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VW scandal and impact on German economy

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  #201 (permalink)
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skoa View Post
Fiat Chrysler and GM also started "voluntary update" programs after internal inquiries have found "irregularities".


While the measurement seams easy and straightforward, emission is emission, most of the complexity seems around creating unrealistic test situation, in order to produce low enough values..

Fiat Chrysler To Update Euro 6 Calibrations To Improve Emission Performance - NASDAQ.com

Probably this debate/situation could be avoided if the requirements and the testing were more real-live / realistic
capture the outlet of the car during 1000 km random drive, city + highway
that would be remove all the room for tweaking and cheating

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According Der Spiegel - Holland institute TNO is accusing Mercedes to have built in a device into
the C class Diesel motors to change NOX settings when outside temperatures fall underneath
10 degrees Celsius (means using more diesel - thus blowing more NOX out).
Holland wants to kill the licences for accused models...

Mercedes said this is invented to make the motor live longer!
Nothing said about damage to environment.

The happy story must go on...

GFIs1

German article:
Mercedes-Benz: C-Klasse unter Manipulationsverdacht - SPIEGEL ONLINE

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Seems everybody was aware of it..

VWs Winterkorn Told of Defeat Device Probe in 2014, Bild Says - Bloomberg Business

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According to The Spiegel and the german Manager Magazin from today
the US Michael Hausfeld who has already started collective complaints against
VW for US VW owners now starts the same for german VW owners.

Since VW in Germany restricts complaints and says it takes the car back
to make adjustments without any compensation, Hausfeld argues that the
car maker has fouled the legal labels showing the official NOx and CO
emissions of the involved diesel cars which differ by far from reality.

This case will open a collective complaint for up to 2,5 million german
car owners with involved models.

A total of several billion for german compensation is now newly on the
table. Hausfeld says that his bureau has enough margin to fight even
10 years against the german carmaker.

German article here:
Volkswagen: Deutsche VW-Opfer können auf Entschädigung hoffen - manager magazin

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After a bad recall plan the prosecutor of South Korea has started
a Razzia in the rooms of VW South Korea. Papers, Computers
and more were arrested today.
Goal is to get the mails exchanged with the mother company.

South Korean VW seat has already got a fine in the last month
of more than 10 million Euro. This time the costs might go up.

Article (german) here:
VW-Skandal: Ermittler durchsuchen Niederlassung in Südkorea - SPIEGEL ONLINE

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US Daimler client starts a collective complaint against Daimler because of fraudulent
emission on US Daimler cars.
The plaintiff is a well known US lawyer who has done other mass complaints for US citizens.

European car makers have to be on alert.

German article:
Daimler: US-Autobesitzer klagt gegen angeblichen Abgas-Schwindel - SPIEGEL ONLINE

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According to n-tv - news channel of Germany the prosecutors of California
deposed last evening a collective complaint from US VW clients against VW.
New in this case is that the plaintiffs want to get compensation from each
former and actual manager like Winterkorn, Müller or others as well as
from VW itself...
If such complaint succeeds then other US counties might follow and maybe
some other countries. This can ruin private responsibles of the company
as well as the company itself.
Some judges may bring in the "real threat" for VW with their judgements.

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GFIs1 View Post
According to n-tv - news channel of Germany the prosecutors of California
deposed last evening a collective complaint from US VW clients against VW.
New in this case is that the plaintiffs want to get compensation from each
former and actual manager like Winterkorn, Müller or others as well as
from VW itself...
If such complaint succeeds then other US counties might follow and maybe
some other countries. This can ruin private responsibles of the company
as well as the company itself.
Some judges may bring in the "real threat" for VW with their judgements.

GFIs1

Can company managers be personally liable in Germany?

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xplorer View Post
Can company managers be personally liable in Germany?

Yes for sure!
That is the reason why the company and the manager himself have some insurance concerning
their work.
But if the cause of failure was illegal then the insurance will not pay anyway.

Looks not bad to see some managers being fined. And paying back some compensation. Personally!
They were taking out more money out of the pockets of longtime company clients.
Plus immoral salaries over time...

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Yes for sure!
That is the reason why the company and the manager himself have some insurance concerning
their work.
But if the cause of failure was illegal then the insurance will not pay anyway.

Looks not bad to see some managers being fined. And paying back some compensation. Personally!
They were taking out more money out of the pockets of longtime company clients.
Plus immoral salaries over time...

GFIs1

Thanks GFIs1 - I agree, managers should definitely held accountable - I'm on the fence as to whether they should pay out of their own pocket.

It's probably something that would need to be assessed on a case by case basis. For example, if certain managers decided to explicitly defraud their customer base by falsifying emission checks they should pay.

But I see more of a gray area for other managers. For example there may be those that perhaps knew of the situation, they were personally against it, but did nothing to stop it.

I am also mindful of the fact that there may be managers that improved significantly aspects of their company and brought real value to their clients over many years, perhaps even decades, but then took a bad turn and maybe defrauded their clients over 1-2 years. In those cases I see difficulty in assessing burden, how does one split accountability?

I am not necessarily talking about VW here, but more in general. But clearly VW is a good catalyst for discussion.

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At the big car expo in Geneva a well known comedian installed at the VW presentation in front of many
cameras a new cheat box under the show car - which he pretended to have developed:

Genfer Autosalon: Komiker Simon Brodkin unterbricht VW-Präsentation - SPIEGEL ONLINE

Funny!
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According to some german news channels some very intriguing behaviour of VW came into light:
The company even installed new cheating software on self recalled cars AFTER US EPA warned
the management about the cheating software.

Here it comes:
The software developers made some adjustments in the new update 2014/15 to detect if
"the steering wheel" is turned while "driving". If so - the cheating software came in and
the dust went directly into the air. This because the dust filters were often full too early
and needed to be exchanged by VW....
!

!!

!!!


