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Cooperation in the Midst of a Scandal

05.13.16 - Volkswagen CEO Martin Winterkorn

Volkswagen is currently working with the Environmental Protection Agency (EPA), California Air Resources Board (CARB) the Federal Trade Commission (FTC), the Attorney General of each of the fifty states and the US Department of Justice to come to a resolution regarding their diesel emissions scandal. This cooperation certainly shows a look forward and the commitment of Volkswagen to hopefully regain its good name in the US which has been mired by this scandal; a scandal that resulted in the discovery that the diesel engines in Volkswagen models were emitting as much as forty times the legally allowed levels of emissions into our atmosphere.

This cooperation, while admirable, is not without its drawbacks as Volkswagen had previously announced it would release an interim report of the findings of the investigation, but currently both of their US attorneys have advised them this would be detrimental to the investigation. Whether the release of the report at this time would simply bring a further negative light to the scandal and cause the US Government to ask for more of a settlement than is being offered or this would simply continue to show us that Volkswagen was fully aware of the scandal from the beginning is hard to say.

Recent information did show us there was a presentation created at Volkswagen ten years ago that informed the head of the company they needed to cheat on the emissions testing in the US. This cheating would help to protect the engines and showed an extremely low risk of being discovered because the EPA had for years used the same emissions test on a Dyno for all vehicles. Since the scandal broke out Volkswagen has been under a lot of scrutiny as has the EPA which has since changed its testing processes to be less predictable and more stringent.

An interim report might do more damage to the brand as Volkswagen has already presented a possible settlement for the over 600,000 vehicles in the US that are affected. This settlement offers owners a fix or buyback of their vehicles and a possible $5,000 reward each for the scandal taking place. There is additional parts to the settlement that will possibly help to improve the EV infrastructure of the country and even the development of an EV model from Volkswagen in the Tennessee plant, but nothing is finalized because of the ongoing investigation and the fact the 3.0-liter engines still don’t have a fix for the emissions issues.

The expected completion of the investigation is somewhere in the fourth quarter of the year and so far there have been nearly 65 million documents submitted for review for this scandal, of with nearly ten million have been forwarded to the governmental officials. There have been nearly 450 interviews conducted with many more to go before this is completed. When it’s all over we can expect Volkswagen to have a new look at the top and for the company to be transparent regarding the emissions of their vehicles unless Volkswagen is in the habit of spending $18 billion on scandals, not to mention the negative effect this has on their reputation.

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