Volkswagen Deliberately Modified Nearly Half a Million Cars to Evade US Smog Standard

[JSt0rm]

At least put the /sarcasm tag at the end...someone might think you're serious.

 

[RampantAndroid]

This thread didn't take long to degenerate into stupid gifs. Wheeeeeee.

 

[JSt0rm]

This thread didn't take long to degenerate into stupid gifs. Wheeeeeee.

relax dummy.

 

[LegendKiller]

This is one of the stupidest things I've ever heard in my life.

That said, VW is incredibly important to the German economy, and by extension, the European economy. This scandal is big enough to end VW as a going concern. http://www.marketwatch.com/story/can-volkswagen-pass-its-emissions-test-2015-09-22

Rather than the huge fines, I'd love to see some kind of arrangement where the US and other victimized countries each get a small equity stake in VW, including warrents for additional equity if VW recovers. The people that were involved in the fraud should be (and probably will be) prosecuted by Germany and corporate officers replaced. Eventually the US and other nations sell back their stakes and things can go back to normal like they did with the auto industry and financial industry recently.

This will not end VW as a going concern. They have over $20bn in cash and generate over $7.5bn/yr of free cashflow. The likelihood that any country will make a fine big enough, or all countries combined, to take down VW is low.

CDS for VW are now indicating a 20% default probability. I think this is high since it likely doesn't include the high probability of a government bailout or assistance if it got too ridiculous.

 

[LegendKiller]

From talking to someone at Chaplin's VW/Subaru, they seem to be saying that the fix won't effect performance or gas mileage, and does not effect Audi cars, either. Not sure I believe all of this, though.

This makes absolutely no sense. If it didn't effect anything why do it in the first place? It has to effect things, massively. Otherwise why do it? Only other thing I could find is that other technologies, such as liquid urea, would have cost too much and taken up too much space.

 

[Zorba]

This makes absolutely no sense. If it didn't effect anything why do it in the first place? It has to effect things, massively. Otherwise why do it? Only other thing I could find is that other technologies, such as liquid urea, would have cost too much and taken up too much space.

Especially considering the fix hasn't been released yet, how would the dealership have any idea? The dealer is saying whatever they need to to keep selling their cars. No one would buy a new VW if the dealer was saying, "Yeah the MPG will decrease by 25%."

 

[Jhhnn]

This will not end VW as a going concern. They have over $20bn in cash and generate over $7.5bn/yr of free cashflow. The likelihood that any country will make a fine big enough, or all countries combined, to take down VW is low.

CDS for VW are now indicating a 20% default probability. I think this is high since it likely doesn't include the high probability of a government bailout or assistance if it got too ridiculous.

Agreed. Nobody's killing VW over this.

Chances are that the cars pass emissions standards in all countries other than the US in either mode of operation. US standards are particularly strict for NOX.

 

[LegendKiller]

Agreed. Nobody's killing VW over this.

Chances are that the cars pass emissions standards in all countries other than the US in either mode of operation. US standards are particularly strict for NOX.

VW has already come out and said that a small portion of the 11mm are actually effected by the software.

I think, at this point, they are shitting their pants enough that they are telling the truth. That tends to happen when you lose a few tens of billions in market cap in 2 days.

 

[Jhhnn]

Especially considering the fix hasn't been released yet, how would the dealership have any idea? The dealer is saying whatever they need to to keep selling their cars. No one would buy a new VW if the dealer was saying, "Yeah the MPG will decrease by 25%."

Negative effects on performance, mileage & driveability will likely be small.

 

[Zorba]

Negative effects on performance, mileage & driveability will likely be small.

If they were insignificant, they wouldn't have done it. If they are significant, no dealer is going to say so unless they are forced.

When I worked on jet engines, there is a big performance hit if you reduce NOx without changing the engine technology. You basically have to reduce the combustion temperatures, which is a very important parameter in efficiency.

I doubt it'll be a 25% knock down, but I am sure it'll be noticeable, or they wouldn't have gone through the trouble of knowingly violating the law.

EDIT: It'll likely have a much bigger effect on acceleration, than cruise mileage, at least that is how it works on jets.

 

[Blackjack200]

This will not end VW as a going concern. They have over $20bn in cash and generate over $7.5bn/yr of free cashflow. The likelihood that any country will make a fine big enough, or all countries combined, to take down VW is low.

CDS for VW are now indicating a 20% default probability. I think this is high since it likely doesn't include the high probability of a government bailout or assistance if it got too ridiculous.

It all depends on the fallout. How does this impact reputation, sales etc. The 2016 models are not approved in the US.

A bailout is possible, but there's no guarantee the bailout terms wouldn't involve some kind of write down for VW's creditors.

And that's another problem: VW's cost of capital is going to jump. I think the German govt. should step in quickly if there's any sign that VW is losing access to credit.

 

[LegendKiller]

It all depends on the fallout. How does this impact reputation, sales etc. The 2016 models are not approved in the US.

A bailout is possible, but there's no guarantee the bailout terms wouldn't involve some kind of write down for VW's creditors.

And that's another problem: VW's cost of capital is going to jump. I think the German govt. should step in quickly if there's any sign that VW is losing access to credit.

The corporate IG market has seen yields jump for VW bonds. Securitization market has seen their bonds widen, but not hugely so. They will have access to credit, just at higher spreads.

 

[LegendKiller]

If they were insignificant, they wouldn't have done it. If they are significant, no dealer is going to say so unless they are forced.

When I worked on jet engines, there is a big performance hit if you reduce NOx without changing the engine technology. You basically have to reduce the combustion temperatures, which is a very important parameter in efficiency.

