I still don't have a feel for what VW hoped to gain. Less cost per vehicle, yes. More units sold and market share gained by having a superior technology in the market, yes. But adding all that up brings in what, maybe $2K per car? In the U.S. were talking about a half million cars. So maybe VW stood to gain a billion dollars in the U.S. if they never got caught?

Now they stand to lose $20B in the U.S. One can argue whether a 20X penalty is appropriate, but I think everyone would agree that the penalty should exceed any ill-gotten gains by a wide margin.

What surprises me in retrospect is that VW did this. It was a really stupid and shortsighted gamble. Did they really believe they would never be caught? If I had launched a cheater product, I'd be in constant fear the competition would study how I accomplished the advanced technology. I'd be less worried about regulatory organizations, but I still would not bet on them never finding it.

If I were a VW shareholder, I'd want to know who made this decision and I'd want them skewered on a pike. Their are prudent gambles made all the time in business, but this doesn't seem like one.

I think a mid-level engineer from VW went to his boss and said, "look what the guys at Audi and Bosch came up with - they have a gizmo that senses emission test stand protocol and re-tunes the engine. They are only using it for R&D but, ...what if we give up the ghost on all of this urea development and just go with this software solution. Nobody will know how we did it." His boss goes to the VP of engineering and tells the same story. The three of them get big bonuses. The suits from the C-executive suite have no idea what is going on but they are happy to pay bonuses because now they have a competitive advantage. The VP of engineer retires as soon as things go south, the C-level executives point to mid-level engineers (since the VP of engineering retired) and nobody believes that story - now the whole company is in a pile of crap except one or a few Senior technical people - they are sitting in their villas with no worries at all. They may have retired 4 years before the car was even in production - a PPAP test starts 2 to 4 years before launch, bonuses are paid long before launch for technical innovations and cost-cutting innovations.

Similar things happen in pharmaceuticals, "yes, it is a great innovation and we should reformulate with lower dosages - we'll save millions" The innovator is rewarded and he is gone by the time human trials are complete - and fail.

 

There's probably a lot of truth to that, and I hope we find out. The only insurance against what you describe is a good culture. That's true at the societal level, too. Things don't work if the prevailing culture is one of corruption. People need to be pretty darn sure, at every level, that doing the right thing will be best for them and that choosing the wrong thing will not. Bosses that reward shortcuts in favor of short term gain put a lot more at risk than they think.

 

Gopher,

Apple knows it's cost effective to do the new sale vice repair. That is better for them than to actually repair.

I specifically mentioned repairs vice replacement.

TCM already shown the costs rising exponentially for a mere percent or two of improvement.

 

And somewhere a VW executive is saying, "And I would have gotten away with it too, if it weren't for you meddling kids!" As quoted on Scooby Doo by a villian. Since it was some college kids who discovered the "plot".

 

Ruh Roe !!

 

http://www.nytimes.com/2016/04/27/b...-showed-how-to-foil-emissions-tests.html?_r=0

FRANKFURT — A PowerPoint presentation was prepared by a top technology executive at Volkswagen in 2006, laying out in detail how the automaker could cheat on emissions tests in the United States.

The presentation has been discovered as part of the continuing investigations into Volkswagen, according to two people who have seen the document and who spoke on the condition of anonymity because of the legal action against the company. It provides the most direct link yet to the genesis of the deception at Volkswagen, which admitted late last year that 11 million vehicles worldwide were equipped with software to cheat on tests that measured pollution in emissions.
...
The management board led by Martin Winterkorn, the chief executive who resigned in September after the admission of cheating, repeatedly rebuffed lower-ranking employees who submitted technical proposals for upgrading the emissions controls, according to the two people who attended meetings where the proposals were discussed. The management board rejected the proposals because of cost, the people said.

 

Ruh Roe !!

Nice, even the Beetle-VW-style daisy.

 

From the NY Times article:

"The management board led by Martin Winterkorn, the chief executive who resigned in September after the admission of cheating, repeatedly rebuffed lower-ranking employees who submitted technical proposals for upgrading the emissions controls, according to the two people who attended meetings where the proposals were discussed. The management board rejected the proposals because of cost, the people said."

Talk about "Ruh Roe".

 

Since it was some college kids who discovered the "plot".

Was it college kids in Europe who first reported the anomaly?

 

Was it college kids in Europe who first reported the anomaly?

The story is in the first post in this thread.

 

I wonder how many have lost their wings?

 

I wonder how many have lost their wings?

