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Dieselgate: Compliance auditor now demands further governance reforms from Volkswagen | Coastweek

Volkswagen Research and Development building in Wolfsburg: The Volkswagen emissions scandal (also called "emissionsgate" or "dieselgate") began in September 2015, when the United States Environmental Protection Agency (EPA) issued a notice of violation of the Clean Air Act to German automaker Volkswagen Group. The agency had found that Volkswagen had intentionally programmed turbocharged direct injection (TDI) diesel engines to activate their emissions controls only during laboratory emissions testing which caused the vehicles’ NOx output to meet US standards during regulatory testing, but emit up to 40 times more NOx in real-world driving. Volkswagen deployed this programming software in about eleven million cars worldwide, including 500,000 in the United States, in model years 2009 through 2015. PHOTO - WIKIPEDIA
Dieselgate: Compliance auditor now demands
further governance reforms from Volkswagen

BERLIN Germany (Xinhua) -- Volkswagen must undertake further efforts to improve its corporate culture in response to the "dieselgate" scandal, Larry Thompson, the company’s independent compliance auditor (ICA), told press on Monday.

Speaking at the Volkswagen Group’s corporate headquarters in Wolfsburg, Thompson said that the German carmaker still had a long way to go with regards to integrity, compliance and culture.

Nevertheless, he praised a "series of positive processes" which Volkswagen had initiated after being found guilty of installing illicit software to falsify nitrogen oxide emissions (NOx) from diesel vehicles in the United States.

Thompson was nominated by U.S. judicial authorities to supervise business practices at Volkswagen in the wake of the "dieselgate" scandal.

The 72-year-old’s comments were made on the same day as his specially-appointed team of 60 compliance experts published the first of three officially scheduled ICA reports.

Amongst others, Thompson lamented in the document that he had experienced delays in receiving information from Volkswagen.

"This topic must be clarified swiftly in the next reporting period in order for the ICA to be able to fulfill its task effectively", the interim report stated.

"The VW defendants have promised further improvements in their provision of information and increased the frequency of discussions with the ICA regarding this topic," Thompson added.


Volkswagen emissions scandal - also called 'emissionsgate' or 'dieselgate' | Coastweek

In total, the ICA identified 240 unspecified "corrective actions" which Volkswagen would have to take in 2018 to ensure that it fulfilled new compliance standards.

Hiltrud Werner, the recently-appointed director for integrity and justice at Volkswagen, highlighted on Monday that it would take several years for reforms to reach all 12 brands of the automotive group and 650,000 global employees.

"We have a marathon ahead of us", Werner said.

Speaking at Volkswagen’s latest Annual General Meeting (AGM), chief executive officer (CEO) Herbert Diess argued that long-term commercial success could only be secured with a corporate culture centered on "decency".

As a consequence, the Dax-listed firm needed to become "more honest" and "more transparent" in the way it conducted business.

According to the newspaper "BILD", Volkswagen is currently preparing to sack several senior staff members in connection to the "dieselgate" scandal and thus give in to a long-standing demand for personnel changes by Thompson.

"BILD" cited information that immediate dismissal notices sent by mail were already on the way to affected individuals.

If the report proves true, it would mark a U-turn in Volkswagen’s handling of the crisis after having previously shown leniency towards staff which have not yet been convicted of wrongdoing.

Volkswagen has hesitated to fire Rupert Stadler, CEO of its Audi luxury subsidiary, for example, in spite of being jailed by German authorities in the course of "dieselgate" investigations over nine weeks ago.


German carmakers finalize concrete plans for diesel software updates

BERLIN Germany (Xinhua) -- Germany’s major carmakers have finalized concrete proposals for voluntary software updates in vehicles affected by the "dieselgate" scandal, the German press agency (dpa) reported on Friday.

The country’s automotive industry faces a looming deadline on Sept. 1 when the Federal Motor Transport Authority (KBA) begins assessing whether the updates in question are successful in lowering nitrogen oxide (NOx) emissions and will hence receive its regulatory approval.