Unbelievable

Source (german) here:
Betrugssoftware offenbar noch 2015 erweitert: Software-Update - obwohl VW gewarnt war? | tagesschau.de

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Things are dense in time: the recall action has to start but
VW's negotiation with EPA has still not finished,
US CEO Horn has quit the company immediately,
the premium model Phaeton will run out by end of March
and no follow-up is in the pipeline...
US sales on the decline while Toyota sales are rising steeply.

The big question now is if VW might quit the US markets
as the US VW-dealers were travelling to the headquarter
to discuss the strategies.

Here some overview:
VW Toys With Giving Up the U.S. Mass Market, and Dealers Fume - Bloomberg Business

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Another chapter...

Ex-employee sues Volkswagen in U.S. over data deletion - German media | Reuters

I think this can cause criminal charges..
trying to cover up

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Volkswagen Sued for $3.7 Billion in Germany Over Diesel Scandal - Bloomberg Business

...the plaintiffs say this is just the beginning...

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These are not directly connected with the Diesel scandal - but hurt VW's and Porsche's reputation
and finances:

1) Recall of 177000 VW Passat (Models 2014 & 2015) because of a defect in a electrical connection which
causes motors to stop eventually.

2) Recall of 800000 models of VW Touareg and Porsche Cayenne built 2011 to 2016 with defect pedals.

Looks like the bad news don't stop. At least they now are coming to the surface.

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VW has aked for extra time/delay for the deliver of the repairplan

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rleplae View Post
VW has aked for extra time/delay for the deliver of the repairplan

From Bloomberg today:
"Volkswagen missed a court deadline on Thursday to present a plan to bring the cars into line with clean air rules, but Judge Charles Breyer at United States District Court in San Francisco gave the company an extension until April 21.

If no agreement is reached with the federal government, customers and dealers, a trial would be held this summer to determine what measures Volkswagen should be compelled to make and how much owners would be compensated."

In a video (Bloomberg too about the hearing" a specialist was speaking of a maximum fine of 4.6 billion for VW in USA
plus a sum up to 9.6 billion to take all cars in USA back...
The futurue compensation for the car owners is still not clear.

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Out of New York Times
a great article with graphics explains in details the VW Diesel Setup:

https://www.nytimes.com/interactive/2015/business/international/vw-diesel-emissions-scandal-explained.html

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New scandal in Japan:
Mitsubishi admits to have manipulated numbers of 625000 cars made for Japan.
The critical point is that many manipulated cars were made for Nissan.

The Mitsubishi stock fell more than 15% within hours and closed @ 733

Article (Bloomberg):
Mitsubishi Motors Admits Manipulating Fuel Economy Test Data - Bloomberg

One could not reveal this simple trick:
Overpressurized tires

GFIs1

This cheating story - and the thread also - never ends

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New scandal in Japan:
Mitsubishi admits to have manipulated numbers of 625000 cars made for Japan.
The critical point is that many manipulated cars were made for Nissan.

The Mitsubishi stock fell more than 15% within hours and closed @ 733

Article (Bloomberg):
Mitsubishi Motors Admits Manipulating Fuel Economy Test Data - Bloomberg

GFIs1

This cheating story - and the thread also - never ends

Is it too stereotypical of me to be disturbed by these news because I've always considered people like the Japanese and the Germans among the most trustworthy and reliable to do business with?

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Very true @xplorer

What if
"the Japanese and the Germans (were) among the most trustworthy and reliable to" reveal their cheating methods?

And
the rest of the world's car makers is cheating even more?

How comes that ALL those american gasoline thirsty heavy SUV cars pass any hefty US tests without problem?
Think about it!

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Haha - nice way of putting it @GFIs1

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Likely a settlement :

http://finance.yahoo.com/news/vw-resists-move-trial-instead-epa-settlement-101425133--finance.html

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more ...

VW Said to Pay At Least $10 Billion in U.S. Cheating Deal - Bloomberg

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@rleplae

What these articles did not reveal in numbers:
VW will pay every US owner of affected model a one time sum of $5000.
With the $500 they paid already as first "sign" (sigh!) they pay a sum of $5500
and will repair the car for free.

This is ONLY for USA!
The big number of cars are indeed to find in other countries - most of them
in central Europe. This means many more costs as they have to battle in
every country separately. Things are even worse as the normal procedure
of reparation has not really begun.

The BIG question:

If the total volume of damage exceeds already the liquid assets of VW -
WHY is the stock price rising today so harshly?

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GFIs1 View Post

The BIG question:

If the total volume of damage exceeds already the liquid assets of VW -
WHY is the stock price rising today so harshly?

GFIs1

Part of the rise is uncertainty that goes away as a settlement is coming..
but like you say, after that the market will realize how much more
unknown is out there and it will retank...

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GFIs1 View Post
The BIG question:[/B]
If the total volume of damage exceeds already the liquid assets of VW -
WHY is the stock price rising today so harshly?

GFIs1

Simple answer: Liquid assets are meaningless compared with creditworthiness,
i.e. the ability to generate liquidity. Otherwise most countries would have ceased
to exist long ago.

Plus: Compared with the market cap loss after the scandal, €2.5-3bn are chicken feed.
In other words: The sum is a positive surprise compared with what was priced in.

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Just to do the math by rule of thumb:

On 2015/9/18 the US EPA published the case.

The week of 2015/9/18 closed at €162.5, market cap around €87bn.
The panic low was at €86.36, market cap ~€45bn - i.e. calculatory costs of ~€42bn priced in (ceteris paribus).
At the moment, market cap is back at ~€67bn, which implies calculatory costs of ~€20bn overall (c.p.).

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I made the rule of thumb too:


choke35 View Post
Compared with the market cap loss after the scandal, €2.5-3bn are chicken feed.
In other words: The sum is a positive surprise compared with what was priced in.

This might become the main achilles problem:

The liquid assets that WERE in October 2015...
Some of that is burned with all the cases in work.
And some more with markets sells going down since inception of the news.
Plus - very important: the recall has not started or not finished in all affected countries.

If one calculates the costs that will occur first in EU + Switzerland and above the ones in Asia the final sum
will much higher for all the jurisdiction with fines...