 

@GopherT

West Virginia University received funding to confirm the OCT 2014 ICCT white paper from a former EPA Administrator. The EPA could have acted earlier based on the ICCT white paper, but, why take action when they can milk the issue ... and here it is 18 months later and people are still allowed to drive their polluting vehicle and get it re-registered as it will continue to pass the current testing protocol.

"I'm from the government and I'm here to help" [/sarcasm]

What's worse ... VW cheating or government inaction? both have added NOx to the atmosphere.

 

@GopherT

West Virginia University received funding to confirm the OCT 2014 ICCT white paper from a former EPA Administrator. The EPA could have acted earlier based on the ICCT white paper, but, why take action when they can milk the issue ... and here it is 18 months later and people are still allowed to drive their polluting vehicle and get it re-registered as it will continue to pass the current testing protocol.

"I'm from the government and I'm here to help" [/sarcasm]

What's worse ... VW cheating or government inaction? both have added NOx to the atmosphere.

If you think it is that urgent, do you favor banning all vintage cars as well?

 

What's worse ... VW cheating or government inaction? both have added NOx to the atmosphere.

Well, what's an extra ~1.5% over that time frame and number of affected vehicles compared to the whole of every vehicle regardles sof age that was ion the road inthe same time frames.?

By my math that the equivalent of had the typical owner drove about 2 miles more for every 100 they did actually drive.


My point is there's the principle of the thing and then there's the actual measured level of the offence and by my views that measured result is pretty damn small.
Saying lying and theft is lying and theft is one thing but really is a stolen and lied about garden gnome from your front yard the same level of social offence as having stolen your brand new luxury vehicle out of your garage and lied about it? And do both truly deserve the same levels of reaction, investigation and punishment?

Beats liar liar pants!

http://thepigeongazette.tumblr.com/post/143169002660/and-thus-ended-the-story-of-the-lesser-known

 

If you think it is that urgent, do you favor banning all vintage cars as well?

Do you want compliance with the latest tier group? If your objective at any cost is pure air ... then yes. Of course then we must engineer the natural NOx generators and anything else that might interfere with pure air.

Personally, I think they have approached a point where cost exceeds benefits.

The zealots would want all them off the road. Do you remember the buy back program in 2005?

 

Do you want compliance with the latest tier group? If your objective at any cost is pure air ... then yes. Of course then we must engineer the natural NOx generators and anything else that might interfere with pure air.

Personally, I think they have approached a point where cost exceeds benefits.

I don't want anything more than ethical business practices. If the rules cannot be met technically and the penalty for violating the rules is enormously high, then, as a steward of the organization that us owned by thousands of good people all over the world, I would not have continued making diesel vehicles or I would have added a urea system that meets all the current rules.

I would also seek support from industry organizations to petition for a rule change.

I could not imagine looking at a bunch of shareholders and telling them, we tried to increase revenue by cheating and we failed so VW is now on the verge of bankruptcy. Have a nice day.

 

Saying lying and theft is lying and theft is one thing but really is a stolen and lied about garden gnome from your front yard the same level of social offence as having stolen your brand new luxury vehicle out of your garage and lied about it? And do both truly deserve the same levels of reaction, investigation and punishment?

I like, Bob Lutz (who knew VW was screwed on 25 Sep 2015) almost feel sorry for them. Yes, they are being made an example of what can happen but it's pretty hard to actually feel sorry for them with the news of how they planned and ignored repeated internal warnings about what they were doing. If you keep stealing garden gnomes from yards day after day don't cry if you get a pants load of rock-salt from a shotgun one night.

http://video.cnbc.com/gallery/?video=3000425136

 

I like, Bob Lutz (who knew VW was screwed on 25 Sep 2015) almost feel sorry for them. Yes, they are being made an example of what can happen but it's pretty hard to actually feel sorry for them with the news of how they planned and ignored repeated internal warnings about what they were doing. If you keep stealing garden gnomes from yards day after day don't cry if you get a pants load of rock-salt from a shotgun one night.

http://video.cnbc.com/gallery/?video=3000425136

Here is Lutz' piece in Road and Track

http://www.roadandtrack.com/car-culture/a27197/bob-lutz-vw-diesel-fiasco/

 

Personally I don't feel sorry for VW. They danced to the music and now they will pay the piper.

That does not conflict with my belief the cost benefits for that last 2 percent will be exorbitant and yet the consumers will absorb the costs for that "new" ride.

The way to solve a political problem is using the political system. Of course I would expect a vitriol attack from the "at all costs" fanatics.

In the @GopherT link, Bob did say the German government will do what is necessary to save VW. VW, like GM, is too big to fail.