Yahoo Autos VW Reportedly Made a PowerPoint Presentation Outlining How to Cheat Emissions
Volkswagen originally blamed the existence of its diesel-cheating software on a small group of engineers, but new evidence suggests the scandal goes much deeper than that. The New York Times has discovered a PowerPoint presentation made by "a top technology executive at Volkswagen" in 2006 that outlined a way for the company to cheat U.S. emissions tests.
While there's certainly some humor in using a PowerPoint presentation to outline an illegal business strategy, this presentation also evidence of how far back the scandal goes. How widely distributed the presentation was is still unknown, but it's now clear that VW executives were involved and that the cheating was planned at least as far back as 10 years ago.
According to two anonymous sources, company executives were well-aware their diesel engines were not in compliance but chose several times not to improve the engines' emissions. Even in 2014 when regulators began looking more closely at diesel emissions, VW continued installing its emissions-cheating software on diesel cars for more than a year.
The resulting cars were able to pass U.S. emissions tests but when driven in the real world would release up to 40 times the nitrogen oxide legally allowed.
Now that the company has been forced to set aside $18 billion to cover the cost of the resulting scandal, executives are probably wishing they had accepted proposals to bring its diesel engines in compliance sooner.
Court documents show, however, that VW severely underestimated how expensive the fallout from the scandal would be. It reportedly expected fines to be more in line with Hyundai-Kia's 2014 penalty of $100 million. A similar fine would have been much easier for the company to handle.
Even when regulators started investigating VW's emissions issue, the company didn't think it would be a serious problem.
Former CEO Martin Winterkorn was given a two-page memo towards the end of 2014 that outlined the issues with the company's diesel vehicles, The Times reports. Hidden at the bottom of the second page was a short paragraph discussing a recall of 500,000 cheating diesels in the U.S. Unfortunately for the company, the recall didn't fix the issue.
But as pressure continued to build, the company still didn't appear concerned. In a July 2015 meeting about worldwide regulatory issues, the issue with U.S. diesel emissions was only given ten minutes of discussion despite the meeting lasting nearly two hours.
Even two months later when the company admitted to U.S. regulators that its diesel engines used software to cheat emissions tests, executives still appeared unworried.
While the company may not have been able to predict how strong the backlash would be, there's no doubt it's been severe. VW has may pay U.S. owners $5000 each in compensation for the scandal, totaling nearly $3 billion. It's also agreed to either repair or buy back the affected vehicles. The cost of the buyback could total an additional $7 billion.
And that's just in the U.S. Approximately 600,000 cars were affected in the States, but somewhere around 11 million were involved worldwide, mostly in Europe. Those penalties still have yet to be decided.
Expect more information after the next status conference on May 19th.
