The various emissions standards and testing regimes in the US, EU and individual countries are complex. Like most of us I was only superficially informed by news reports about the VW scandal but not the background and long history of emission standards.
One thing I for instance learned in a lengthy conversation with a good friend in Germany was the fact that not only individual car and engine models have emission standards but the whole fleet of cars manufactured by one company have a standard. This allows manufacturers to build top-end high performance & emission cars when they also produce small low emission cars. They can offset the high with the low emissions to reach one fleet emission target.
The others are the different tests and results between testing stations where the car is stationary either idling or the wheels running in a steady pace on rollers and real road operation. One is basically a lab situation in a controlled environment while the other is real life motoring with the family, mother in law and the dog in the car in stop-and-go city traffic or up and down hill through the country. The latter producing much higher emissions.
VW as any carmaker had to accommodate two goals, which are almost mutually exclusive. Low fuel consumption and emissions on the one hand against performance and cost on the other. They apparently have the technology to meet the emission targets but at a cost of performance and higher production cost and a more cumbersome service regime. In order to avoid the latter they decided to just cheat on the emission side.
The background to all this is of course the desire of governments and regulators to reduce car emissions to improve our health and save the planet from global warming. But there is at least as much desire to accommodate the fossil fuel and car industry as there is for actual emissions reduction. The standards however must be met by hook or by crook.
In other words good intentions together with defunded shrinking governments relying on industry figures instead of its own or independent testing have led to these unintended nasty consequences.
VW cheating scandal
It is most instructive how this slow motion train wreck unfolded for VW. It was not government testing or control, which uncovered the cheats. It was an independent low cost organisation, which actually was after a good news story to demonstrate the benefits of these low emission diesel engines. They operated on a shoe string and had to borrow some of the cars from friends and drove them across country from LA to Chicago only to find out that the actual emission were many time higher than to be expected according to the manufacturer’s figures. They reported their findings to the US authorities, which in turn send a please-explain letter to VW. All this in 2014. Only earlier this year when US authorities threatened to withhold the necessary certification for selling their diesel cars in the US did VW wake up to the seriousness of the situation. Finally a few days ago they admitted to a computer programme, with which they had manipulated emission results by giving lab test/testing station figures instead of an actual road use figure.
In other words a low budget private organisation not government controls or testing and clever software engineers got the ball rolling. Not proper forensic investigation but pure threats forced VW to admit wrongdoing on a massive scale.
With that admission the proverbial hit the fan.
Not only did the share price of the world’s largest car maker tank by 40%. The rest of the world’s car industry big wigs have to change their underwear frequently in fear of the spotlight been shown on them for this and various other issues with their products. The list of wrongdoing even of a much more serious nature concerning safety is long.
In the special case of VW however the rest of the world of course loves to take the world beating German car industry down a peg or two. For the whole German industry the “Made in Germany” quality brand is under threat.
Lessons so far
A rude awakening for Germany and it’s economic and specifically industrial prowess. The country had come through the recent global financial crisis relatively unscathed. Unlike the UK, which its greater emphasis on the City of London’s funny money economy i.e. the banking industry, Germany is still producing stuff the world wants. Even I as a long time ex-German sometimes felt smug about the Anglo-American criminal shenanigans of the finance industry. Everyone seemed to agree and I learned the word at Berkeley already in 1969 that bankers were just banksters. Some friends were confident that the criminal justice system would deal with the global financial crisis. Then we learned about our financial institutions that they were not only too big to fail so the taxpayer had to bail them out. They also were too big to jail so the criminals at the top got off scott free.
But we still nurtured the illusion that even if Wall Street was crook Main Street – the real productive industries – was ok. Especially in Germany where there is the “Mittelstand”, often for generations family owned companies not under constant pressure of quarterly reporting, acting responsibly. VW is still being controlled by the families of it’s famous founder and designer of the original VW Beetle, Ferdinand Porsche.
Columnist Jakob Augstein in the German Spiegel magazine under the title “VW-Scandal and Capitalism: The Car ? The Fraud !“gives the reason why a highly successful company with 600,000 employees, 200 billion Euro revenue, 119 factories building every eights car in the world resorted to breaking the law : Greed.
Smug German industrialist thought of themselves superior to the Anglo-American finance industry with it’s fraud and deception by having orderly German rules, which all supposedly followed. However capitalism is the same in all sectors from finance to cars to pharma. Companies even if given human rights by the US Supreme Court have no human qualities like conscience nor morals. They are as Canadian film maker and law professor Joel Bakan describes in his book titled “The Corporation: The Pathological Pursuit of Profit and Power” (Free Press, 2004), designed to be psycho- or sociopaths.
The irony being that the US are by many – not unlike in the FIFA scandal – hailed as the saviour with their cowboy attitude to justice. In reality compared to the EU they don’t give a rat’s arse about the environment and global warming. They just don’t like to be lied to and good on them for reacting strongly.
One lesson should however be learned. Capitalism in order to survive needs a strong nation state to set the rules and police then. That is what Adam Smith the founding father of market economy stipulated and what today’s neoliberals perverting his theories and creating the monstrous capitalist system we live in have conveniently forgotten.
Any Surprises ?
The finance industry behaving like crime syndicates : No surprise, almost a given.
The rest of industries under the capitalist system also acting unethically, immorally and even criminally : No surprise.
The leading carmaker in the world with brands like Porsche, Bentley and Audi – the latter also affected with over two million cars – risking billions of dollars and not only their own survival as a company but the business reputation of their country as a whole with a scam, which was easily detected by low budget amateurs beggars believe. That nobody in the organisation looked at that risk and concluded that it could not possibly be worth it amounts to stupidity on a monumental scale.
To find stupidity on this scale in one of the leading manufacturers in one of the leading industrialised nations : The only surprise.
by Dr. Hans B. Grueber