Is it something in the culture of the automobile industry that renders it unable to follow the rules? Is it simply impossible for this gigantic, enormously profitable business to obey the law?
First General Motors set about selling cars with an ignition switch defect known to kill motorists, and now Volkswagen is found to have been installing devious software into millions of vehicles with the express purpose of deceiving regulators into believing the cars were meeting emissions standards. In fact, the vehicles were belching pollutants at rates up to 40 times legal limits.
The Environmental Protection Agency, alone, could fine the company up to $37,500 per car, equaling a maximum penalty of $18 billion – assuming the deception isn’t worse than already disclosed. Stay tuned for that.
The U.S. Justice Department is, appropriately, beginning a criminal investigation of Volkswagen. It should pursue the matter aggressively. The industry is evidently in need of a cold reality check, one that Washington should be prepared to deliver.
Volkswagen’s deceit is, at least in one significant facet, even worse than that of General Motors. While GM’s conduct cost lives – and is, in that respect, unforgivable – the initial problem was apparently inadvertent. Volkswagen set about tricking regulators and polluting the environment, all while boasting about the company’s commitment to clean air. Volkswagen has admitted this. It’s not a question.
The deception began in 2009 and involves four-cylinder diesel versions of the Jetta, Beetle and Golf, as well as the 2014 and 2015 Passat and the Audi A3 since 2009. Recalls, lawsuits and headaches are in the offing. And for what reason? Did company leaders think they could get away with this permanently?
Among the important questions to be resolved is how high up the deception went. Clearly, instructions went to the company’s engineers to design this software, but who gave the instructions? That has a lot to do with what kind of penalties should be imposed.
One form of penalty played out on Wednesday. With his contract up for renewal, Volkswagen’s CEO Martin Winterkorn instead decided to resign. It was the right decision because he was the wrong man for the work ahead.