That is all not priced in yet - instead the main circle of the board of directors in doing money flow into own..
you know.

If those final debts after this are summed up then some of the assets of VW group need to be sold on
best based offers.
Imagine what the first SELL of one of the companies will have impact on the stock market price

By THEN we know where the rest of the group will head to.

GFIs1

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During my years in the market I've learned to never mess with equity value.
If the market says a thing is worth €67bn today, who am I to know better?

Everything else is either past or forecast, which both don't earn me money.

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GFIs1 View Post
@rleplae

What these articles did not reveal in numbers:
VW will pay every US owner of affected model a one time sum of $5000.
With the $500 they paid already as first "sign" (sigh!) they pay a sum of $5500
and will repair the car for free.

This is ONLY for USA!
The big number of cars are indeed to find in other countries - most of them
in central Europe. This means many more costs as they have to battle in
every country separately. Things are even worse as the normal procedure
of reparation has not really begun.

The BIG question:

If the total volume of damage exceeds already the liquid assets of VW -
WHY is the stock price rising today so harshly?

GFIs1

I believe the US settlement announced today was that they would repair the car OR repurchase it.
"Kelley Blue Book, a research firm, has estimated the cost of buying back all the cars in the United States at $7 billion."
Apparently this is a much bigger issue in the US because
Many more European cars, over 10 million, are also affected by the Volkswagen cheating. But the company’s financial fines and any consumer liabilities in Europe are not expected to be nearly as high because of differences in air-quality regulations and consumer-protection laws.
Something to do with NOx vs SO2

choke35 View Post
Just to do the math by rule of thumb:

On 2015/9/18 the US EPA published the case.

The week of 2015/9/18 closed at €162.5, market cap around €87bn.
The panic low was at €86.36, market cap ~€45bn - i.e. calculatory costs of ~€42bn priced in (ceteris paribus).
At the moment, market cap is back at ~€67bn, which implies calculatory costs of ~€20bn overall (c.p.).

The New York Times below says
Volkswagen has set aside only 6.7 billion euros, or $7.6 billion, against the eventual global costs from the scandal.
and
Volkswagen faces a theoretical maximum government fine of $18 billion in the United States.
and
Analysts at the investment bank UBS had estimated the total cost of the scandal for Volkswagen at 38 billion euros, or about $43.1 billion, of which €14 billion was for expenses outside the United States.
https://www.nytimes.com/2016/04/22/business/international/volkswagen-emissions-settlement.html?_r=0

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I believe the US settlement announced today was that they would repair the car OR repurchase it.

Right - the repurchase is offered for all affected cars. That was confirmed yesterday.
The damage paid per car for a US consumer will be $1000 first time offer (not $500 I mentioned)
plus the $5000 now for every buyer - even the ones who had not taken profit from the first $1000
offer.
But was will be the total cost of all retaken cars? Where will they be moved / sold to?

Finally VW has set back for 2015 a sum of 16.4 billion Euro. That means the costs for US car owners without
the lawyer's costs, repair, reselling etc. costs are nearly covered.
Not to forget about the NON-sold affected cars that rest still in USA - those will sum up as well.

Now to Europe:
One german plaintiff VW car owner was rejected by a judge - he will not get any refund - only
a repair...
That might be ok after german jurisdiction. BUT: the repair NEEDs to be done within a short period after
the consumer complains. So far we know - VW has still not really started to repair the cars in Europe.
If they are too late with all stuff (10 million cars will need time) - the complaints might explode.
Means instead of having rebuilt confidence into the company - they will suffer by many many individual
complaints from every VW owner with affected cars in Europe. That will be even worse than US deal!

To resume - I would not count on "total costs at the lower end of the estimation" for the whole process.
Even worse - as now Mercedes Benz in in the light of US regulators...

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This thought may not be an actual contribution to the discussion, but as I was reading the recent posts I thought that we really can't know, right now, in advance, what the costs to VW (and potentially any other carmakers) will be, nor what they will end up being, other than something like "Real Bad."

This is kind of clear, but what "bad" will be is not really clear right now, no matter how interesting it is to speculate about it. (Sure, I'm interested too.)

Also, I asked myself if the many governments involved will really be willing to drive major manufacturers under....

Because:

1. All their workers vote.
2. All the people who would be impacted also vote. Since the impact could be on the large side to the German and European economy, that could be a lot of people who vote.
3. Governments know this.

Point 3 is not something to be ignored, in my view.

Also, it is not just a matter of governments pandering to economic interests or to voters who may be affected. (Not that either of these could not possibly happen. ) Governments also, quite responsibly, do care about the health of their country's economies, and they should.

So I do think that the likely impulse of governments to limit the damage, along with our present inability to know the future anyway, should give us pause while we try to figure out what the damage will be.

This is in addition to the fact that, yes, important rules were broken, and yes, someone has to pay for that or there will be no rules.

Bob.

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Because:

1. All their workers vote.
2. All the people who would be impacted also vote. Since the impact could be on the large side to the German and European economy, that could be a lot of people who vote.
3. Governments know this.

What the government(s) - I mean ALL - did NOT do:
They could have taken all cheating cars out of service since October last year.
No permission - no plate - no insurance.
Point.
They did not.
As they were told that the "repair" will start from January this year on every
affected car.
The red line in some countries (I am speaking here from my country too) has been
scratched. We do not have VW production here. Some Swiss companies are selling
products for VW models but this is not well known here anyway.
The first fact is that at some point VW loses now all confidence given from the governments
and suddenly the winds are turning.
Second fact is that European clients seem to be double cheated as US clients get a
guaranteed refund and the rest of VW clients do not have ANY money back or extra guarantee.
One can be sure that many longtime clients in Germany - no matter having a cheating
diesel or another VW - will never again want to be double cheated: they will simply buy
some other car.
That market-value should be considered by any investor of VW short- to longterm.

