Category Archives: Volkswagen

EU Imposes $3.2 Billion Fine on Truck Makers

As reported by The Huffington Post, the EU has imposed major fines of a record $3.2 billion on four truck makers for their illegal participation in a cartel. The truck makers were found guilty of conspiring to fix prices and working together to delay the introduction of new emissions technologies for vehicles in 1997. The EU antitrust regulators also found that the truck makers inappropriately passed on the cost of the new emission technologies to consumers. Before this most recent fine, the largest prior fine ordered by the European Competition Commissioner was for 1.4 billion euros against a TV and computer monitor tubes price-fixing cartel.

European Competition Commissioner Margrethe Vestager spoke to the press about the imposition of the fine and the commission’s finding on the lack of competition between the largest truck makers in the industry. She said that MAN, Volvo, Daimler and Paccar should all be competing against each other to enhance environmental performance. The companies agreed to a settlement in which they admitted their wrongdoing in exchange for a 10 percent reduction in the total penalties. The largest fine was levied on Daimlier at 1.01 billion euros. MAN, which is owned by Volkswagen, avoided a fine because it reported the cartel to the commission.

The Euro VI standards aim to reduce the emission of nitrogen oxides and require substantial investment by truck makers in eco-friendly technologies, including exhaust treatment filters. The first iteration of the European pollution standards were released in 1993 and require all vehicles to comply.

Lawsuits Claim VW CEO Knew of Fraud

Three U.S. states filed civil lawsuits against Volkswagen on Tuesday, accusing the German automaker of violating environmental laws. In separate but virtually identical suits, New York, Maryland, and Massachusetts leveled claims of fraud that extended to the very top of the company’s boardroom.

The accusations fly in the face of statements VW made last year. According to Martin Winterkorn, the former chairman of the board of directors, equipping 11 million vehicles with software to cheat emissions tests were grave errors made by just a handful of employees. He added that top executives were oblivious to the deception.

But the three attorney generals driving the lawsuits claim that many executives were aware of the orchestrated fraud. In one specific instance, the complaint suggests that chief executive officer Matthias Müller knew the company decided not to equip Audi vehicles with equipment required to meet clean-air standards in the U.S. as far back as 2006.

The complaint says the systematic scheme to cheat emissions tests was a cost-saving measure. Through the use of six different devices, the world’s second largest automaker was able to avoid overhauling vehicles sold in the U.S.

The scandal, known as “Dieselgate”, has already cost VW billions of dollars. Last month, the automaker settled claims with U.S. owners and regulators by agreeing to pay $14.7 billion. However, that resolution does not prevent individual states from seeking penalties.

The company is already holding discussions to design a settlement that would resolve its environmental issues across the U.S.