According to dpa, Volkswagen, Daimler, BMW and Opel are all on track to meet the deadline for software changes which they hope will spare them from having to commit to costlier "hardware" upgrades of diesel exhaust systems.

The Volkswagen Group told dpa that it had submitted corresponding plans to cover its portfolio of 12 brands.

The Wolfsburg-based company is Germany’s largest carmaker with gross combined revenue of 230 billion euros (267.6 billion U.S. dollar) in 2017 and the only industry representative so far to admit to illegal emissions cheating practices to judicial authorities.

Similarly, Stuttgart-based Daimler announced on Friday that all plans for software updates would be presented to the KBA on time.

The changes concern nearly three million diesel vehicles in total, and roughly one million in Germany alone.

Daimler announced a first round of updates back for 300,000 Mercedes-Benz cars in 2017 which has been approved by transport regulators and is now 95 percent complete.

BMW has already forwarded "all necessary documentation" directly to the KBA, a spokesperson for the Munich-based carmaker said.

Ruesselsheim-based Opel also confirmed its compliance with the deadline and stressed that its software updates for the majority of relevant vehicles had "already taken place."

Diesel vehicles sales have slumped recently in Germany given the risk of driving bans being implemented by cities to lower NOx emissions levels following a corresponding landmark ruling by the Federal Administrative Court.

According to a study by the German Association of the Automotive Industry (VDA), the share of diesel vehicles amongst newly-registered cars in Germany fell from 41.3 percent during the first half of 2017 to 31.1 percent during the first half of 2018.

In a move which could further exacerbate the situation, the Federal Environmental Agency (UBA) is demanding an end to the privileged treatment of diesel vehicles by German tax authorities.

The UBA estimates that diesel cars are responsible for more than 50 percent of harmful nitrogen oxide (NOx) emissions in the Germany.

NOx levels currently exceed binding limits set in EU clean air legislation in several major German cities, prompting the European Commission to file a still-unresolved lawsuit against the federal government in Berlin at the European Court of Justice (CJEU).


German Environmental Aid has described technical
upgrades in "dieselgate" scandal as unavoidable

BERLIN Germany (Xinhua) -- The non-governmental German Environmental Aid (DUH) group has accused policymakers and carmakers on Wednesday of making half-hearted attempts to lower nitrogen oxide (NOx) emissions caused by diesel vehicles in Germany.

DUH President Juergen Resch told press that urban air quality would only improve again in the country once a commitment was made to conduct more comprehensive "hardware solutions" to modify diesel motors.

Resch said that emissions testing by his organization had showed that Volkswagen vehicles which had undergone software treatments in the wake of the diesel emissions scandal continued exceed regulatory limits set by the European Union (EU).

German carmakers have refused hardware upgrades so far on the grounds that they would be too costly, volunteering to offer motor software updates for more than 2.8 million diesel vehicles instead.

However, Resch argued on Wednesday that the costs associated with more effective technical changes could easily be shouldered by the highly profitable automotive industry.

According to DUH, quick-fix technical upgrades could be completed for as little as 1,500 per vehicle.

"It is possible and would not endanger jobs", Resch said.

By contrast, he criticized the measures offered by carmakers as "Mickey-Mouse software upgrades" which failed to tackle the problem at hand.

So far, German Chancellor Angela Merkel’s (CDU) coalition government has shown leniency towards economically-significant national automotive industry on the issue.

Merkel’s cabinet has debated for several months whether technical diesel motor upgrades constitute a feasible alternative to software upgrades.

The chancellor and Transport Minister Andreas Scheuer (CSU) publicly side with carmakers, while Minister for the Environmental Svenja Schulze has repeatedly demanded mandatory hardware upgrades as well.

