders.........Get results no matter how you have to do it, what rules you bend, or what laws you break.
 
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