Twenty-seven billion seemed like an odd number, so Volkswagen upped the financial cost of its diesel emissions scandal to an even $30B. Actually, the extra expense comes entirely from the repair of older U.S.-market vehicles, which are proving less easy to fix than anticipated.
Because of this, VW has to rustle up some extra cash. The automaker set aside $26.7 billion to put the scandal behind it, and this latest price jump has the company pole vaulting over that marker.
This isn’t the only new grief facing VW, however. German media and The New York Times are reporting the arrest of the highest-ranking official so far — VW Group’s former powertrain chief.
A man identified by numerous sources as Wolfgang Hatz was arrested by German authorities Thursday. A former head of powertrain development, Hatz was a close confidante of group CEO Matthias Müller when the two men sat on the management board at Porsche. Hatz, who also served as head of R&D at Porsche, is being held in Munich without bail. Authorities claim the former executive poses a flight risk.
Hatz’s time at VW covers the leadup to the emissions-cheating era — he started as Audi powertrain chief in 2001 before becoming top engine boss at VW Group in 2007. That role lasted until 2012, though he stayed with the company though his role at Porsche.
There’s no doubt investigators will press Hatz for his knowledge of what other top executives knew. That’s been the case in previous arrests.
Now, back to the engines Hatz played a role in sending to all corners of the world. According to Reuters, VW will set aside an extra 2.5 billion euros ($3 billion) to cover the repair-related costs. While the software changes to the 2.0-liter engines aren’t giving the company any trouble, the hardware changes (or the second step of the two-part fix) certainly are.
“We have to do more with the hardware” to bring the engines to compliance, a VW spokesman told Reuters. Evercore ISI analyst Arndt Ellinghorst said that, given the number of vehicles affected, the cost could be as high as $6,100 per car. This is leading to worry over what unforeseen costs might stalk the company’s 3.0-liter diesel vehicles.
Back in July, after giving VW the green light for a full fix, the Environmental Protection Agency described the repair as such:
“The approved modification involves both software and hardware changes. VW will remove the defeat device software that reduced emission control effectiveness in all but emissions testing circumstances, and replace it with software that directs the emission controls to function effectively in all typical vehicle operations. VW will also replace the NOx catalyst and, for 2009 models, certain other emission control system hardware.”
Screw em’
Everyone who is surprised that it will cost them more than originally anticipated raise their hand.
+1. Two years on, and still no fix in place. Has *anyone’s* car actually been repaired?
Quite a few have apparently had their cars repaired and most seem happy-ish with it. Of course these are TDI die-hards that want to keep their cars forever or something. I’m doing the buyback in good time, but have no desire for another diesel. Waiting until late next year to decide on my next car.
However, there is a thread on the TDI forums where people with early production 2009 Jettas with the DSG transmission are reporting that VW’s DSG update bricks the transmission, and it doesn’t look like they’ve figured out the problem yet. VW is paying for Enterprise rentals for them it seems. So I can kinda of see why they’re spending $3 billion more.
Just like when you do something to your house, it’s always going to cost more and take more time than you think.
Quite a few took VW up on their offer to take back these polluters and many hundreds of those carcasses are parked in an open field along I-25, just south of Fort Carson, CO.
Someone explain to me what the big deal was and why every automotive publication feigns outrage over such a non issue
No one died because of it, no run away cars and quite frankly, if it weren’t for the socialist libtards running things at the time in America/Europe, wouldn’t be such a big deal
Tell me where I’m wrong, because again, other than leaving the libs butthurt and embarrassed, nothing bad happened
Agreed. Total witch hunt that hurt no one, and VW beat the EPA with a diesel everyone loved. Sending them to a junkyard would be the Democratic thing to do. Such a waste.
If I wasn’t gonna move, I’d be a used TDI and gut the emissions crap.
They also wanna nail diesel to the cross since it was a viable alternative to all the hybrid and electric cars, which save Tesla, weren’t doing it for people, plus diesel doesn’t suffer from the dreaded range anxiety and could come with Manual
Talk to an old person – someone who was around in the ’50s, or early ’60s, when there were no pollution regulations at all in the USA. The human turds floating down the local river, the air near the factory that burned your eyes and lungs, the IQ points shaved off the kids from the lead in paint and gasoline – it wasn’t all puppies and unicorns.
what about any of that? The “free market” will see to it that consumers only buy from environmentally conscious compani…
BWAHAHAHAHAHAHA lol yeah right.