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VW is increasing provisions :

Volkswagen Raises Provisions for Emissions Scandal to $18.2 Billion - Bloomberg

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According to Spiegel.de German electronic company Bosch has sent manipulating
devices for more than 630000 cars in Europe.
The car makers Audi, Mercedes, Opel, Porsche and Volkswagen were clients for those.
Selling these special devices goes back many years.

Those affected cars need to be "repaired" as well in the very next time.

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Signs of progress..


Volkswagen gets approval for diesel cheat fix in Germany - Autoblog

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Former VW CEO Martin Winterkorn under investigation by German authorities | The Verge

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Ex-VW CEO Winterkorn investigated for market manipulation | Business | DW.COM | 20.06.2016

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Today the postponed general assembly of VW will be held.

As @rleplae mentions in last post - now two members of the board are under investigation
by the State of Germany.
This morning "Der Spiegel" published that ALL members of the board of VW are
under investigation. (Watch the timing....)

But anyway - the families Piëch and Porsche are holding the main part of the company.
Therefore the board members will be approved again....

Main question is: WHEN will the board really be cleaned out to protect the ship
(former No 1 car maker) from sinking.

Changing only from Diesel (core business of VW) to electrical cars (newcomer VW)
will take a decade. While not making money with actual cars (like in the past) anyway this can be a lethal
period for VW to come. As known the company has taken back all non sold new cars in US. (Where are
they NOW?)
All those future fines of many battles in according countries not yet calculated nor included.

Time will tell!
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After a Bloomberg article
VW will settle a 15 billion fine/compensation in California today - if the judge accepts.

This is the first of two tranches: only for the 2l cheating diesel VW vehicules sold in USA.

The next tranche for 85000 3l VW diesel sold in USA will come later.

Many juridic cases in other countries are still not finished.

300 stockholders of VW filed VW for 3 billion Euro in Germany.

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VW US : 15B$

VW US emissions settlement reported to cost $15bn - BBC News

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for the 2l models:

14,7 billion $ - judge said

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If European clients and from all other countries could profit the same as the US VW Diesel clients
from the first settlement (means ~10k per car) then VW needs another 43 billion dollars for the 2l models only.
But VW is "sure" that those clients will not see any money back

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According to german "Spiegel" Bosch under investigation by US authorities.
Bosch is delivering the software for VW and many other car makers. From
letters and mails out of the VW investigation they found the proof that
Bosch very well knows what their software is doing on diesel cars: cheating.
Volkmar Denner, CEO of Bosch is the responsible. Bosch may face a fine
from 100 million up to billions - depending on the outcome.

German article:
VW-Abgasskandal: Bosch gerät ins Visier der US-Kläger - SPIEGEL ONLINE

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European customers will not get the same settlement

Yahoo!

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European customers will not get the same settlement

Yahoo!

Very true!

BUT

There are 3 real threats for VW with their German clients right now:

1) Some clients are bundling complaints via Holland, France, Luxemburg right now
2) As nothing happend until now - 9 months after scandal started, no repair, no money back, no plan at all -
but big loss on resale worth of the cars, clients want to buy a new car mostly from other countries and let the
case making its way. At least many generation VW customers are fed up and let starve VW from now on.
3) MANY leasing companies in Germany have the full damage on shrinking worth of the VW diesel cars they
handled to German leasers. That means those leasing companies are writing big losses on the resale as their
clients do not have that problem along with the contracts made in the past. As a result the leasing companies
lose clients for a new lot for leasing, lose worth in bought cars and will maybe get out of the market as
liquidity is lessening faster than ever calculated.

That is VW's strategy for their home continent!

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From an article in Yahoo / Die Welt:



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From an article in Yahoo / Die Welt:

GFIs1




I would agree that the situation is not comparable: he is saying that he can get away with screwing the European customers, but not those in the US. Well, that's simple enough. Now I understand.

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From today all VW new to sell cars in South Corea are without any license.
Around 83 thousand cars of 80 VW models are taken out of the streets immediately.
A fine of 14.3 million $ is hitting VW in Germany.

Article:
https://www.theguardian.com/business/2016/aug/02/south-korea-halts-sale-of-80-volkswagen-models-over-emissions-scandal

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Small Bavaria (Bayern) in Germany is suing VW today: The region had invested into VW stocks
and lost 700 thousand € in their pension fund last september after knowing about the
diesel scandal and the tumbling stock price of VW stock.
Bavaria now wants this stock loss back from VW.
Of course the price for VW is not a real threat - BUT - others might follows this path...

MORE to come for sure
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Small Bavaria (Bayern) in Germany is suing VW today: The region had invested into VW stocks
and lost 700 thousand € in their pension fund last september after knowing about the
diesel scandal and the tumbling stock price of VW stock.
Bavaria now wants this stock loss back from VW.
Of course the price for VW is not a real threat - BUT - others might follows this path...

MORE to come for sure
GFIs1

....same today from Baden-Württemberg

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According to The Wallstreet journal VW faces a new fine of 1.5 billion $.

"U.S. prosecutors and Volkswagen AG are negotiating a settlement that could result in significant financial penalties after Justice Department officials found evidence of criminal wrongdoing in the car company’s diesel-emissions cheating, said people familiar with the matter."

Full article:
U.S. Said to Uncover Evidence of Criminal Acts in VW Probe - WSJ

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As two companies delivering parts for the Motor and parts for the seats stopped delivery
VW faces now a stop on 5 production sites and 20000 workers with no work...
A lawsuit with the 2 delivery companies against VW has stopped the relationship.

In extremis VW wants to enter the factory sites of the opponents to "fetch" themselves
the needed parts.

Article (german)
VW droht Kurzarbeit in Wolfsburg und Kassel wegen Streit mit Zulieferer - manager magazin

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As two companies delivering parts for the Motor and parts for the seats stopped delivery
VW faces now a stop on 5 production sites and 20000 workers with no work...

Interestingly VW has won a short fight today :
A german judge allows now that VW may "fetch those parts in the delivery production" themselves.

THIS means that IS the FIRST time to practice so in german industry

In fact - VW did cancel the contracts this year with both companies and still makes
pressure on them... - lets see what happens...

