Sunday, September 27, 2015

Today's News From Wolfsburg


Confirming developments in Dieselgate.

For VW, it is indeed a shit storm (perfectly good German word).

First, Bild reports that the German Department of Motor Vehicles has told VW that they have to present a binding plan on how they will fix the emissions problem in the 2.8 million VW diesels on the road in Germany by October 7.  If not, the government will cancel permission for those autos to be operated on the road in Germany.  It is estimated it will cost between 100 to 200 Euro to bring each auto into compliance, but of course, there will likely be a mileage and performance cost.  That will be left to the lawyers.

Second, the Times of London reports that the European Central Bank at this time will accept no further asset backed securities from VW in its quantitative easing bond buying program.  The assets are, of course, credits for car purchases.  The ECB wants to mull over if VW's credit is good enough to keep it in the program.  That will kick the cost of credit for VW toward Greeceland.  The market risk is, as Brian pointed out, larger than anybunny can calculate

Third, the Frankfurther Allgemeine am Sonntag brings word that, in 2011, an engineer had attempted to inform management they had a small problem with illegal software running the diesels that were being sold (these motors were introduced in 2009 and sold until 2014).  This warning was dug out and presented to the VW board on Friday although the FAS did not know who saw the letter and why it was ignored (stay tuned)

Fourth, while Martin Winterkorn remains on the Porsche Board, it is pretty clear that he will not remain long, and moves are afoot to tell him to go blow on a straw if he tries to claim the money due him according to his contract.

Fifth (added Monday) the State's Attorney in Braunschweig (nearest city to Wolfsburg) has opened a case against Martin Winterkorn for dishonestly allowing cars to be sold whose emission records were falsified (hey, its German).  This follows the complaint forwarded to the State's Attorney's office by VW which named no names.

And to all a good night




4 comments:

notjonathon said...

I would think that the board should terminate Winterkorn for cause rather than allow him to resign. Of course, it's always possible that others still on the board were aware of the situation, and to fire him could create, uh, further difficulties.

Everett F Sargent said...

Well, while I was checking the CAFE standards ...
https://en.wikipedia.org/wiki/Corporate_Average_Fuel_Economy

This pooped up under the 2011 agreement section ...

Obama Administration Finalizes Historic 54.5 mpg Fuel Efficiency Standards
http://www.nhtsa.gov/About+NHTSA/Press+Releases/2012/Obama+Administration+Finalizes+Historic+54.5+mpg+Fuel+Efficiency+Standards
Tuesday, August 28, 2012

"President Obama announced the proposed standard in July 2011, joined by Ford, GM, Chrysler, BMW, Honda, Hyundai, Jaguar/Land Rover, Kia, Mazda, Mitsubishi, Nissan, Toyota, and Volvo, as well as the United Auto Workers. The State of California and other key stakeholders also supported the announcement and were integral in developing this national program."

Hm, a certain automaker is missing from that list ...

Automakers React to 54.5 M.P.G. (JULY 29, 2011 3:01 PM)
http://wheels.blogs.nytimes.com/2011/07/29/automakers-react-to-54-5-m-p-g/

VW blasts new CAFE standards, alleges bias towards truck makers
http://columbusohioecommerce.net/2011/07/vw-blasts-new-cafe-standards-alleges-bias-towards-truck-makers/

"The Volkswagen Group is a global leader in fuel efficiency and associated technologies, and we are committed to the ongoing negotiations with the White House on reaching maximum achievable fuel economy/GHG reduction standards.

Volkswagen does not endorse the proposal under discussion. ...

Volkswagen Group clean diesel products are among the most fuel efficient vehicles on the road today. Our new mid-size Passat TDI, built here in the US in Chattanooga, TN, achieves 43 mpg highway and can travel almost 800 miles on a single tank of fuel. If one-third of the vehicles on the road today were clean diesel, the US would save 1.4 million barrels of oil a day. Yet there is no consideration in the current proposal for the positive impact clean diesels can have on fuel consumption here in the US."

Somewhat shorter version?

"People's Car Group dirty diesel products are among the least efficient NOx emissions vehicles on the road today. ...

People's Car does not endorse the proposal under discussion, therefore we will continue to cheat the EPA NOx emissions standards.

People's Car Group dirty diesel products are among the least efficient NOx emissions vehicles on the road today. ... If one-third of the vehicles on the road today were dirty diesel, the US would lose 1.4 million lives per aeon. Yet there is no consideration in the current proposal for cheating due to the negative impact dirty diesels can have on NOx emissions here in the US."

john Mruzik said...

Given that the standards for emissions are only to get more stringent with tine, WTF were they thinking?

Russell Seitz said...

VW needs a software fix that plays the Black Brunschweig and ramps up nitrous oxide production when the system detects the presence of Land prosecuting attorneys