Monday, November 09, 2015

Is VW the Only Auto Manufacturer To Put Profit Before Integrity?

You must know about this unprecedented crime by the world’s second largest auto manufacturer. It has been headline news for many weeks now, and the news keeps getting worse. Just in case you’re from “another planet”, Volkswagen cheated on the Environmental Protection Agency’s (EPA) rules for emissions in diesel engines. As if that wasn’t bad enough, they also cleverly installed software in their diesel cars that hid this fact from anybody testing emissions. VW, not only committed a crime but then committed a second crime to hide the first crime! Volkswagen fired their CEO and promoted the CEO of Porsche (owned by VW) to be the new CEO of VW. It has recently been discovered that the same crimes were committed by Porsche and Audi (also owned by VW). 
Now the focus is on the famous question, “Who knew what, and when did they know it?” Hopefully there will be a thorough investigation and VW will not get away with furnishing a few sacrificial lambs from middle management or engineering to “take the fall”. A crime this big and wide spread cannot have been known by only a few. As drastic as this may sound, I think there is a very real possibility that most of VW’s executives and many of the rank and file were privy to this dirty big secret. 
My reasoning for thinking this is that the entire auto industry has been amazed and skeptical for the past 3 years over how Volkswagen had designed and built a diesel engine that was so clean, powerful, and economical when no other manufacturer has come close. VW can brag all they want about “German Engineering”, but over the last 50 years American and Japanese engineering have become the standard. In fact, I’m astounded that no other manufacturer suspected and objected. It’s possible that the reason for this is that they knew how VW was accomplishing and getting away with this and planned on doing the same thing…or maybe they already were. The British newspaper, The Guardian wrote “The issue is a systemic one” across the industry quoting Nick Molden, whose company Emissions Analytics tested the cars. The Guardian revealed that diesel cars from Renault, Nissan, Hyundai, Citroen, Fiat, Volvo and Jeep all pumped out significantly more NOx in more realistic driving conditions.
I wouldn’t be the least bit surprised to learn that the same tricks have been used to manufacture gasolinepowered vehicles to meet emissions standards. As you probably know, the more stringent the EPA restriction on emissions, the more difficult it is for a manufacturer to produce a car with acceptable performance and fuel economy. Performance and fuel economy is what sells cars…low emissions play second fiddle. Also, the federal rules on fuel economy, “Corporate Average Fuel Economy” standards (CAFE) are extremely challenging and expensive for auto manufacturers. The federally mandated average fuel economy for all cars by 2025 is 54.5 miles per gallon. The fine for not meeting this standard is $55 for each mile per gallon missed times the total number of vehicles manufactured. Some manufacturers have been fined hundreds of millionsof dollars. BMW and Mercedes were fined $231M and $262M respectively!
Auto manufacturers are “caught between a rock and a hard place”. They must comply with EPA emission standards and CAFÉ fuel economy standards which are at odds with each other…the cleaner the emissions, the worse the fuel economy. If that isn’t enough, they must build a car that people want to buy and a car’s performance is the number one reason a person buys a car. Good fuel economy and low emissions are both detrimental to good performance. 
Survival is the #1 instinct in humans and corporations. If auto manufacturers believe the only way they can compete in the market place is to cheat on federal standards, there’s a good chance they will. Furthermore, if an auto manufacturer is trying to compete honestly but strongly suspects, or knows, that his competitors are cheating and getting away with it, he may feel he is left with no other recourse but to cheat as well. 
On a side note, I find this to be a primary motivation for car dealers who cheat their customers with unfair and deceptive advertising and sales practices. I know many well intentioned dealers who would much prefer to sell cars honestly, but believe they have no choice but to match their competitors’ bait and switch tactics to compete successfully.

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