It was American, not European, regulators who caught Volkswagen out. If the mis-measurement of pollution is so easily contrived, there will be political as well as commercial imperatives to distort (..)
Of course, there are important questions about exactly which executive knew what when – investigations need to root all that out with urgency. But having installed bespoke “defeat” software to reduce the pollution produced by its diesel engines during tests, and not out on the road, the company can hardly invoke the standard “sorry, our attention was elsewhere” excuse. No, this looks like very deliberate manipulation in the manner of Libor rigging. Figuratively, it is every bit as breathtaking, too – with the twist that, thanks to the effect of nitrous oxide on respiration, it could also play havoc with literal breathing. This tale is a rude reminder that commercial skulduggery is not the exclusive preserve of finance.
The most immediate implications are for the German company itself. Half a million vehicles were immediately recalled in the US, each potentially incurring a fine of up to $37,500, implying a theoretical maximum bill of $18bn-plus. And that’s before we get on to knock-on costs of compensating consumers, litigation and damage to a powerful brand that is built on reliability, not to mention another 10.5m vehicles worldwide, which VW conceded today could also end up being caught up in the scandal. Little wonder then that, at a stroke, this Saxon behemoth has just seen one-fifth of its value disappear out of its exhaust.
The next wave of questions affect the wider car industry. If it was this easy to clean up emissions for inspection, one has to wonder whether other manufacturers were at it too. The tobacco sector has a long and shaming history of damaging lungs while concealing the evidence; any motor manufacturers who have been doing something can expect to face similar disgrace. There are more particular questions about diesel engines. VW has been a commercial advocate, but many European governments have also been privileging the fuel through taxation because it tends to be more carbon-efficient than petrol. That is an important consideration, but it needs to be carefully weighed against other pollutants – nitrous oxide and sooty particulates. If the authorities have been operating on an incomplete picture here, then public policy will have been distorted.
Sourced through Scoop.it from: www.theguardian.com