We have seen successful car companies survive recall scandals time and time again, often coming out stronger than they went in. Society is different today. Society expects not only transparency but also honesty. In days gone by, a company was expected to be trustworthy because, well, because we all thought that ethics were part of running a business. That Leave it to Beaver mentality sometimes led to shady decisions on a corporate level that were based on numbers rather than individuals. If you sold a million cars and two people died because of a design flaw, you could call it an acceptable risk and sweep it under the carpet. In today’s society however, there is a higher level of accountability, which is becoming higher with every passing recall across the industry.
If sweeping things under the carpet is no longer acceptable, then deliberately breaking the rules and lying about it could just be a deal breaker.
Dieselgate in a nutshell: Volkswagen installed software in cars powered by their 2.0 Litre 4 cylinder diesel engine which allowed the vehicle to know when it was being tested and activate a “defeat device” which allowed the vehicle to emit less pollution in order to pass testing. This software was developed to cheat EPA testing.
Volkswagen deliberately broke the law in the United States and they lied to their customers. This was no sweeping under the carpet, VW officials chose to break the rules. They chose to mislead consumers.
By the numbers
- 11 Million vehicles globally
- 482,000 in the U.S. alone
- $19 Billion in potential fines in the U.S.
- 6.5 billion euros set aside by VW to pay fines – only half of the potential fines.
- 2009 to 2015 TDI Volkswagen Golf
- 2009 to 2015 TDI Volkswagen Jetta
- 2009 to 2015 TDI Volkswagen Beetle
- 2009 to 2015 TDI Audi A3
- 2014 to 2015 TDI Volkswagen Passat
How it was found
Independant German researchers saw that VW diesels performed well in testing, but on the road were polluting. According to Bloomberg, the researchers decided to check in the States, where regulations are more strict and more strictly enforced.
What they found was that while the vehicles tested passed lab tests with flying colours, they exceeded nitrous oxide limits on the road by as much as 35 percent. This disparity led to a full scale investigation by the EPA beginning in the Spring of 2014, which resulted in a recall for a software patch. It could not be confirmed that the patch was having an effect in the real world.
Volkswagen issued a stop sale of affected vehicles in the States a few days ago, a move which was mirrored by VW Canada this morning.
Our own experience
In January of 2013, I drove from Ontario to Daytona Beach, Florida to cover the Rolex 24 hours of Daytona in the 2o13 Passat TDI that you see above on Daytona Beach. As one might expect, the Passat proved to be roomy and perfectly comfortable for 20 plus hours on the road. What surprised my drive partner and I most was the incredible fuel economy. We had expected it to be good, but this was nuts.
On the way down, we kept to within about 10 mph of the speed limit for most of the drive and saw an indicated 5.9 L/100 KM on the trip computer. That was about what we expected. On the way home however, we really wanted to get home. There were sections of road where the limit was 75 mph. Traffic in those was moving about 85-95 mph. We often saw three digits. By the time we reached the Canadian border, the trip computer was showing an average speed above 130 km/h(about 80 mph) for the trip. Even at those elevated speeds, our trusty VW delivered an astonishing 6.6 l/100 KM for the trip.
So it is a good car, what is the problem?
Our own experience shows that the TDI Passat is a great road tripper and the loyalty of repeat VW buyers shows that the model line up are good cars on the whole. The cars themselves are not the problem.
Unlike many other recall issues, the cars have not caused injury or death. The problem goes deeper than that and might have longer lasting impact.
The problem is a lack of confidence.
Volkswagen broke environmental laws. They did it for years. They lied to their loyal customers.
The financial repercussions are going to be unprecedented. Initially they will have to deal with the fines which while large may be a drop in the bucket compared to what is coming. In the past two days alone, share prices have dropped so drastically that the company has lost an almost unbelievable $37 billion Cdn. Lawyers south of the border are already lining up to launch class action law suits. It is reasonable to expect that future sales will be affected.
There was an old strategy in racing that you would break the rules until you got caught in order to win and then dial it back just a bit so that you weren’t caught again. The auto industry has always been kinda like that, but that won’t fly in today’s society. There’s gonna be hell to pay for VW!
Over at Jalopnik, Patrick George does a great job of explaining some of the issues at hand.