Posted by: Sherry Hume, ECO Canada
By now pretty much everyone has heard about the Environmental Protection Act (EPA) and its claim that the German automobile manufacturer Volkswagen has been knowingly defeating emissions testing. Aside from the obvious costs associated with further investigations and resolving the issues with the vehicles in question; what are the long-term repercussions?

The reason for emission testing

Emission testing provides car manufacturers with an emission standard to ensure that different engines or vehicles fall within the parameters of acceptable exhaust emissions released upon operation. In an effort to protect the environment and prevent adverse health issues, many countries are beginning to adhere to stricter emissions standards – and the first step is at the manufacturing stage.

Volkswagen’s offense

The German car manufacturer that has long been known as a “green company” has admitted to cheating emissions tests. This was accomplished by installing detection software devices in some of their diesel engines. These devices could detect when they were being tested and then change performance – thereby improving results. VW has admitted that about 11 million diesel models worldwide are fitted with this device.

The consequences

• Impacting employment and supply chains in the Canadian Market:

After-market manufacturers will possibly begin feeling the fallout if consumers decide to avoid Volkswagen Group. The secondary market of the automotive industry, including distribution, retail, installation of vehicle parts, fluids and chemicals, equipment, and accessories may begin to feel the effects – but even more so if other big-name car companies were found to be guilty of the same charges. For the moment however, employees of the Canadian branch of the German automobile manufacturer are probably concerned with the future of their jobs.
 

• Casting suspicion on other vehicle manufacturers:

The EPA has informed other vehicle manufacturers that the investigation into emission defeat devices will spread out to more companies and models. Depending on what they find, this could affect the automobile industry on a much larger scale. As it stands, with this extra investigation there could be a delay in getting those models out into the market. Even companies that are found to be compliant to emission regulations could suffer financial setbacks and delays. Check; Kroger Weekly Ad, ALDI Weekly Ad, ALDI Catalogue, IGA Catalogue, Meijer Weekly Ad, Publix Weekly Ad, Coles Catalogue, Supercheap Auto Catalogue.

• Weakening the authority of the Volkswagen Group board:

The German manufacturer has formed a committee that will closely follow and monitor further investigations in regards to how far up the ladder the manipulation of emissions actually reaches. Although previous CEO Martin Winterkorn stepped down, he has claimed no wrong-doing on his part. Under the guidance of the Supervisory Board, an external investigation is being conducted by the US law firm Jones Day.

• Triggering changes in policy, legislation and compliance:

Not only has the EPA said that it will be testing more vehicles from other manufacturers, but they will also be beefing up the testing process – including road tests. However, that is only the beginning as they have also said that they will begin testing gasoline vehicles as well. Of course improved and more rigorous testing will vary from country to country and it remains to be seen how these changes will affect future policy. In some cases, such as in Europe, real road driving testing has been implemented in response to the use of lighter materials and other methods of reducing emissions. Many vehicle manufacturers have claimed that stricter testing comes with additional costs which are transferred to the consumer, but the end usually justifies the means. When automotive companies were forced to create vehicles that ran on unleaded gas, there was a huge outcry – but it was done. When they were asked to increase fuel efficiency in their models, they came through, grudgingly – but they continue to do so all the time. Likewise, being forced to adhere to emissions requirements is something that was already expected and should prove achievable – if manufacturers want consumers to buy their vehicles.
 

• Damaging health and the environment:

The reasons for emission testing is to ensure that air quality is maintained and pollution is minimized. One particular pollutant, Nitrogen Oxide, has been linked to health issues such as emphysema, bronchitis and other respiratory diseases. When companies try to bypass emission testing there can be consequences other than just a loss of consumer trust.

Unfortunately this is not an isolated case

The ethics of large corporations are often called into question, and when one shows unscrupulous practices, it often paints all the others with the same brush. It’s unfortunate as there are many companies out there that adhere to the rules and run principled businesses. However, Volkswagen isn’t the first car company to fall from public grace.
In 2014 General Motors ended up recalling millions of vehicles due to a deadly ignition-switch defect. Unfortunately the auto manufacturer had known about the problem for 10 years and according to media reports, as a result there were 124 deaths related to the defect.
Another safety issue in the news was the recall of millions of Honda vehicles due to defective airbag inflators that were blamed for eight deaths and more than 100 injuries worldwide. However, this problem wasn’t limited to just Honda; a variety of Japanese, American and German automakers also used the defective airbags in their vehicles as the airbag maker Takata distributed to multiple car manufacturers. Although this issue was recently publicized, there had been ongoing recalls for this problem and these airbags for several years.

The brighter side

Although the Volkswagen emission test defeaters pose an environmental risk, thankfully they don’t pose an imminent threat to owners of the vehicles affected. The silver lining in this story is that between the California Air Resources Board (CARB), the ICCT and the EPA the deception was brought to light. This just goes to show how important these types of agencies are – as we look to the future they will serve to make large corporations think twice about cutting costs at the expense of consumers and the environment.

The timeline

2014: The International Council on Clean Transportation (ICCT) launches investigation/study into regional emissions discrepancies.
2015: September 18 – the Environmental Protection Agency (EPA) issues a “Notice of Violation” to the Volkswagen Group, outlining its discovery of emissions “defeat devices” in several of the company’s diesel vehicles.
2015: September 22 – Volkswagen Canada suspends sales of affected vehicles in a “stop sale” order. Volkswagen Group releases a press release stating that approximately 11 million vehicles worldwide are affected.
2015: September 23 – Volkswagen CEO Martin Winterkorn resigns in the wake of the scandal.
2015: September 25 – the EPA releases a letter to vehicle manufacturers notifying them that the agency is adding to its confirmatory testing additional evaluations designed to look for potential “defeat devices” – attempting to discover if companies other than Volkswagen are engaged in similar deceptive practices.
2015: October 7 – German newspaper, the Frankfurter Allgemeine Zeitung quotes Volkswagen’s new CEO, Matthias Mueller as saying that hopefully the recall of nearly 11 million vehicles will begin January 2016, with all vehicles being retrofitted by the end of the year. However he also says that 482,000 cars sold in the U.S. must still win regulatory approval for the planned retrofit.
2015: October 15 – German authorities pass a ruling for the mandatory recall of affected vehicles, a unique step considering most recalls in the past have been voluntary and driven by auto manufacturers themselves.
To find out which models were affected, visit:
http://www3.epa.gov/otaq/cert/violations.htm