At least this is a clear view on how a "too big to fail" car maker operates.

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As California regulators pursued Volkswagen to get to the bottom of its emissions scandal in the spring and summer of 2015, engineers at the carmaker who knew about the cheating were in a state of panic.

A US legal filing unsealed on Friday shows a group of VW employees attempting to cover up the cheating as questions from the California Air Resources Board became more and more detailed.

On April 28 2015, an unnamed VW employee wrote: “We only just need a plausible explanation as to why the emissions are still high!!!”

On May 12, one employee wrote about the emissions discrepancies between test conditions and real-world conditions: “We need a story for the situation!"

The emails are quoted in an indictment, dated June 1, against James Liang, 62, a veteran Volkswagen engineer who spent 30 years with the company. On Friday he pleaded guilty to a conspiracy to defraud US customers and regulators.

Full article on FT

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As California regulators pursued Volkswagen to get to the bottom of its emissions scandal in the spring and summer of 2015, engineers at the carmaker who knew about the cheating were in a state of panic.

A US legal filing unsealed on Friday shows a group of VW employees attempting to cover up the cheating as questions from the California Air Resources Board became more and more detailed.

On April 28 2015, an unnamed VW employee wrote: “We only just need a plausible explanation as to why the emissions are still high!!!”

On May 12, one employee wrote about the emissions discrepancies between test conditions and real-world conditions: “We need a story for the situation!"

The emails are quoted in an indictment, dated June 1, against James Liang, 62, a veteran Volkswagen engineer who spent 30 years with the company. On Friday he pleaded guilty to a conspiracy to defraud US customers and regulators.

Full article on FT

On the way up everybody just wants a piece of the pie, facts don't matter. On the way down everybody needs a story. Sound familiar?

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The mayor of London has claimed Volkswagen should pay £2.5m for missed congestion charge payments following the emissions-rigging scandal.

Sadiq Khan said 80,000 VW engines fitted with "defeat devices" were registered in London.

The devices, which detect when an engine is being tested, changed performance to improve results.

VW, the biggest carmaker in the world, admitted about 11 million cars worldwide were fitted with the device.

Transport for London calculated the £2.5m figure from the number of owners of affected VW vehicles claiming a discount for which they were not entitled.

"If you don't ask you don't get. I'm a champion for clean air, I'm a champion for London," said Mr Khan.

"Londoners, in good faith, bought these vehicles. They weren't clean. We've lost revenues from the congestion charge, they've got a case to answer."

The cars affected include Audi A1 and A3, Skoda Fabia and Octavia, Seat Ibiza and Leon and VW's Golf and Polo vehicles.

In a statement to the Sunday Times, VW said: "Volkswagen products perform well in independent real-world emissions testing against new cars in general.

"It is therefore difficult to understand why our products might be singled out for pollution penalties."

The scandal was exposed last September when America's Environmental Protection Agency (EPA) found many VW cars with diesel engines being sold in the States had software that could detect when they were being tested, changing the performance accordingly to improve results.

The German car giant has since admitted cheating emissions tests in the US.



From BBC News

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VW announces today to no longer sell diesel cars in USA...

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VW announces today to no longer sell diesel cars in USA...

GFIs1

That's one way to fix the problem.

(They probably couldn't sell any, anyway, now.)

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VW announces today to no longer sell diesel cars in USA...

GFIs1

We can read now that Mercedes is copying VW's new strategy.
They announced to no longer send the new Diesel models to USA from now.

GFIs1

PS: VW does have still 2 customer classes owning a Diesel:
1st the one in USA that can give back the car and gets golden refunds
and
2nd the European and rest of the World customer that gets

.... NOTHING

What a shame for this poor cheating company!

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The European Union began legal action on Thursday against Germany, Britain and five other member states for failing to police emissions test cheating by carmakers after the Volkswagen (VOWG_p.DE) diesel scandal.

Amid mounting frustration in Brussels over what EU officials see as governments colluding with the powerful car industry, the European Commission is wielding its biggest available stick in an attempt to force nations to clamp down on diesel cars spewing health-harming nitrogen oxide (NOx) pollution.

German officials - who say EU law is poorly framed - had expected Brussels to stop short of confronting the EU's leading power and by far its biggest car manufacturer, at a time when the unity of the bloc is being challenged by eurosceptics and Britain's vote to leave.

Thursday's action is a sign that the EU executive, under pressure from the European Parliament, is keen to prove its worth to voters.

Germany, Britain, Spain and Luxembourg stand accused of failing to impose the kind of penalties Volkswagen has faced in the United States over its use of illegal "defeat device" software to mask real-world NOx emissions blamed for respiratory illnesses and early deaths.

Reacting to the announcement, German Transport Minister Alexander Dobrindt said: "Germany is the only European country to have implemented a comprehensive list of measures to prevent unauthorised use of defeat devices."

Britain enacted legislation to tackle emissions test manipulations in 2009, a spokesman for its transport ministry said. "The UK will be responding in the strongest possible terms (to the EU action)," he added.

Officials from Spain and Luxembourg could not be reached for comment.

The Commission also accuses Berlin and London of refusing to share the details of suspicious findings revealed by national investigations into the "dieselgate" scandal - without which it cannot carry out a supervisory role.

"This goes far beyond Volkswagen," said an EU source, adding that officials had more cases planned in a push to force cars spewing up to five times legal NOx limits off the road.

Thursday's notice is the first step in what is known as infringement procedures, allowing the EU to ensure the bloc's 28 nations abide by agreed EU-wide regulations. Member states have two months to respond.

If they fail to do so convincingly, the EU may take them to the EU court in Luxembourg.


Rest of the article on Reuters

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F.B.I. Arrests Volkswagen Executive on Conspiracy Charges in Emissions Scandal

https://www.nytimes.com/2017/01/09/business/volkswagen-diesel-emissions-investigation-settlement.html

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F.B.I. Arrests Volkswagen Executive on Conspiracy Charges in Emissions Scandal

https://www.nytimes.com/2017/01/09/business/volkswagen-diesel-emissions-investigation-settlement.html

Thanks for this word. It just gets stranger and stranger.

