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Ahead of the Curve Auto Supplier Blog

September 30, 2015

Smog Hovers Over VW Management's Deception

As details of the Volkswagen emission testing scandal continue to emerge, an increasing amount of evidence seems to show that senior VW execs were repeatedly warned about the legality of the emission control software used to manipulate diesel engine testing. 
 
According to German media, VW was warned at least four years ago that the computer software was illegal for use in production vehicles.  Another newspaper report said that it had information showing that back in 2011 VW’s own technicians had warned senior management that use of the software in production vehicles was illegal. 

However it doesn’t stop there, Germany’s Die Welt newspaper has now made public “internal German paperwork” suggesting “that Ms. Merkel’s coalition planned to try to delay EU plans to introduce tough new vehicle emissions tests.”  According to the Die Welt report, the EU aimed to have the new tests enforced by the end of 2017, but the German government was behind efforts to slow the introduction until at least 2021 and that they sought to retain current loopholes.

All of this begins to create a ‘smoking gun’ scenario that has been absent in other recent recall scandals.  As a result, in addition to massive corporate fines from both the U.S. and Germany, there is the very real possibility that prosecutors from both countries will actively seek fraud charges related to the selling of 11 million vehicles with falsified records. 

VW’s CEO Martin Winterkorn quickly resigned accepting responsibility but not wrongdoing.  It appears that he’ll be at the center of this investigation in the years to come as he now faces a criminal investigation.  But in the end, the public, VW’s employees, dealers and shareholders, VW’s suppliers and their shareholders, will all suffer greatly.

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