I doubt it'll be a 25% knock down, but I am sure it'll be noticeable, or they wouldn't have gone through the trouble of knowingly violating the law.

EDIT: It'll likely have a much bigger effect on acceleration, than cruise mileage, at least that is how it works on jets.

What is worth it to lie to regulators? You think that people high enough up didn't know this?

Think about it. Tests, retests, engineering reports...etc over 7+ years with turnover and everything else.

 

[Jhhnn]

If they were insignificant, they wouldn't have done it. If they are significant, no dealer is going to say so unless they are forced.

When I worked on jet engines, there is a big performance hit if you reduce NOx without changing the engine technology. You basically have to reduce the combustion temperatures, which is a very important parameter in efficiency.

I doubt it'll be a 25% knock down, but I am sure it'll be noticeable, or they wouldn't have gone through the trouble of knowingly violating the law.

EDIT: It'll likely have a much bigger effect on acceleration, than cruise mileage, at least that is how it works on jets.

I said small, not insignificant. It probably won't be any worse than on the dyno. I'm sure that the car mags will run before & after comparos.

 

[shira]

This is why the jobs-killing EPA must be abolished.


Edit: I guess I should make it clear that the above statement is sarcasm.

It's the same old right-wing story: Cut the budgets for federal agencies that protect the public, criticize those under-funded agencies for not adequately protecting the public, and then use that criticism as justification for further reductions in agency budgets.

Because big government.

 

[Zorkorist]

Because Big Debt.

How do you propose paying for all these things you propose?

Stick it to the Children, with ever more debt?

-John

 

[Turkish]

The VW revelations are not the first major case of a manufacturer cheating on emissions tests for diesel engines. More than a decade ago, government officials reached a $1-billion settlement with seven diesel engine manufacturers whom the EPA had charged with using similar devices that illegally bypassed emission control equipment.

The manufacturers, which built engines for tractor-trailers, agreed to pay $83.4 million in fines, $109.5 million to fund research into clean fuel projects, and at least $850 million to produce new, cleaner engines.

The West Virginia laboratory that caught VW cheating was built with money from those fines.

http://www.latimes.com/business/autos/la-fi-hy-vw-diesel-20150923-story.html

oh the irony...

 

[Jimzz]

It all depends on the fallout. How does this impact reputation, sales etc. The 2016 models are not approved in the US.

A bailout is possible, but there's no guarantee the bailout terms wouldn't involve some kind of write down for VW's creditors.

And that's another problem: VW's cost of capital is going to jump. I think the German govt. should step in quickly if there's any sign that VW is losing access to credit.

Looks like they did and hoped no one would notice...

Volkswagen scandal: German government 'knew about VW emissions test rigging - but did nothing to stop it':
http://www.telegraph.co.uk/finance/...wer-as-VW-emissions-fallout-deepens-LIVE.html


Revenge for NSA spying on Germany? :hmm:

 

[Blanky]

I hope this results in multiple prison terms, but that seems unlikely. The best we can probably hope for is that these very rich people are now somewhat less rich. Not justice, is it?

 

[norseamd]

But yes - I doubt the effect on the MPG and emissions will really be negligible. I also don't believe it's 40 times worse in emissions except in a few specific circumstances.

The emissions are 40 times worse in the productions of NO and NO2 which can convert into ozone and shit.

 

[Blackjack200]

Because Big Debt.

How do you propose paying for all these things you propose?

Stick it to the Children, with ever more debt?

-John

Raise tax rates back to before Bush's cuts.

Get rid of all favored rates for investing. Tax at regular income rates.

Pretty sensible tax policy.

 

[Thump553]

From talking to someone at Chaplin's VW/Subaru, they seem to be saying that the fix won't effect performance or gas mileage, and does not effect Audi cars, either. Not sure I believe all of this, though.

Classic case of blowing smoke-a car salesman who lies to you about something he knows nothing about in order to promote the product his livelihood depends on.

Next thing you know politicians are going to lie to us too.

Having owned two modern era VWs with their defect ridden electronics, I say burning the company down and plowing it's ashes under would be a net benefit for mankind.

 

[RampantAndroid]

relax dummy.

Classic case of blowing smoke-a car salesman who lies to you about something he knows nothing about in order to promote the product his livelihood depends on.

Next thing you know politicians are going to lie to us too.

Having owned two modern era VWs with their defect ridden electronics, I say burning the company down and plowing it's ashes under would be a net benefit for mankind.

Oh, I'm not saying I believed him...that said, my Audi is thus far reliable. And since I own an Audi...well, my vested interest is the value of my car (2.0T, not TDI) and continued service of my warranty. (my soon to be father in law has a 08 Jetta with their 5 cylinder engine, and I don't think he's had problems either.

 

[JockoJohnson]

Forget fines. Throw the people involved in jail. This shit with fining companies won't stop them from doing it again. Set an example and continue forward with prosecuting the people involved. The same should go with Wall Street corruption.

I don't think the programming decision was made by low-level peons. They took a calculated risk and probably had a $ amount in mind if they got caught. The fines have already been factored into their cost of doing business.

 

[Charmonium]

Forget fines. Throw the people involved in jail. This shit with fining companies won't stop them from doing it again. Set an example and continue forward with prosecuting the people involved. The same should go with Wall Street corruption.

I don't think the programming decision was made by low-level peons. They took a calculated risk and probably had a $ amount in mind if they got caught. The fines have already been factored into their cost of doing business.

Since it's Germany, I'd expect some criminal penalties. I don't expect anyone to actually do jail time but I'd like to see some criminal prosecutions. I'd like to believe they have a bit more moral responsibility than the US where we never prosecute bankers for fraudulent mortgage securities or laundering money for drug dealers (HSBC) or fixing Libor rates or . . . .