2015: The year Volkswagen went from being badly incompetent to breathtakingly, globally criminal
This report, including the video above, is the opinion of the author.
If you own a Volkswagen, that company has just betrayed you. Its criminality just slashed the value of your vehicle. You just lost several thousand dollars. It’s just the tip of a much larger iceberg adrift in a sea of global betrayal and spectacular criminality. Volkswagen just betrayed almost everyone.
TOXIC EMISSIONS & HUMAN HEALTH
If you like breathing clean air, Volkswagen betrayed you as well. There is a direct tradeoff here, which the car industry never acknowledges. Mobility in exchange for human health - that’s the deal. Vehicle exhaust kills people prematurely. Emissions regulations reduces the number of people killed. This is the core issue underpinning Volkswagen’s crime.
Kings College in London estimates almost 6000 premature deaths occur annually from exhaust emissions. Experts in the US say the figure is 10 times higher. This is the dark side of mobility. Emissions regulators - governments - carmakers negotiate the limits, like a treaty. Typically, carmakers resist - but a line in the sand is ultimately drawn. A balance is struck between the number of premature deaths and the mobility which we all take for granted.
WHAT THE HELL IS NOx?
This is not a story about carbon dioxide. CO2 has become the Coca-Cola of exhaust gasses, but this is not a scandal about saving the planet. This hits a lot closer to home. It's personal. At the centre of Volkswagen’s crime are oxides of nitrogen - often called ‘NOx’.
CO2 Vs NOx - Philosophically very different
CO2 is intrinsic to combustion. Every litre of diesel produces 2.7 kilograms of CO2. If you’re in North America it’s about 22 pounds of CO2 for every gallon. Clever engineering cannot subvert this relationship - it is locked in strict mathematical proportion with the amount of fuel the engine drinks. There’s nothing we can do about CO2, except burn less fuel. But NOx is different. Clever combustion management can minimise NOx.
What the Federal Government Says About NOx
NOx is very bad for you. The Australian Government’s National Pollution Inventory says: “People who live near combustion sources such as … areas of high motor vehicle use … may be exposed to high levels of nitrogen oxides.”
The National Pollution Inventory says NOx exposure can irritate your eyes, nose, throat and lungs. It can build-up fluid on your lungs, too, and that’s just in low concentrations. In high concentrations it can cause throat spasms and death. NOx also forms ground-level ozone. It’s a critical component of photochemical smog, and it causes acid rain. NOx is bad shit.
WHAT VOLKSWAGEN DID
Volkswagen engineered a so-called ‘defeat device’ - software designed to cheat official emissions compliance tests. (Probably more correctly called a ‘deceit device’.) Its purpose was to comply with the regulations during a test and then deliver better performance, but at the cost of horrendous NOx emissions - 10 to 40 times the permitted levels - out there on the road. Volkswagen wilfully built cars illegally designed to emit extreme levels of poisonous gas.
HOW BIG IS THE PROBLEM?
There are 11 million vehicles doing this. It’s hard to conceptualise. So let’s assume they’re all four metres long. Let’s park them in a conga line, nose-to-tail, touching bumpers. The criminally non-compliant conga line stretches 44,000 kilometres. (That’s 10 per cent bigger than the circumference of the planet.) The scope of this crime is - literally and metaphorically - breathtaking.
WAS IT PREMEDITATED?
Pre-meditation is a big deal in crime. Lawyers call it mens rea - a reference to criminal intent. (It’s Latin for ‘evil mind’.) So manslaughter - accidentally killing someone unlawfully - is a lesser crime than commissioning a hit man to commit murder. Most car company scandals are wrapped in negligence - poor design, mostly - and are often served with an unhealthy cover-up on the side. This is very different.
Volkswagen’s crime was premeditated: it was conceived and systematically implemented. A grossly illegal engineering project was approved. Commissioned. Funded. Tested. Internally certified. It was incorporated into production across the Volkswagen, Audi, Skoda, and Seat brands. The number of people who must have known is appalling.
AUSTRALIAN MOTORING MEDIA - A JOKE
Some alleged motoring journalists have publicly asked: ‘What’s the big deal?’ These are the kind of so-called journalists who fly up the pointy end of the aircraft on Volkswagen’s ticket, and stay in five-star luxury all at Volkswagen’s expense, never disclaiming the considerable funds dropped on them by Volkswagen in implied exchange for favourable reports. Corrupt assholes, basically. What’s the big deal? Are you all smoking crack?
PROFIT OVER HEALTH - ON A GLOBAL SCALE
The big deal is: These Teutonic motherfuckers prioritised their profit over your health. That’s the stark, binary proposition. This is not some titillating scandal - we’re not talking about Kanye dumping Kim, or Monica smoking Bill in the Oval Office - Volkswagen has committed nothing less than a crime against humanity. And let’s face it, they’ve got form.
NOT HITLER'S REVENGE
I know what you’re thinking: Here comes the Nazi joke. Hitler. The gas. The Holocaust. The Germans. In principle the comedic fundamentals are all there … except for one problem.
