What is accused Volkswagen?
The United States and the State of California have accused Friday the German manufacturer to have deliberately circumvented the rules in force in the fight against air pollution. The US Environmental Protection Agency (EPA) accuses the group of having diesel models equipped with VW and Audi, between 2009 and 2015, with software to bypass emission tests of some air pollutants.
This is the University of West Virginia who discovered the pot to the roses. Commissioned in spring 2014 to study alternative energy, the lab could reproduce in real traffic conditions, low forward by Volkswagen emissions. Alerted, the EPA then took over investigations with its Californian counterpart but until then the German group had denied the charges. Before finally being forced to recognize, given the evidence gathered by the authorities. Pyshki, the United States announced Monday afternoon that other manufacturers vehicles would be tested again.
Why such a heavy fine?
VW total risk a fine of $ 18 billion (€ 16 billion), or 37,500 dollars per vehicle that is not up to standard, according to pollution control law. This would be the highest fine ever administered by EPA. In November 2014, EPA had sanctioned South Korean Hyundai and Kia to a fine of $ 100 million for having underestimated the fuel consumption of their vehicles. Before that, in the 1990s, seven diesel engine manufacturers had to pay $ 1 billion for using tools deceiving pollution controls.
Other automakers were recently sanctioned in the United States, but for technical faults, not by the US Agency for Environmental Protection: Toyota last year was sentenced to a fine of $ 1.2 billion for a problem on its accelerators and General Motors received it, a fine of 900 million Thursday for hiding for ten years a defect on some models.
This intransigence EPA is in the offensive of the Obama administration in the fight against global warming. New objectives in the fight against emissions were set in the summer, especially for coal plants, but also automobile pollution. Clearly, this survey sounds like a warning for other manufacturers who might be tempted to circumvent the law.
will they be concerned Other manufacturers?
The competitors of the German manufacturer were quick to disassociate themselves from the case. Monday morning, the chief executive of Daimler, the parent company of Mercedes-Benz, felt that the matter did not concern him. “I have a vague idea of what is happening and I think we are not concerned” , said Dieter Zetsche. “But it is too early to say anything definitive about it. “ The group added in a statement it had no knowledge of an investigation to its US subsidiary. BMW also said not to be concerned by this case. But European manufacturers have been caught in the wake of VW stock market. Automobile Stoxx 600 index fell more than 4% on Monday
Monday, the United States nevertheless announced they extended their investigations to other automakers. “The federal agency of the US Environmental Protection (EPA) and CARB (California’s counterpart) began tests on vehicles already in use by other manufacturers products for the presence of possible deceptive software,” said said a spokesman for the EPA Monday.
For its part, the German government announced that they expect automakers provide it with all necessary information to determine whether the German data and European exhaust emissions could also have been distorted. South Korea will in turn control the emission levels of pollutants than three Volkswagen models. As for the European Commission, it said to be in contact with the German group and US regulators.
How was working this spyware?
The computer can be used for everything. It is a small “sophisticated algorithm” , according to the US Environmental Protection Agency (EPA), which has allowed Volkswagen to rig the results of emissions testing performed by the authorities American control. In practice, this software (very discreet) enables 100% of the car’s pollution control equipment only when it passes official controls. “Basically, these cars were equipped with software that cut the emission control mechanism in normal traffic, and activating if emission test” , has annoyed the EPA. “In a test, the steering wheel does not turn, the cover is open, indicates an OEM. phases such software can be quite set that recognizes “
Specifically, the” bride “software antipollution equipment of the car in its use every day – and the latter can thus roll on American roads, emitting for example a nitrogen oxide levels (NOx) almost 40 times higher than the standard. If Volkswagen admitted deception, the German group did not specify how the offending software. Hardly can we imagine that it could be triggered by GPS coordinates, or as a function of car use -. Performed laboratory tests to meet a specific course
According to a source close to Volkswagen cited by AFP, a possible decision on pollutant emissions control mechanism have been taken by the headquarters in Germany, and not by the relevant regional divisions.
How reacted Volkswagen?
The manufacturer has acknowledged the facts quickly and launched an external investigation on Sunday. “I personally regret deeply disappointed that we have the trust of our customers and the public” , said CEO Martin Winterkorn. He promised that the group would cooperate with the US for “establish the facts quickly and transparently” and would do “all to fully regain the trust that so many people [it] agreed “. A mission that will be difficult: on Monday morning, as the stock market fell sharply, eventually losing over 17% Monday evening, the biggest plunge in its history. The group will now have to recall almost 500,000 cars of different models (Audi A3, Jetta, Beetle, Golf and Passat) sold since 2008 in the United States. And asked its dealers to stop selling its four-cylinder diesel models of its VW and Audi brands in the United States.
And now, what will it happen for VW?
For now, the authorities US continuing their investigation in cooperation with Volkswagen and the fine is not yet confirmed. But the deal fell bad for Volkswagen, already affected by internal bickering for months. The subject will be well discussed by the 20 members of Friday’s supervisory board and could lead to the departure of CEO Martin Winterkorn, who headed the VW brand from 2007 to 2015, a period that covers the six years covered by US investigations .
Other fronts could open for the builder. The US Clean Air Act and provides for prison sentences for those responsible for false statements and rigging control measures … Moreover according to the American press a criminal investigation was opened by the US court. And a “class action” was filed by a law firm from the Federal Court of San Francisco. The complainants fear for the value to the argus their branded VW vehicles.
Finally, all this will weigh on the future of the group in the United States. Encouraged by the tightening of regulations, which requires manufacturers to produce fuel-efficient vehicles, VW had staked everything on diesel in the US, where these types of engines are uncommon. But his models are perceived as more expensive than the competition in a highly competitive environment. The group has already cease until further notice the sale of its diesel models in the US, which accounted for 23% of its total sales in August. A blow to the German, who was betting heavily on that country to take the world leader in automotive Toyota.
Its strategy to counter Toyota is even more undermined that the case began to expand in Asia. Tuesday morning, Seoul announced it would investigate three Volkswagen diesel models, before convening representatives of the German manufacturer at a meeting at the Ministry of the Environment.
What does such a fine for the group?
If the fine is finally applied, the amount would thus represent $ 18 billion (€ 16 billion), or 9% the annual turnover of the group in 2014! As for the fall of VW the stock exchange on Monday, it is equivalent to a loss of almost 17 billion euros of funding, which is more than the total capitalization of a group like Peugeot … Eventually, VW will also have face other costs. Vehicle recalls, stop sale in the United States, possible prosecution of vehicle owners, impact on future sales, etc.
The ‘hit list’ record fines
If the car is, for some months in the viewfinder of American justice, other sectors were heavily sanctioned administration in recent years. First, banks. After the crisis of “subprime”, they paid for the year 2013 alone, more than $ 50 billion to US authorities. The most affected were JPMorgan and Bank of America , who had to pay respectively 13 and 16.6 billion in 2013 and 2014 for mis-selling of mortgage loans.
Meanwhile, BNP Paribas was convicted last year for violating the embargo the United States with Sudan, Cuba and Iran. Amount: 9,000,000,000. Credit Suisse , he will have to pay 2.6 billion for helping practicing tax evasion
The field of health is also the target of fines. In 2009, the US Pfizer has agreed to pay 2.3 billion for fraudulent business practices. But the prize for the largest individual penalty amounts to BP , which pay compensation of 18.7 billion for the 2010 oil spill in the Gulf of Mexico.
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