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Here's more on that VW executive that just got arrested by the FBI in Florida:

http://www.nytimes.com/2017/01/09/business/volkswagen-emissions-scandal-oliver-s...top-news&WT.nav=top-news

The article points out that it is not yet known why he was even in the US in the first place, with an outstanding warrant against him. I had wondered that, too. It strikes me as extremely dumb that he would take that chance, when he would have been safe (or relatively safe) if he had stayed in Europe.

Also, VW is apparently going to plead guilty and pay a huge fine to settle the case in the US, but the deal doesn't cover any individual employees, who will have to look out for themselves.

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It is getting more intense & people are being charged. https://www.nytimes.com/2017/01/13/business/volkswagen-diesel-emissions-executives.html?_r=1


Quoting 
So far, six men have been formally charged, accused of defrauding the United States and Volkswagen customers there, of violating the Clean Air Act and of committing wire fraud. A seventh has pleaded guilty to conspiring to defraud regulators and car owners.


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As we can read from different sources - this VW manager who was in USA for holiday reasons - faces a 169 years sentence.
And he wanted to leave the country paying a lumpy little commission

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Some news bring out the scandal of modern trucks operating in Eastern Europe on international
transport. According to information (coming out tonight on ZDF - German TV) from german sources
many truck companies operating in east European countries have software to put off "adblue" cleaning
while driving.
This results in 2 things:
1) less costs on adblue adding
2) paying less taxes for every truck as it operates in a "better" category.
Both were not detected by the western Europe countries where those foreign trucks were driving through as
those are crossing many countries as foreign trucks with foreign plates.

Everything is to find under the label "adblue killer"

one source (german):
Abgasskandal: Manipulierte LKW aus Osteuropa sorgen für massive Schäden - SPIEGEL ONLINE

Damages can be counted as double the emissions what on cheating VW diesel cars were detected.

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Today the German Police has started early this morning a razzia at the headquarter
of VW daughter AUDI. This is about the diesel scandal to arrest papers of the motor
manipulations with Audi in the past.
Prosecutors are from Munich.
Affected offices are in Ingolstadt and Neckarsulm.

edit 9:42
Some private apartments / houses of managers of Audi are also part of the razzia.
source: bild.de, n-tv.de and others
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German finance controller BaFin has started legal actions against the heads of VW and Porsche.
The case is about "market manipulation" where stock holders lost a lot of money.
All after announcing the diesel scandal of VW in September 2015.

The case has been opened by the BaFin at Stuttgart (Germany) and is against:
• Matthias Müller, CEO of VW
• Martin Winterkorn, former CEO of VW
• Hans-Dieter Pötsch, chairman of the VW board
• Philipp von Hagen, manager of VW daughter Porsche

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VW has accepted to pay to the 80 thousand owners of 3l diesel cars in USA a sum of
1.2 billion dollars in a comparison US judge Charles Breyer said yesterday.
The total payment in the dieselgate scandal in the USA has cost VW a sum above 24
billion dollars so far.

Bosch in the same case (3l) is willing to pay a sum of 327.5 million dollar.

Many cases in Europe are not yet solved.

GFIs1

sources: various news channels

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More than half a million VW are recalled in China to fix a
problem with the headlights.
Two models are affected: VW Golf and a chinese VW model.

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The US Department of Justice on Tuesday filed a civil lawsuit against the Italian-controlled Fiat Chrysler group over bypassing emissions tests in 104,000 vehicles since 2014.

Article:
https://global.handelsblatt.com/companies-markets/us-sets-eyes-on-fiat-chrysler-in-dieselgate-scandal-770987

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Yesterday 230 policemen and 23 prosecuting attorneys searched at many Daimler facilities in Germany to find evidence for cheating software in diesel cars...

More to come for sure.
Article (german):
Daimler: Ermittler durchsuchen mehrere Standorte

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In the USA GM is sued by clients after finding out that 700000 trucks are running
with manipulated software (defeat devices) causing more pollution than legal.
Affected are the heavy Pick-up-Trucks: Chevrolet Silverado and GMC Sierra Duramax
built between 2011 and 2016.

As a deliverer Bosch is again (like with VW, Audi etc.) involved and as such also sued.

A class action law suit in Detroit has been started by the well known lawyers of US office
Hagens Berman. This bureau has started such actions before against Volkswagen,
Mercedes-Benz and Fiat Chrysler.

The 700k US GM cars exceed the number of VW models (500k worldwide) by far.
VW had "only" 85000 US clients to fight again.
VW paid until now 24 billion US dollars as fines and to calm US clients.

Several sources.

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In english : "you can not trust every old lady, but every VW golf you can" ;-)

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Ministers from different EU countries discussed a plan to bring in rules for new cars
that are the valid and the same for all EU countries in the future.
This means a car that does not fulfill limits eg. for CO2 will get no admission.
Companies cheating further might be fined up to € 30'000 PER CAR.

The new plans need get through EU parliament first.

What impact will it have for German car makers?
• More controls before and while bringing in new cars in the market
• perhaps more problems for export - as the rules can be controlled from every importing country
• harsh fines eventually - from every importing country against the car maker
• Pricier development - thus higher price for the client
• etc.

Several sources (german) like
https://www.nzz.ch/mobilitaet/auto-mobil/abgas-richtlinien-eu-regelt-auto-zulassungen-neu-deutschland-bremst-ld.1298221

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After Stuttgart where during many weeks per year the air purity is awful
now Munich is planning a severe stop of diesel cars in the city.
That means all diesel cars not fulfilling at least Euro6 level are no longer
admitted on the Stuttgart and Munich streets.
By when this ban will be starting is not yet given.


GFIs1

PS: Many themes in german press about the dieselgate are on the plate.
A review about the new findings will be treated here in next posts.