I’m reminded of the story about a paint factory in Newark. They would mix green or blue paint on Fridays, so the effluent in the river would not show over the weekend. I’m old enough to recall leaded gas and smog in NYC, along with incinerators and heavy heating oil. Today you can swim in the upper Hudson. VW scammed and got caught, and for those of us who actually bought the car, everything south of the turbo was trash. I’ve zero sympathy
I am an old person of which you speak, and yes, it was pretty bad, especially in the 1950s, when most large buildings in snow-zone cities were heated with coal! The switch to gas and cleaner burning oil heat did a great job.
The car smog problem was worst in places with a lot of traffic and temperature inversion conditions were built in to the topography. The PCV valve in 1963 made a big difference, but the biggest was getting the lead out of gas, in the ’70s.
Since then, electronic ignition and fuel injection have made ICE’s much cleaner. Just stand on a busy corner until a 1960s vintage car goes by and you’ll get a strong whiff of what it was like.
But that was coal heat and leaded gasoline burned in basic engines. Diesel is a different beast, primarily due to particulates, but elevated NOx levels aren’t healthy for man or environment.
Despite that, I think they should have grandfathered the American VWs after removing the defeat device, and curtailing future diesel sales. They’re Volkswagens! How long will they be on the road?
Let me point out that I’m not a liberal – I like to cut down old-growth rees with a 50 cal while the owls are still nesting.
Bad running Diesel makes some pretty nasty particulates that lodge in lungs of cute babies and gives them cancer or COPD or something and they die.
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1513327/
“I like to cut down old-growth rees with a 50 cal while the owls are still nesting.”
Newsflash: You are an awful person.
You don’t consider lung disease anything more than just an embarrassing occurrence?
“Study: Volkswagen’s excess emissions will lead to 1,200 premature deaths in Europe”
http://news.mit.edu/2017/volkswagen-emissions-premature-deaths-europe-0303
That’s just one of many articles on the subject, but it proves a point that yes, it has caused issues reaching far greater than liberals having sour grapes. Let’s be honest, libs will complain and rant anyway, they don’t need an emissions scandal to get on their soapboxes.
“Study: Volkswagen’s excess emissions will lead to 1,200 premature deaths in Europe”
So…the Germans YET AGAIN exercise their cultural bent toward genocide.
-squints eyes- I’m not sure if this is trolling or a profound lack of knowledge of VW’s activities. Running software to deliberately deceive EPA testing? Check. Knowledge of the deception at the highest corporate levels? Check. No other company could build diesels that complied with EPA regs without cheating? Check. Dirtier air from VW diesels. Check. Calling anyone concerned about the environment a socialist libtard? Check.
@Zane Wylder:
So you’re OK with any company that willingly violates Federal regulations with a systematic campaign of deception, as long as “nobody gets hurt”?
This would apply to banking regulations, tax code, building codes, educational requirements, and so on – it’s all good to cheat on these things as long as nothing bad happens?
Are you OK with doping in sports, because the athletes only hurt themselves? In one sense, that’s what VW did so they could up their game.
As far as ‘nobody getting hurt’, diesel particulates are demonstrably harmful, and statistically-speaking, somebody got hurt due to VW’s violation of the rules. Moreover, 500k VW owners *would have* gotten hurt on their trade-in values because their cars are now radioactive, except the courts interceded on their behalf to make them whole.
It’s called fraud. Customers paid for something and got something else. Many owners bought their TDIs specifically because they thought they were doing the right thing for the environment. Whether you care doesn’t matter — others do.
Harley had there own emissions scandal, paid a smaller fine, and no one’s talking about it, http://www.autonews.com/article/20160818/OEM11/160819837/in-wake-of-vw-scandal-u.s.-fines-harley-davidson-%2412-million-for
Everyone in the auto industry cheats, they just happened to be the target of the Limp Wristed Queens EPA ire when they got caught
Particles from everything will kill us all, the very air you’re breathing as we speak is slowly killing us. I’d be more concerned with ignition switches and stuck accelerator pedals.