In the meanwhile, some major German cities like Hamburg and Stuttgart have already grasped an opportunity offered in a landmark court ruling by the Federal Administrative Court to unilaterally impose driving bans on diesel vehicles as a means to lower NOx emissions.

The Federal Environmental Agency (UBA) estimates that diesel cars are responsible for more than 50 percent of harmful nitrogen oxide emissions in the Germany.

NOx levels currently exceed binding EU limits in several of the country’s cities, prompting the Commission to file a lawsuit against the federal government at the European Court of Justice (CJEU).

Speaking to press on Wednesday, DUH President Resch urged Merkel to take a firmer stance on carmakers by forcing them to pay for technical diesel upgrades or take back vehicles which were installed with illicit defeat devices to understate their actual emissions levels.

"We expect the federal government to either enable citizen to access technical upgrades of manipulated vehicles which are paid for by the producers, or to return their vehicles to the producers in exchange for the original purchasing price—just like authorities in the United States already have", Resch said.

Volkswagen CEO, ex-CEO incriminated by staff members: report

BERLIN Germany (Xinhua) -- Former Volkswagen chief executive officer (CEO) Martin Winterkorn and the company’s acting CEO Herbert Diess have both been incriminated in testimonies made by staff during the ongoing "dieselgate" investigations, popular German magazine Spiegel reported on Friday.

According to Spiegel, four technicians and former managers who are formally charged with criminal offenses in the scandal told prosecutors that Winterkorn and Diess withheld relevant information about emissions-cheating practices from the public.

The testimonies all state that Winterkorn and Diess were made aware of the installation of illicit defeat devices to understate nitrogen oxide (NOx) emissions by July 2015 at the latest.

Nevertheless, they claimed the two senior managers refused to alert regulators and shareholders.

At the time, Winterkorn was CEO of the publicly-listed Volkswagen Group, while Diess occupied the helm of its flagship Volkswagen brand.

The four employees specifically referred to a meeting of around a dozen senior managers who discussed key aspects of illegal software in diesel vehicles and potential fines suffered by Volkswagen in the United States as a consequence.

Slides were allegedly presented to the attendees who detailed the scale of the emission fraud in the country several weeks before the company began to cooperate with U.S. authorities after the international scandal was revealed.

Volkswagen rejects the allegations against Winterkorn and Diess.

The company insists there was merely a small informal meeting around the time in which potential issues with diesel motors in the United States were flagged as requiring a technical response.

Management was therefore not made aware that the installation of the defeat devices amounted to criminal fraud under U.S. law.

So far, Diess and Winterkorn have refused to comment in public on ongoing investigations into their involvement in the diesel emissions scandal.

However, Diess told press that he had offered to travel personally to the United States to help resolve the matter with local authorities.

Winterkorn stepped down from his position at the helm of the Volkswagen Group shortly after the first reports about the "dieselgate" scandal were published in September 2015.

He has repeatedly stated that he had no prior knowledge of emissions cheating practices affecting 11 million vehicles at his company.

The Braunschweig State Prosecution Office currently lists 49 suspects in its investigations into emissions-cheating at German car makers.

A small number of senior Volkswagen executives, including Winterkorn, his successor Diess and board chairman Hans Dieter Poetsch are believed to have potentially committed "market manipulation" offenses under German laws governing the conduct of publicly-listed companies.

Also on Friday, German newspaper Bild reported that Volkswagen was preparing to sack several staff members who were listed as "dieselgate" suspects.

Bild cited information that immediate dismissal notices sent by mail were already on the way to affected individuals, marking a U-turn in Volkswagen’s handling of the crisis after having previously shown leniency towards staff which had not been formally found guilty of wrongdoing.

Stadler’s arrest marked the first time that a member of the management board of a German car maker was taken into police custody in the "dieselgate" scandal.

The Audi CEO has since provided a first testimony to prosecutors at the penitentiary facility near Munich. It remained unclear on Friday whether he, too, was among the four individuals who have made incriminating statements against Winterkorn and Diess.


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