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https://www.bloomberg.com/news/articles/2017-06-14/eu-says-vw-promises-extra-guarantee-for-diesel-car-owners

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Those five top ex managers of VW can no longer leave Germany - or they will be delivered to USA
for a trial.
A sixth member of the management is already waiting for his trial in USA since several months.

This may give some hope for german clients to get some refund - which still is denied by VW.

Article:
https://www.autonews.com/article/20170622/OEM02/170629914/interpol-seeks-five-ex-vw-managers-over-emissions-fraud-report-says

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I happen to live in Florida and used to own a VW. I remember continually getting the check engine light on my dashboard and taking my car in for servicing. They would run the scan and replace my intake manifolds O2 sensor every two or three months, all of this on the factory warranty. After a year and a half went by of going to the dealership and having my O2 sensor replaced every three or four months. The dealership finally came out and admitted that they had been replacing my sensor with one that fit my manifold but was ultimately designed for a different displacement engine. And "oh by the way your catalytic converter is shot, were going to have to replace that for emission standards, it's not under warranty either" I looked at the head mechanic and said "so you don't think your negligence in putting the wrong O2 sensor, which in turn determines the fuel mixture in my engine, had anything to do with my catalytic converter prematurely failing" I got on the phone and called their head office in Jacksonville. And after about a thirty minute conversation explaining to them the purpose an O2 sensor serves. To keep the fuel mixture at 14.7/1 at all times. And how by replacing my O2 sensor with one from a different displacement engine. More than three consecutive times. Would in fact destroy the catalytic converter. They agreed it was the dealerships negligence and offered to replace and repair anything on my car that needed attention for free and extended my warranty another 3 months. Well I figured I would need it since they were probably putting a Passat's catalytic converter on my golf anyway. It just makes me wonder how long this has been going on at VW. Because this incident I am referring to was over 5 years ago. And if I hadn't have had the little knowledge I do about combustion engines. I would have probably just paid for a new catalytic converter and went on my way.

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According to a German broadcaster - 3 clients of VW get a refund for the bought VW vehicle.

These are the first 3 cases where VW did not interfere but accepted.
Of course VW tells that those 3 cases are "exceptions" and shall not be an example for future
cases.

In fact some resistance in Germany seems broken versus the "golden" US refunds versus German
clients with diesel cars with same motors as US versions..

Looking forward now to a flood of European clients getting back money for this multiple illegal
and criminal disaster VW is pushing around the planet.

See also previous post of the 6 ex VW managers that are facing a fine of 160+ years in jail in USA.

Time well tell finally.

Article (sorry german):
Konzern spricht von "Ausnahme": VW zahlt doch an deutsche Dieselkunden - n-tv.de

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Thousands of VW clients that financed or leased a vehicle with "VW Financial Service"
have maybe the chance to give back the car and get a full refund. Even YEARS after
the contract start.
One VW client started a case in Berlin where the judge found highly probable that the
contract is faulty and the revocation limited to 14 days is not applicable. This means
the revocation time limit is off and any client with such contract might do it any time.
Means for any car from the VW group - not only diesel...

VW Financial Service offered to the client taking back the car, making a full refund and
want him to not making the case public.
A final decision from the court of Berlin will be seen in October.

Source ZDF WISO - tv channel of Germany

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Thousands of VW clients that financed or leased a vehicle with "VW Financial Service"
have maybe the chance to give back the car and get a full refund. Even YEARS after
the contract start.

The total sum of lending money @ VW Financial Services is
20 billion €....

Now we know

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According to many sources in Germany - the Daimler group (Mercedes) has produced
Diesel cars with illegal software similar to VW's. For the years 2008 to 2016 more than
ONE MILLION diesel with this software trick were sold to german clients only...

If a recall will be needed then a quite a large job will be at the horizon...

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Even the title of this thread is about VW - now the whole German car makers
are on the same slippery and steep road to nowhere.
All their goal was to make the Diesel a golden fact for car makers, clients, stock
holders, Germany etc.
But it is NOT the case because of

1) betrayal of (nearly) all German car makers with illegal software
2) lying all over about the facts - after other countries found out (US first with CARB)
3) paying fines only in the pressure countries but not to German clients as well
4) The car surveying TüV in Germany is bundled with the politics - doing no harm to the biggest local business
5) no responsibility by any management member of any German car maker:
6) thus no harsh fines - but more money in the manager's pocket
7) no exit case or even a plan for reparation: only TIME will heal the wounds... and the affected cars will disappear themselves
8) The biggest fault in this development is having NO ready model at hand with NEW TECHNOLOGIES (electrical etc.)
9) This is the end because:

THAT all will affect the German car industry for much longer than wanted. Means ten years from now. And only IF those
companies CAN survive the upcoming national and international processes.

Be aware when investing in those companies!

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It's not just the car manufacturers, our government based a whole decade's policy on the mistaken (scientific cockup) premise that diesel is cleaner.

Still, now that Volvo are going to save the planet we have nothing to worry about.

Cheers

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Very surprised that the GM & Daimler developments are not news in the US.

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THAT all will affect the German car industry for much longer than wanted. Means ten years from now. And only IF those
companies CAN survive the upcoming national and international processes.

Be aware when investing in those companies!
GFIs1


ratfink View Post
It's not just the car manufacturers, our government based a whole decade's policy on the mistaken (scientific cockup) premise that diesel is cleaner.

Still, now that Volvo are going to save the planet we have nothing to worry about.

Cheers


Ever since I can remember any of the cars I've been riding - gasoline, diesel, LPG, E, German or "foreign" -
consumed more than specified by their manufacturers. Friends, family, colleagues, acquaintances - all experienced
the same. Let's weed out some culprits. Great.

If people watch their cars (or bikes) consume x liters/gallons/kWhs of energy more than specified all the time:
Do they really expect a vehicle to pollute the environment only with the specified consumption then? Or does
anyone really believe zero emission chatter only because the major part of the pollution happens elsewhere?
(Esp. for such disciples I'd strongly advice a trip to the regions where the basic materials for their e.g. solar panels,
batteries, and/or fuel cells are mined and processed. Guilty: I'm also owning solar panels, batteries and a fuel cell.)