Either way, time for this BS dieselgate non story to die already
The Harley scandal was different. First, it was an aftermarket device. No customers were intentionally deceived. Second, it was sold as a “competition device” (for more than 20 years, btw). If owners used it on the street, they did so consciously. APR and other aftermarket tuners have been doing it in the auto industry for years. The EPA never regulated competition devices.
ive got a “competition only” stainless steel exhaust on my scooter. meaning that it doesnt have the required built in catalyst the OEM one has. why? the stainless is a better quality and half the price of the 1-piece heavy OEM unit that cracked.
let’s be clear- Harley got smacked because even though stuff like exhaust systems and PCM tuners were for “off road/competition use only,” dealers were installing these things on customers’ bikes before they even rode them home for the first time. While technically they were being installed “after sale,” that required such a “wink wink, nudge nudge” the EPA said “c’mon now, you know you can’t do that.”
If I buy a new Mustang, the Ford dealer will not install an “off-road” catless X-pipe and non-certified PCM tune from Ford Racing Parts before I drive the car home. Heck, chances are they won’t do it at all if the car is registered for on-road use.
And technically (again) it’s just as illegal for you to put a “competition only” exhaust on your car/truck/bike. They just can’t possibly find every one-off out there.
“I’d be more concerned with ignition switches and stuck accelerator pedals.”
Then you’re not very bright, because any competent driver can easily deal with those situations.
There has to be environmental regulations or we’d live in a cesspool. VW profited by cheating a system that their competitors complied with, so they deserve to pay financial penalties.
There’s no problem that can’t be made to go away with the dismissive use of such illiterati vocabulary such as “libs” and “libtards”.
This logic is just as valid as “we never had child safety seats or even seatbelts back when we were kids… heck, we used to ride in the back of the pickup while Dad and Uncle Lem would chain smoke Luckys and guzzle Shafers and toss the cans out the windows, and we’ll all fine, so what’s the big deal?”
Zane, Volkswagen marketed the hell out of “Clean Diesel” as an alternative to hybrids, aggressively cheated on pollution tests, extended their crisis by implementing an ineffective “fix”, and only came clean in the end when there was no other option. They achieved an unfair advantage in the CAFE game by selling diesel cars without the pollution control hardware necessary to meet US pollution requirements. Other manufacturers either made compliant diesel cars that flopped because they were too expensive (GM) or concluded that they couldn’t make a diesel passenger car that met US pollution standards at a price Americans would pay (Mazda). The other car manufacturers sold cars that met oxides of nitrogen pollution limit without cheating by selling gasoline engine cars. They also achieved impressive fuel efficiency results with Atkinson cycle gasoline engines paired with electric motors.
Green Police Superbowl Ad https://www.youtube.com/watch?v=Ml54UuAoLSo
The VW’s passed the smog test. The EPA is at fault. Last but not least, the VW will always be cleaner than a heavy duty diesel. VW should sell them in another country, where they’ll still be driven 30 years from now, unlike todays modern gasoline/electric junk.
You kidding? They past the test because of the software cheat.
VW is not permitted to sell the diesels elsewhere. If they cannot be brought into compliance, the settlement requires them to be scrapped/salvaged.
“Zane” sounds like your typical 19 year old college kid who stumbled onto Atlas Shrugged and rants about “overregulation” he doesn’t even understand. That is, in between sly mutterings of “who is John Galt?”
Simply put, VW consciously cheated and broke black letter law. I’m one of those silly folks who think that the rule of law is important.
Frankly, I wish the folks who are as upset about VW’s cheating were half as upset about the EPA’s own lawless activities, like sweetheart legal deals with environmental groups, and funneling tax dollars to the same.
I don’t see anybody defending the EPA. This is an article about VW’s cheating ways and the cost to correct them, and appropriately that’s where most of the comments are directed. Whether we agree with the EPA’s methods is irrelevant. It’s a discussion about VW breaking the law, not a debate about whether or not the regulations are fair.
it’s possible to be upset with both, you know.
FCA did the same thing with their diesel engines. And they haven’t been fined billions.
That’s not over.
#1 the investigation is on-going,
#2 so far they’ve only been found to have potential defeat devices in their code.
whatever penalties they get assessed (assuming Pruitt doesn’t gut the agency, which seems likely since he was appointed by a spoiled brat who hates rules) will depend on if and how often those defeat devices activated.
