Article by Jack Ewing, Summary by Murray Manley
Recently, during an on-going investigation to find out more details about VW’s emissions scandal, a powerpoint presentation was uncovered that described “in detail how an automaker could cheat on emissions tests in the United States.” Although VW has admitted that nearly 11 million cars are fitted with the technology to cheat on emissions tests, the power point presentation may in fact be the most poignant evidence that has been uncovered. Although investigators do not yet know the breadth of the circulation of the powerpoint, the fact that the document exists at all is incriminating enough. Clearly, the deception was extremely calculated. Evidence shows that even after VW was under close scrutiny by government officials in 2014, they continued to deliberately install software to cheat the emissions tests, and clearly underestimated the potential costs and fines of being discovered. In a note from an American lawyer hired to examine the potential fines and losses for cheating emissions tests, VW was informed that the highest known penalty for cheating was $100 million. At this point in time, the costs of cheating must not have outweighed the benefits considering the small estimate of potential losses, a cost that VW easily could have paid with little or no effect on the company that had revenues of about $240 billion. In addition to the relatively low costs of cheating, VW was assured by engineers that detection would be nearly impossible. They were wrong, and in 2014, West Virginia University identified the first inconsistent data in emissions testing. As we discussed in class last week, Volkswagen recently announced that it has suffered losses of 6.2 billion dollars, and has allocated another 18 billion to cover various damages costs.
Source: <a href=”http://www.nytimes.com/2016/04/27/business/international/vw-presentation-in-06-showed-how-to-foil-emissions-tests.html?ref=automobiles&_r=0″>NY Times article</a>