Once again, new revelations about the illegal and deceptive practices of German car makers Volkswagen, Daimler and BMW attract media and public scrutiny. A few recent highlights:
Fortune reported that “Volkswagen’s CEO said he was ‘stunned’ by reports the carmaker had sponsored tests that exposed monkeys and humans to toxic diesel fumes and two years after an emissions cheating scandal, pledged once again to get to the bottom of the wrongdoing. Europe’s largest automaker has come under fresh scrutiny after the New York Times said last week that Volkswagen and German peers BMW and Daimler funded an organization called European Research Group on Environment and Health in the Transport Sector (EUGT) to commission the tests. The report came more than two years after VW admitted to cheating U.S. diesel emissions tests, sparking the biggest business crisis in its history, and pledged sweeping changes to ensure such misconduct never happened again.
The New York Times reported that in 2014 scientists in an Albuquerque laboratory conducted an unusual experiment: Ten monkeys squatted in airtight chambers, watching cartoons for entertainment as they inhaled fumes from a diesel Volkswagen Beetle. The details of the Albuquerque experiment have been disclosed in a lawsuit brought against Volkswagen in the United States, offering a rare window into the world of industry-backed academic research. The organization that commissioned the study, the European Research Group on Environment and Health in the Transport Sector, received all of its funding from Volkswagen, Daimler and BMW. It shut down last year amid controversy over its work. It also produced a skeptical assessment of data showing that diesel pollution far exceeded permitted levels in cities like Barcelona, Spain.
According to The Washington Post, the study by the European Research Group on Environment and Health in the Transport Sector (EUGT) was never published, and the research institute overseeing it has since been dissolved. All three carmakers involved in the study — Daimler, BMW and Volkswagen — distanced themselves from the research after the studies were disclosed. But the research institute behind the controversial tests on monkeys was founded by Daimler, BMW, Volkswagen and automotive components supplier Bosch, which has raised questions over the extent to which experiments with humans was backed by the three major carmakers, too.
Another account of the VW diesel emissions is featured on a new Netflix series “Dirty Money” an investigative series that exposes “brazen acts of corporate corruption and greed.” The first episode, Hard NOx, examines the VW deception on emissions.
A cloud of suspicion hanging over Volkswagen thickened, reports The New York Times, after a lawyer for a jailed former engineer said his client implicated top managers of the German carmaker’s Audi luxury brand in a continuing diesel cheating scandal. Statements and evidence provided to German investigators by the former head of thermodynamics in Audi’s engine development department suggest that knowledge of emissions fraud reached higher in the ranks of management than Volkswagen has admitted. No members of the company’s management board have been charged, although investigations are continuing.
Germany’s high-end carmakers face a potentially destructive new scandal after European antitrust authorities said on Saturday that they were looking into allegations that Volkswagen, Daimler and BMW colluded illegally to hold down the prices of crucial technology, including emissions equipment, reports The New York Times. The emissions scandal, which came to light nearly two years ago, may now be spreading to rivals. Growing awareness of the harmful effects of diesel fumes has prompted European cities to consider bans of diesel cars and has led consumers to reject cars with diesel engines, a largely German innovation that traditionally accounted for half the market. The backlash could take on a new, far broader dimension if it turns out that the excess emissions were the result of illegal collusion by a de facto cartel. The investigation could also lead to billions of euros in fines.
A report in Environmental Health Letters estimates that 1,200 people in Europe will die prematurely because of excess nitrous oxide emissions released in Germany after Volkswagen installed “defeat device” software that allowed the cars to cheat on emissions test. The MIT authors also estimate that by recalling and repairing the affected cars in Germany to meet current emissions standards by the end of 2017, Volkswagen could avert 2,600 additional premature deaths and save 4.1 billion euros in health costs.
Full citation: Chossière GP, Malina R, Ashok A, et al. Public health impacts of excess NOx emissions from Volkswagen diesel passenger vehicles in Germany. Environ. Res. Lett. 2017; 12:1-14.
Ever since Volkswagen Group confessed last September to cheating diesel emissions tests on an unprecedented scale, reports Automotive News Europe E-Magazine, Europe’s auto industry has scurried to contain the reputational fallout from the public health risk and to deflect criticism from a technology deemed critical to meeting CO2 reduction targets. Facing an uphill battle to preserve support, automakers have rallied around one simple message: The latest Euro 6 diesels into which they have sunk billions of euros are among the cleanest, most efficient around and without them there would be no chance of curbing fleet CO2 emissions. But a cloud of suspicion has descended on the industry that has left automakers struggling to shape the public debate. More red tape, stricter testing regimens and greater scrutiny as a result of the VW Group’s fraud are only the beginning.
US PIRG reports that the House is taking action on HR 1927, The Fairness in Class Action Litigation Act of 2015. The bill would in effect wipe out the class action mechanism by requiring all victims to suffer the exact same injury or harm in “type and scope.” For example, if a VW “Defeat Device” reduces the value of a 2011 diesel by $2000 but a 2010 diesel by only $1000, the two owners couldn’t join the same class, even though class actions are really the only way to hold VW accountable to its customers. As Joanne Doroshow of New York Law School’s Center for Justice and Democracy states: “Classes inherently include a range of affected individuals, and virtually never does every member of the class suffer the same scope of injury even from the same wrongdoing. H.R. 1927 will wipe out one of the most important tools for justice in America.” Read PIRGs 70-group letter of opposition sent to the House.
Several European health and environmental groups have written to European leaders saying that in cheating on emission control, Volkswagen has “intentionally misrepresented and manipulated data for years to undercut standards which were put in place to protect our health and the environment.” They urge the European Union to “improve its capacity to protect European citizens from air pollution and the fraudulent behaviour of companies.”
By Nicholas Freudenberg, Founder, Corporations and Health Watch
Readers of Corporations and Health Watch are familiar with the argument that the corporate practices that harm health are for the most part perfectly legal. However, recent media coverage of the scandals at Volkswagen and Johnson & Johnson led me to ask why some businesses choose to break the law. In the first, documented thoroughly in Steven Brill’s 15 chapter “docuserial” America’s Most Admired Lawbreaker posted last month on the Huffington Post Highline, the drug and medical device maker Johnson and Johnson (J&J) promoted Risperdal, an antipsychotic drug approved by the FDA for treating schizophrenia to children and older people for a much wider set of indications than those approved by the FDA. In 2013, Johnson & Johnson agreed to pay more than $2.2 billion in criminal and civil fines to settle accusations that it improperly promoted Risperdal.
Continue reading Why VW and Johnson & Johnson Crossed the Line: Towards a Theory of Corporate Law Breaking
The Wall Street Journal reports that Volkswagen AG Chief Executive Martin Winterkorn resigned under pressure after the company admitted it cheated on U.S. emissions tests sparked massive losses of its market value and left it facing prosecution and potentially billions in fines. Winterkorn said he accepted responsibility for the irregularities but wasn’t aware of any wrongdoing on his part.