VW Clean diesels.... how did they get them so clean?

[IslandTractor]

The argument is that the European standards are good enough and the EPA has gone to far.

I just heard some BMW diesels are also coming under scrutiny. We have two Chevrolet Cruze Turbodiesels that use a VM Motori 2L built in Germany but significantly modified and upgraded for US use. Hopefully GM played it straight. I like driving them and got 48.7 mpg on a trip to MD and back without really trying.

Someone proposed an $18 billion fine. One group already pusing back is the state of TN, who invested heavily in VW's plant there.

The $18 billion fine is simply a club that the EPA can hold over VWs head to insure that the manufacturer doesn't drag its heels in dealing with the problem they created. I doubt seriously the eventual fine, even though hefty, will be much more than half of that so long as VW behaves and does the right thing. EPA doesn't want to kill VW for any number of reasons. If VW is dead then who deals with the TDIs on the road today? If VW is dead then we lose a lot of jobs at dealerships and in Chattanooga as well as leaving millions of orphan VW gas cars on the roads. I don't think it is in anyone's interest, other than perhaps BMW or Mercedes, to see VW die. Twist in the wind perhaps, but die, not so much.

 

[IslandTractor]

VW was already road kill in the US. They were #1 in the world, and #14 in the US with 2.1% YTD. Volkswagen Group has 3.5% and Audi and Porsche were up a bit. 25-40% of VW sales were diesels so low fuel prices and this fiasco are going to slaughter their little remaining market share. Presumably the Audi diesels are also affected.

Subaru, which most people outside the snow belt have seldom seen let alone buy, now outsells VW in the US market by 50%.

USA Auto Sales Brand Rankings - August 2015 YTD - GOOD CAR BAD CAR

I didn't realize VW was doing so poorly in the US. As you know in the New England region VWs are quite common (but not as common as Lesbarus!) They had a tough time with quality just as Toyota and other Japanese companies were closing in on perfection in the 1990s and the US companies were improving too. The other big knock on VW has been the relatively poor dealer network and expense of repair/maintenance. Generally very fine engineering and driveability but expensive to own. My first new car was a 1977 Rabbit which served me well and was a blast to drive. I came close to buying a Passat TDI this summer but didn't because of the high maintenance costs down the road. Still, I like the cars and I'm honestly sorry to see VW shoot themselves in the foot.

 

[hutchman]

I agree. EPA barely had passenger vehicle diesel on their radar until that past year or so when this VW thing came up. They have much bigger fish to fry. Recall that the EPA had lower diesel emission standards than CA (and other states like MA that adopted CA standards). As I recall in 2007 you could buy a Mercedes diesel anywhere in the US except CA and MA.

The persistent emotional hatred of the EPA by the right wing needs to be considered as simply a political, not a rational, statement. The reactionary and frankly intellectually lazy anti EPA attitudes that are regurgitated daily in the echo chamber are not going to help deal with situations like those posed by VW. "Don't tell me what to do" or "we didn't do it this way when I was growing up" is a rather childish approach to the environment. I do understand that folks in Wyoming don't understand why they should be held to the same standards for air quality control as California but then I also understand why the 38 million people in California are sometimes angry that the half million people in Wyoming have equal influence in the Senate. It goes both ways. We have national standards and a national organization (EPA) to maintain environmental standards because, simply, we are a nation and history has taught us that we need standards. Who else is going to insure that trucks don't belch smoke or that car companies play on a level and relatively clean field? Corporations will gladly rape the land, air and water to secure their own profits. The superfund sites were not created by the EPA, they were created mostly by profit seeking companies operating in the commercial environment that preceded the creation of the EPA. And yes, even government needs to be held to EPA standards as is obvious from nuclear and military toxic waste disposal problems. If one company is honest then they will be overwhelmed by the companies that are willing to bend or break the rules. EPA, with teeth, serves as a referee to insure that environmental fouls are called and penalized. Why is that so hard to understand?

Well, when you cut coal power plants but then they have to be brought back online to meet winter electricity demand or people die without heat ... that tells you you have a problem with reality. That's just what happened last winter and it could be worse this winter but this time around there will be more problems as you can't bring some of the plants back online to meet demand if this winter is like last one. This is just one article ... there were many:
"Clean Power" Rule Could Cause Electricity Shortage | RealClearPolitics
http://www.nytimes.com/2014/03/11/business/energy-environment/coal-to-the-rescue-this-time.html
Coal-Burning Power Plants Close: Prepare for Blackouts | Wall Street Daily

... they are out of control. But I guess it's OK for people to die because you don't like coal. I'm all for doing the right thing and having standards (that make sense and are based on something real) but you can't go cold turkey and cut off decades old energy sources and just say "Oh, it will be OK" or "it's necessary that electricity costs rise" ... when you can't back fill their capacity if global warming doesn't happen like you predict. These all have second and third order effects that nobody considers until its too late.

There used to be 5 carb states where you could not buy a new diesel, it had to be used with a certain number of miles on it. VW's last model year was 2006 before they took time off to come out with something that would meet the 2007 ULSD standards. I don't know how you can say they weren't busy with diesel when they were driving all of this which led to several years where you couldn't even buy a diesel if you wanted to.