If this was Ford or GM you’d be screaming the loudest about “the children” and demanding they be shut down. But because it’s your preferred $#!+box you are good with it. Screw VW
Wh ship them to Kenya or Brazil, anywhere that doent have US and Euro emissions standards. Agreed, this is a witch Hunt.
In my best Ernst Blofeld voice; “No, jonnyz, we destroy them”.
“…the cost could be as high as $6,100 per car”
Per my earliest comments on this matter, I still wonder why VW doesn’t just scrap them all. This is just throwing bad money after good. They’ll have to support these cars forever, and I can’t see that the headache is worth it.
SCE…I am in total agreement. From the get go I have been saying that **if** a fix was possible that was feasible and cost efficient they would have done it in the first place in lieu of cheating. Since they opted to cheat, that kind of tells us that making the cars compliant is either cost prohibitive or performance prohibitive. Either way, I suspect each repaired car will be a nightmare to keep emission compliant due to the fragility of the repair.
Wonder how much it will cost them to fix the gen 2 3.0 liter TDI’s? They only have until November to get a fix approved, or they’ll be required to buy them back as well. Touaregs, Cayennes and a number of Audi models … that would be a costly buyback.
The buyback won’t hurt them if they use the tactics any insurance company uses to assess value on a totaled car. Since many are leased, they could “recall” the model. The lessee probably owes money on the recalled model, and can get out of it by leasing another model. The recalled high end models might be worth converting to gas, if they can avoid a salvage title. Bottom line: where there are sleazy lawyers, there’s a way.
“Everyone cheats”. I don’t think so.
I worked 50 years in the auto industry, at every large company and lots of suppliers. I have NEVER seen cheating like VW did.
I can still recall, vividly, the day Henry Ford II went down to the dynamometer rooms and personally fired everyone who was involved in deceiving the government. No cars were actually produced that were deficient, just the reports for future production. That was about 1970, and you can be sure no one at Ford ever again tried to cheat on emission or safety tests again.
Another reason car companies (except VW) never cheat the government is that it is almost certain they will be caught, either by government or private party testing, or by whistleblowers or other interested people.
The question that I have is how many of VW’s competitors knew that Volkswagen was cheating? They all do competitive testing.
Yeah I just can’t see other automakers not sending someone out to buy a TDI or two for testing to try and figure out exactly how VW made them clean enough to pass w/o the DEF. I know I was suspicious when I learned they didn’t use DEF when the others were. And if VW figured out something that no one else was able to why didn’t they file patents on that revolutionary break through and try to license it?
They had their own Lean NOx Trap device, which traps NOx particles and then burns them off using fuel, but VW underestimated the amount of fuel needed so they just disabled the system when not in testing (hence the elaborate cheat involving measuring steering wheel movement and barometric pressure and whatnot to determine when the car is not in testing).
What perplexes me is for how long VW stuck to this cheat. This is a company with serious financial clout, not some Albanian automaker trying to stay in business. You would expect they would use the cheat for 2 years or so and then either perfect the system or go the DEF way, and if they had done that they wouldn’t have been caught.
The steering wheel angle thing was not in the original software, that was added as part of the first “fix” they tried to pass off before the scandal.
“The question that I have is how many of VW’s competitors knew that Volkswagen was cheating? They all do competitive testing.”
yes, but most likely they would just throw the car in the lab and run the standard test cycle, which the cars would pass.
I doubt they would just run the IM240 test because there was more to learn, like how they maintained that fuel economy when the physics said they couldn’t.
they wouldn’t run just IM240, they’d run the entire FTP drive cycles. and the cars would still pass.
Huh.
The, “this is just a software fix, you’ll see,” crowd has gotten AWFUL quiet.
who thought the earlier 2.0 liter cars just needed a software fix?
Go back to the beginning of this and read the B&B commentariat. You can search here by tagged posts. Sorry, I’m not your research assistant – but there were plenty in the B&B saying there was nothing to see here and software would solve the problem.
Germans may beat every other nation in competition, conquer the whole world but in the end because of stupid decisions of some gruppen fuhrer CEO manages screw everything up leading to the total collapse of enterprise.
I’m sure that nobody whose last name is Porsche or Piech will ever be prosecuted. I doubt that even Winterkorn will be targeted.
As far as I recall they were prosecuted after war by allies.
But muh deeeesil never kilt nobody
Ve ver all juzt follozing zee orderz