The systematic execution of six million people by virtue of their religion, and another five million people just for kicks, is not something from which I’d care to extract a single kernel of humour. That event is one of the most appalling, indelible stains on humanity. I’m not implying there’s any comparison.
WHAT IS A CRIME AGAINST HUMANITY?
According to the International Criminal Court, a crime against humanity includes committing inhumane acts committed as part of a widespread or systematic attack directed against any civilian population, with knowledge of the attack, intentionally causing great suffering or serious bodily or mental injury.
International Criminal Court
Taking the decision illegally to emit a poisonous gas at unacceptable levels, known to cause the premature death of at least 70,000 people worldwide, is inhumane. Doing it on a global scale, 11 million vehicles, is - yeah - widespread. Definitely premeditated and systematic. Volkswagen did not do this accidentally. The victims are civilian populations. Contributing to ending someone’s life prematurely: great suffering plus serious bodily and mental injury. I didn’t make this definition up - check it out for yourself at the International Criminal Court. You are witnessing a textbook crime against humanity.
WHO LIFTED THE LID?
But this story is also a David versus Goliath victory. Volkswagen has almost $600 billion in total assets. It is breathtakingly powerful. And it is on its knees thanks to a humble 45-year-old engineer named Daniel Carder. Mr Carder and his team of four at the University of West Virginia received a $50,000 grant to investigate real-world emissions performance. These humble engineers are the ones who tipped over the first domino … and ultimately slayed a giant.
WERE THE REGULATORS ASLEEP?
The governmental gatekeepers of emissions compliance in North America, Western Europe and here in Australia are asleep at the wheel. How is it possible that a rinky-dink engineering department in North America uncovered this scandal first? It’s been going on for a decade. It would be nice to think our regulators would be on this faster than Oprah on a baked ham … but apparently they’re not. How many other automotive scandals are hidden in plain sight in just this way right now? The culture of virtual self-regulation by the auto industry is - clearly - fatally flawed.
VOLKSWAGEN'S BLIND AMBITION
Volkswagen has two characteristics you can absolutely depend upon: Blind ambition and a willingness to cut corners at any cost. Morality is optional. Volkswagen boldly declared that it would become the world’s largest carmaker in 2018. It achieved that objective in 2014, overtaking Toyota in total revenue. The biggest casualty was reliability - and plenty of Volkswagen customers have fallen victim to the half-baked R&D required to deliver such a boost in sales so quickly.
HOW VOLKSWAGEN EVEN BETRAYED ITS BOARD OF DIRECTORS
Lower Saxony - a German state comprised of almost eight million constituents - owns 20 per cent of Volkswagen. It relies on its Volkswagen dividend to provide healthcare, education, infrastructure and other municipal services for its eight million people. This crime has wiped almost 40 per cent off Volkswagen’s net worth. So, in a very real way, Volkswagen also just betrayed eight million people, and one of its largest shareholders, including 20 per cent of the board of directors.
EFFECT ON SALES & PROFIT
The smart money says for the next several years at least, Volkswagen will experience a slump in sales. Let’s call it 30 per cent. Given the way the car business works, this will probably reduce profits to below half of those which were expected. Inevitably, thousands of jobs will be lost - at dealerships all around the world. In factories. Component suppliers. More betrayal.
CORPORATE CULTURE AT 'SOCIOPATH CENTRAL'
Given the cost of exposure, how hard would it have been simply to comply with the regulations? How expensive? You have to wonder about any corporate culture that embraces criminality as the preferred alternative, the expedient option, and which also fails to acknowledge or account for the risk of that criminality. This is a salient lesson in the boardroom dynamics and culture of a major carmaker. Volkswagen has sociopaths running the asylum.
MORE WRITE-DOWNS TO COME
The elephant in the room here is Volkswagen’s balance sheet. Volkswagen has $560 billion in assets, but $220 billion in liabilities. The assets backing those liabilities are overwhelmingly vehicles - and they’re just not worth as much today as they were in August. There will be a further massive write-down in Volkswagen’s net worth.
FUMBLING THE FOLLOW-UP
It’s tempting to think Volkswagen and its related brands like Audi and Skoda are engaged mainly in producing vehicles. But since the last week of September, the company appears to have been mainly producing bullshit. The way they’ve handled this fiasco is disgraceful. It makes me think there is no corporate communications crisis management plan. Did they learn nothing from the DSG fiasco?
Former boss Martin Winterkorn: A one-man bullshit band
On the 20th of September, just after the scandal broke in the USA, then Volkswagen CEO Martin Winterkorn said: “I personally am deeply sorry that we have broken the trust of our customers and the public.”
That’s one way of referring to your company’s decade-long pre-meditated commission of a crime against humanity... He added:
“We do not and will not tolerate violations of any kind of our internal rules or of the law.”