Imho the measurement methods were a joke, they are a joke - and presumably they will be a joke in the future.
And they are like that for a very good reason: Self-delusion. Or who of us would like to be a bloody polluter?
Who of us would like to be put in the pillory for his/her car/bike? Or for using a pickup instead of - if at all - the
smallest possible vehicle? Or for only regarding some numbers at the end of the pipe/socket instead of the whole
footprint of the vehicle?

A paradox or simply a phenomenon?
Human nature. We are the consumers.
But 99% of the time it's much more comfortable to shift the blame on our suppliers.

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choke35 View Post
A paradox or simply a phenomenon?
Human nature. We are the consumers.
But 99% of the time it's much more comfortable to shift the blame on our suppliers.

Very true and no different to trading rooms. Simple : Caveat Emptor.

Ironically I drive a 2ltr diesel Ford, it does 47mpg no matter how I drive it. Utterly brilliant for a large car.

Cheers

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choke35 View Post
Ever since I can remember any of the cars I've been riding - gasoline, diesel, LPG, E, German or "foreign" -
consumed more than specified by their manufacturers. Friends, family, colleagues, acquaintances - all experienced
the same.

https://www.edmunds.com/fuel-economy/heres-why-real-world-mpg-doesnt-match-epa-ratings.html

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Of course the German car makers are under pressure - concerning about the diesel problems in
the past 10 to 15 years as well as the very next months.
In the German press the diesel seems to be dead. But the car makers do not have any project ready
to work around.

Now the German politics is still not ready to make rules that count for the markets - the clients and
the already sold models that are not fulfilling given limits for pollution.

Where will the REAL pressure come from?

It is coming from the towns that will set temporary or all time ban of diesel cars in the respective city.
This is allowed in Germany as every town can regulate the traffic and ban cars that are off the rules.
With such individual city solutions - the diesel car owners will have big troubles. Even when they want
to drive through a city on the highway - like in Hamburg or Stuttgart.

For sure local limits and/or bans will be much more influencing than waiting for German elections in
September.

In any case the car makers are in a very weak position now!

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Your saying that in the "all-inclusive Europe" where the European court can and does force countries to do things that they don't want in the name of whats best for Europe, that individual cities will be able to ban specific cars?

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GFIs1 View Post
Where will the REAL pressure come from?[/B]
It is coming from the towns that will set temporary or all time ban of diesel cars in the respective city.
This is allowed in Germany as every town can regulate the traffic and ban cars that are off the rules.
With such individual city solutions - the diesel car owners will have big troubles. Even when they want
to drive through a city on the highway - like in Hamburg or Stuttgart.

For sure local limits and/or bans will be much more influencing than waiting for German elections in
September.

Funny thing is that these political shining lights always fiddle about with symptoms.

And if they have the choice between catering to city mob and fixing problems, their choice is pretty clear.
Thus the the next greenish senior teacher frenzy of activity, next mindless subventions, and the next bright
energy revolution are virtually guaranteed

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SMCJB View Post
Your saying that in the "all-inclusive Europe" where the European court can and does force countries to do things that they don't want in the name of whats best for Europe, that individual cities will be able to ban specific cars?

Yes. EU is making rules for both sides: car makers and pollution limits for cities.
So the cities are free to ban specific vehicules that do not fulfill certain limits. Thus banning Euro 4 or 5 vehicules
are already restricted in certain areas.

In Switzerland (you know - not EU member) certain regions are reducing speed limits severely on hot summer days
on highways to reduce pollution. The measure is high ozone markers. This is normality since several decades especially
in the southern parts of Switzerland.

Things like a diesel ban in German cities are on its way - independent of the measly "solutions" like software updates (sic!)
the car makers are offering to their clients. Environment and health for people and nature first.
Only with distinct pressure the car makers need to bring quickly all new technologies to proceed. Else: fail! That is
affecting every car making company in Germany right now to survive or not.

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According to several German sources - Daimler is to recall 3 million diesel cars
of Euro 5 and Euro 6 for a software update. This update should be done within 1 hour...
The whole repair cycle has a budget of 220 million. (!)

Conclusion:
The large betrayal of Daimler from 2008 to 2016 could have been omitted by a "better" software for 80 bucks?
HaHaHa...

If you buy a model of Mercedes you pay from 70k to 250k or more...
That software which is out of the box now would have cost NOTHING - when installed upfront.
But the happy Merc' clients are thankful to see a garage again for another hour to feel cured by their service.
From there Daimler hopes to have no longer troubles with the German TüV.
..and hopes that the towns will not ban their vehicules soon.

HaHaHa 2

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IFO Institute is speaking of a loss of over 600 thousand jobs in Germany if the
car makers will no longer produce diesel cars.

Of course a transition to new technology is evident and was not followed
with full force - even the scandals are already known very long - to be ready
with new proposals/technologies for clients worldwide.

As long as the "best car makers" in the world are not willing to take their
clients important enough - then this industry in Germany will go down
very fast and will have a big impact on the economy.

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choke35 View Post
Thus the the next greenish senior teacher frenzy of activity, next mindless subventions, and the next bright
energy revolution are virtually guaranteed


GFIs1 View Post
IFO Institute is speaking of a loss of over 600 thousand jobs in Germany if the
car makers will no longer produce diesel cars.

Since Ifo is part of Merkel's economical advisors you can safely assume that this is exactly the prelude
for the above-mentioned subvention party.

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According to "Sueddeutsche Zeitung"
EU industrial commissionar Elzbieta Bienkowska wrote an open letter to all EU countries.
She says that every diesel car with illegal software that is not "repaired" will be taken out
of traffic (losing admittance) by 2018. She says that without pressure the car makers are
playing with time. She also says that closing cities for dirty diesel should be coordinated
EU-wide.

Article (German):
Manipulierte VW-Diesel sollen von Straßen verschwinden - Auto & Mobil - Süddeutsche.de

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