In September, 2015, the world was just waking up to find that Volkswagen, the company most committed to selling diesel-powered passenger cars, had been lying about its so-called “clean diesel” technology for years. Not only did it create special software to fool emissions testers, it actually hired a laboratory in Albuquerque, New Mexico to lock monkeys in a clear plastic chamber to see what happened to them when they breathed a mixture of air and diesel exhaust fumes!
Let’s not get too high and mighty here, however. The German car industry relied on diesel sales for a number of years and Volkswagen was not the only manufacturer to cheat. Mercedes and BMW were also implicated by German authorities. In the US the government accused Fiat Chrysler of selling more than 100,000 diesel-powered vehicles that did not meet exhaust emissions standards. American pickup truck makers have also been caught up in the diesel cheating scandal. But Volkswagen’s lies were the biggest and most brazen. It practically defied regulators to catch it in the act. Even after the scandal broke, it allegedly hacked the software that was meant to fix the original problem.
The fallout was swift. Volkswagen stock plummeted and there were concerns it might actually go out of business. This all came to pass just months after it claimed the title of world’s largest automaker, snatching that distinction away from Toyota after years of trying. The fall from grace was swift and the aftermath economically devastating. Thousands of Volkswagen owners sued the company and many governments threatened criminal prosecutions. Eventually, the scandal cost the company more than €31 billion, with $10 billion going to fund clean air initiatives in the US. Electrify America, the North American EV charging network, was created as part of that settlement.
In a press release dated March 26, 2021, the Volkswagen Supervisory Board declared that an extensive review of what went wrong has been completed and that two former high ranking officials of the company will now be the target of legal action for the damages incurred. Usually in the workaday world, when things go wrong, the powers that be seek the lowest ranking person to blame. It’s how the world works. But in this case, the names mentioned are two of the company’s most senior officials — Martin Winterkorn, former chairman of the board for Volkswagen Group, and Rupert Stadler, former board chairman for Audi. Both are accused of “breaches of the duty of care under stock corporation law.”
The review process has been exhaustive and extensive. In all, more than 65 petabytes of data were secured and more than 480 million documents examined. 1.6 million files were identified as relevant, then screened and reviewed. More than 1,550 interviews were conducted during which people were questioned about their activities on behalf of the company. Investigation files from prosecutors and reports by the US Monitor, as well as official and judicial proceedings worldwide, were also evaluated and considered. “The investigation that has now been completed was by far the most comprehensive and complex investigation carried out in a company in German economic history,” the company says.
“Based on the outcome of this investigation, the Supervisory Board has concluded that Prof. Winterkorn breached his duties of care as former Chairman of the Board of Management of Volkswagen AG by failing, in the period from 27 July 2015 on, to comprehensively and promptly clarify the circumstances behind the use of unlawful software functions in 2.0l TDI diesel engines sold in the North American market between 2009 and 2015. Prof. Winterkorn also failed to ensure that the questions asked by the US authorities in this context were answered truthfully, completely and without delay.
“The Supervisory Board also concluded that Rupert Stadler breached his duties of care by failing, in the period from 21 September 2016 on, to ensure that 3.0l and 4.2l V-TDI diesel engines developed by AUDI and installed in EU vehicles of Volkswagen, AUDI and Porsche were investigated with regard to unlawful software functions.”
When this all went down, I was moonlighting as a writer for Ecomento, a German electric car blog. The publisher was distraught. He told me that in Germany, engineers are held in high esteem and top engineers are treated as gods. Martin Winterkorn was very much a national hero and his involvement in the scandal was a blow to the entire nation.
Winterkorn and Stadler will be the subject of legal claims for damages, but they are not alone. The investigation also names Ulrich Hackenburg as a person who breached his duty under stock corporation law. If Winterkorn was the public face of the company, Hackenburg was the one down in the trenches creating the manufacturing systems that made Volkswagen so successful. He spearheaded the team that created the MQB platform, the toolkit that formed the basis for all those transverse engine front-wheel drive Golfs, Jettas, and Passats that brought Volkswagen to the forefront of the industry. He was the production guy behind Winterkorn’s success. Shortly after Dieselgate broke in 2015, he simply disappeared from the company, never to be heard from again — until now.
No matter how wealthy these former corporate leaders may be as a result of being at of near the top of one of the world’s most successful corporations, none of them could possibly repay the losses the company experienced as the result of its diesel cheating scheme. The most that will happen is they may have to adjust their retirement plans somewhat. Maybe sell a megayacht or two. Neither one is likely to wind up homeless or eating at soup kitchens.
But every cloud has a silver lining. If it were not for the train of events set in motion by their actions, Volkswagen would probably not be one of the leaders of the EV revolution today. The world of transportation would be a poorer place had Volkswagen not recast itself as a champion of battery electric cars. We can debate whether the ID.4 is or is not a worthy rival to the Tesla Model Y, but there is no debate that Volkswagen will be a vital part of the automotive industry going forward. There was a moment in time when that was far from certain.
Volkswagen has always used clever ad campaigns to promote its products. None was more successful that this ad for the diesel-powered Passat. If only its “clean diesel” promise had been true…