Clearly that’s bullshit. They did tolerate all those things. For years. Massive internal collusion at senior executive level is the only way to perpetrate this crime across all those Volkswagen brands. That asshole is framing the debate like it’s an engineering inconsistency and some trust issues. Does he think we’re all idiots?
On September 23, Martin Winterkorn fell on his wallet. Not such a big impact, really. In one of the world’s most ethically reprehensible and disingenuous corporate statements, Mr Winterkorn referred to Volkswagen’s crime against humanity as, quote, “irregularities” - like it’s something they just overlooked. Visited the men’s room. Forgot to zip up. Apologies for the irregularity in my trousers. Asshole.
Furthermore, he said in this bullshit statement he requested the Volkswagen Supervisory Board bone him and offered, quote: “I am doing this in the interests of the company even though I am not aware of any wrong doing on my part”. I so fucking hate weasel words. This is like: Well, I might have done the wrong thing; I’m just not aware of it. Unbelievable.
The arrogance of this tool is beyond belief. He actually said: “I have always been driven by my desire to serve this company.” Except when it comes to accepting any blame whatsoever for the terrible crimes against humanity we’ve committed, obviously.
Mr Winterkorn added: “The process of clarification and transparency must continue.” Breathtaking. The hubris. What transparency, you dickhead? This is a crime with a 10-year coverup. And a dozens of complicit executives. Kind of the opposite of transparency, when you think about it.
Guaranteed, for the next couple of years, Volkswagen’s messaging will be all about trust - winning back trust. Like, OK, we were arrogant, cheating, sociopathic, criminal motherfuckers, but please trust us again. You know you want to. That Golf is a such beautiful car, isn’t it? Das auto…
In Volkswagen’s latest dieselgate missive, the company refers to the 11 million customers who will need to have the criminally non-compliant computer code in their filthy, illegal shitboxes re-flashed. It refers to the problem as a ‘correction’ of ‘emissions characteristics’. I fucking hate those weasel words. And they keep piling up. But don’t worry, there’s a Volkswagen action plan. So that’s OK.
HOW LONG WILL IT TAKE TO CLEAN UP THE MESS?
Let’s detain ourselves with that action plan for just a moment, to encompass the scope, if nothing else: 11 million vehicles. Let’s say, argument’s sake, one hour each from dropping off to collecting, plugging in, re-flashing, road testing, and associated admin… that’s 11 million hours in total. About half a million days. That’s twelve-and-a-half centuries, just between us girls.
Maybe that’s not fair. But let’s say there are the equivalent of 1000 establishments around the world doing just Volkswagen diesel engine re-flashing, eight hours a day. Five days a week. Should have the problem solved in [MUMBLES] 11 million divided by 1000, divided by eight, divided by five, divided by 52, take away the number you first thought of… Should have the problem resolved in a bit over five years. All good. Five years.
Those engines will make less power once the software fix is flashed in. Customers are unlikely to be completely overjoyed. Come in; we’ll make your car go slower. I’m thinking: class action. There’s not even a mechanism in place to compel customers to get any recall work actually done. So plenty of those engines will remain filthy.
$64-BILLION QUESTION: WHO ELSE IS COMMITTING THESE CRIMES?
Is it just Volkswagen? Are other carmakers cooking the books? On September 24, CNBC in North America detailed a report from Germany’s Auto Bild. It claimed BMW engines were emitting 11 times more than the mandated limit for NOx. Peter Mock, the Europe Managing Director at the International Council on Clean Transportation said, quote: “All measured data suggest this is not a VW-specific issue.” Maybe Volkswagen is not alone.
I asked BMW Australia: “Does BMW game the emissions system as well?” Here’s the response:
That’s a pretty good answer. Comprehensive and unequivocal. But let’s not forget that Mercedes-Benz previously formed an agreement with Volkswagen and Audi, about eight years ago, to use Mercedes-Benz’s diesel BlueTEC system to reduce - you guessed it - oxides of nitrogen. That’s interesting. So I asked Mercedes-Benz in Australia this very simple question: “...can you offer any guarantee to Australian consumers that Mercedes-Benz does not cheat the emissions compliance system in the manner of VW and (possibly) BMW?”
Mercedes-Benz was nothing if not economical in its response:
WHO'S BULLSHITTING WHO?
I’m going to leave you with this: psychologists call it the implicit but unsaid. In journalism they just teach you to listen hard for what people are not saying. You often get more truth wrapped up in the things that are unsaid. I asked Mercedes-Benz if it could guarantee that Mercedes-Benz does not commit emissions crimes in the manner of Volkswagen. As far as I can see, I don’t believe I got one.
Draw your own conclusion, but I think it’s interesting when a manufacturer like Mercedes-Benz suddenly does not stand behind its product at 100 miles per hour. It makes me wonder why no guarantee was forthcoming. I sincerely doubt the Volkswagen Group is the only criminally non-emissions-compliant carmaker doing business around the world today. You just witnessed the biggest automotive industry event since the global financial crisis, and it’s not over yet.