New Documents Could Cause More Trouble for VW

Maker resisted Takata airbag recall; top execs knew about diesel probe.

by on Feb.15, 2016

Former VW CEO Martin Winterkorn may have known about diesel cheating in May 2014.

New documents could cause new headaches for Volkswagen.

A top advisor at the German automaker, known internally as the “fireman,” appears to have advised senior executives about VW’s diesel problems as early as May 2014. The maker only acknowledged cheating on emissions tests in September 2015, responding to charges by the U.S. Environmental Protection Agency.

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Separately, VW wrote U.S. safety regulators advising them it did not see the need for a recall involving Takata airbags now linked to at least 11 deaths and 139 injuries. The automaker this month reversed that position, recalling 850,000 Volkswagen and Audi vehicles.

(In wake of diesel scandal, VW may shed its truck division. Click Here for more.)

The Takata issue is the result of airbag inflators that appear either to have been improperly manufactured or simply use a chemical compound prone to breaking down over time. The primary emphasis was on airbags coming from two North American plants. Either way, the airbags may, when triggered by a crash, overinflate, sending metal and plastic shrapnel spewing into the passenger compartment.

By the end of 2015, approximately 19 million vehicles sold in the U.S. and using Takata inflators were targeted for recall. But early last month, NHTSA indicated it suspected there were problems with millions more airbags and pushed six automakers to expand the recall.

Well over 20 million vehicles using Takata airbags have now been subject to recall.

While several other automakers quickly responded with recall plans, VW initially resisted, calling the government agency’s intentions “overly broad,” and contending the German plant where Takata made VW’s inflators “does not suffer the same deficiencies” as the U.S. and Mexican plants.

VW reversed itself days later. But its initial reluctance underscores concerns about its willingness to work with government agencies regulating the auto industry.

VW is already under investigation by the National Highway Traffic Safety Administration which suspects the carmaker may not have complied with the agency’s early warning report designed to flag potential safety issues. As TheDetroitBureau.com reported last October, Significantly, the company reported less than half as many incidents as either Fiat Chrysler or Honda, both of which were fined in 2015 for under-reporting their own death and injury data.

(Click Here for more on that story.)

If VW did fall of the requirements it could face hefty penalties, Congress in December approving a tripling of the maximum fine NHTSA can levy, to $105 million per incident.

But VW faces far stiffer fines in the diesel scandal. The U.S. Justice Department last month filed a civil suit on behalf of the EPA seeking as much as $46 billion for alleged violations of the Clean Air Act. Last September, the agency revealed VW had used a so-called “defeat device” on nearly 500,000 vehicle capable of detecting when a vehicle was undergoing emissions tests, at which time it would sharply reduce the level of smog-causing oxides of nitrogen.

VW shortly after acknowledged the subterfuge, and also admitted cheating with a second line of diesel engines.

Senior executives have repeatedly insisted that the problem was the result of a handful of rogue engineers, and that they were not aware of the problem until well into 2015.

But newly discovered documents indicate top executives were advised of the problem in May 2014. The German newspaper, Bild am Sonnstag, reported that the letter was written by an advisor known at the company as “Winterkorn’s fireman,” a reference to former CEO Martin Winterkorn, who was forced to resign shortly after the scandal broke.

“It can be assumed that the authorities will investigate VW systems to establish whether Volkswagen has implemented test-recognition software,” the paper said, noting it surfaced as part of an internal investigation by U.S. law firm Jones Day that Volkswagen has commissioned.

The official results of that probe were expected to be released in time for VW’s annual shareholder’s meeting. But the automaker has indefinitely delayed both that meeting and the release of its 2015 financial report.

(VW planning to give “generous compensation” to diesel owners, says victims’ fund manager. Click Here for the latest.)

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One Response to “New Documents Could Cause More Trouble for VW”

  1. GT101 says:

    The agenda here is very clear and unscrupulous.

    For those who have not bothered to do their homework, the EPA has posted on their website that VW made a good faith effort to fix a minor emissions issue in 2014 and that the fix DID improve the situation but did NOT totally resolve the issue. VW executive management clearly did not know about the bogus software at the time as they had chastised the EPA for lower mpg ratings on the VW diesel models compared to real world results. No one would be stupid enough to draw attention to the difference in mpg if VW executive management knew there was illegal software in their diesel engines.

    Of course those with an agenda don’t bother obtaining factual information. They prefer to quote unreliable sources looking to profit from meritless claims.

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