"The persistent emotional hatred of the EPA by the right wing needs to be considered as simply a political, not a rational, statement" I don't hate anyone and the things I've mentioned are anything but "rational" which is why I mentioned them in the first place. People need to wake up to the insanity that has been going on. (Edit) which is why I started an entertaining thread about it

 

[Ford850]

The $18 billion fine is simply a club that the EPA can hold over VWs head to insure that the manufacturer doesn't drag its heels in dealing with the problem they created. I doubt seriously the eventual fine, even though hefty, will be much more than half of that so long as VW behaves and does the right thing. EPA doesn't want to kill VW for any number of reasons. If VW is dead then who deals with the TDIs on the road today? If VW is dead then we lose a lot of jobs at dealerships and in Chattanooga as well as leaving millions of orphan VW gas cars on the roads. I don't think it is in anyone's interest, other than perhaps BMW or Mercedes, to see VW die. Twist in the wind perhaps, but die, not so much.

Unfortunately, it won't be limited to the EPA fine. With the list of class action law suits filed in the US, it could drag on and be in the press for years, choking their sales. They would be better off settling these swiftly, and moving on so they can begin to rebuild their reputation. The media would love a good messy scandalous ordeal that dragged on for years.

 

[IslandTractor]

Unfortunately, it won't be limited to the EPA fine. With the list of class action law suits filed in the US, it could drag on and be in the press for years, choking their sales. They would be better off settling these swiftly, and moving on so they can begin to rebuild their reputation. The media would love a good messy scandalous ordeal that dragged on for years.

I agree and that is one reason that EPA won't bill them for the full 18 billion as it could put them out of business.

One other factor though that is interesting to consider is that unlike many publicly traded corporations, the amount of stock held by smaller or even institutional investors is pretty small. Less than 10% of the stock is owned by individuals or institutional investors outside Germany. A huge amount of VW is owned by one family (Porsche), one country (Qatar) and one German state (Lower Saxony). If VW did go belly up it is highly likely it would do so like GM did with the German government bailing them out, making changes and selling off the parts. I would imagine Porsche and Audi would be pretty easy to sell off and even VW itself after reorganization might be an attractive long term business venture if sold at a reasonable discount.

 

[ruffdog]

This article estimates the additional NOx being spewed by these VW's. In the US, 482k cars = 5800-14200 extra tons of NOx. Worldwide, 11 million cars=86800-212500 tons of NOx. It is a wide range because the vehicles are 10-40 times over the limit and the difference of miles driven. They also estimate the human deaths this will cause.
How many deaths did Volkswagen's pollution scandal cause? - Vox

 

[Ford850]

This article estimates the additional NOx being spewed by these VW's. In the US, 482k cars = 5800-14200 extra tons of NOx. Worldwide, 11 million cars=86800-212500 tons of NOx. It is a wide range because the vehicles are 10-40 times over the limit and the difference of miles driven. They also estimate the human deaths this will cause.
How many deaths did Volkswagen's pollution scandal cause? - Vox

I read some quotes from dealers saying "At least VW didn't kill people like GM and the ignition switch". I guess that thought is not quite valid.

 

[IslandTractor]

Interesting details about how VW managed the faked testing: Volkswagen Said to Manage Faked Test Results From Germany - Bloomberg Business

 

[sseelhoff]

Trying to get a handle on what the damages might look like. Went back and reviewed the SCOTUS decision on punitive damages from Exxon Valdez case.

Justice David H. Souter, writing for the majority in the 5-to-3 decision, said a ratio between the two sorts of damages of no more than one-to-one was generally appropriate, at least in maritime cases. Since Exxon has paid about $507 million to compensate more than 32,000 Alaska Natives, landowners and commercial fishermen for the damage caused by the spill, it should have to pay no more than that amount in punitive damages, Justice Souter said.

Even though they seemed to limit the 1:1 ration to maritime, let's assume they hold this to other types of cases.

500,000 cars sold in the U.S. Using an average MSRP of $25,000 per vehicle, the buy back would cost $12.5 billion, and then another $12.5 billion in puntivies. That's the floor. DTPA calls for treble (three times) the actuals, so it could look more like $12.5 billion + $37.5 billion + attorney's fees in civil damages in the U.S. alone. This does not include EPA fines, which can be as high as $37,500 per vehicle. That's likely to be negotiated much lower, but still likely to be significant. The bigger damages are really overseas, where there are 11 million units on the road.

Also thinking about Dow-Corning and the implant litigation. They were forced into bankruptcy as a result of lawsuits stemming from those claims. Don't see where VW would be immune from being forced into the same situation.

 

[IslandTractor]

Trying to get a handle on what the damages might look like. Went back and reviewed the SCOTUS decision on punitive damages from Exxon Valdez case. Even though they seemed to limit the 1:1 ration to maritime, let's assume they hold this to other types of cases. 500,000 cars sold in the U.S. Using an average MSRP of $25,000 per vehicle, the buy back would cost $12.5 billion, and then another $12.5 billion in puntivies. That's the floor. DTPA calls for treble (three times) the actuals, so it could look more like $12.5 billion + $37.5 billion + attorney's fees in civil damages in the U.S. alone. This does not include EPA fines, which can be as high as $37,500 per vehicle. That's likely to be negotiated much lower, but still likely to be significant. The bigger damages are really overseas, where there are 11 million units on the road. Also thinking about Dow-Corning and the implant litigation. They were forced into bankruptcy as a result of lawsuits stemming from those claims. Don't see where VW would be immune from being forced into the same situation.

You don't mention the class action suits. I understand at the moment there are already about 60 of those and I presume the state's attorneys general will have suits as well. I'd be surprised if some group of dealerships doesn't sue too.

There are going to be some rich lawyers at the end of the process.