“Our company was dishonest with the EPA…and in my German words we have totally screwed up,” remarked Michael Horn, President and CEO of Volkswagen’s American division in a statement to the public on Sept 22.
But now as the dust settles and the scope of Volkswagen’s deceit becomes apparent, I have but one question: Should we even be surprised? (New York Times, “The potential criminal consequences for Volkswagen”, 09.25.15 )
For reference, Volkswagen has been caught red handed fooling us into thinking their diesel vehicles are more energy efficient. These vehicles are regularly tested for emissions, which is part of any typical registration process to ensure a car meets the stringent requirements for the Clean Air Act of 1963.
What Volkswagen did was ingenious in a way: when the car is idling, or detects a state that’s akin to an emissions test (such as when it is running but not seated, or the engine is running a higher RPM but isn’t moving) it will intentionally turn its engine to a more emissions-friendly mode.
When the test is over, the car will kick its engine into full power and the driver will unknowingly continue to violate clean air standards.
One such chemical, Nitrogen Dioxide, is explicitly known to cause respiratory problems for those breathing it, and after this discovery Volkswagen vehicles were found to emit as much as 35 times safe Nitrogen Dioxide levels when running.
A computer system was designed into these diesel-powered vehicles in order to fool emissions testers to believe the vehicle, when in a laboratory setting, was within safe emissions levels. Are we even surprised that Volkswagen would install this technology into more than 11 million cars?
I mean it. We shouldn’t even be surprised that we’re discovering yet another car company has been criminally neglecting legal obligations for years.
There are a number of ongoing debates and discussions about whether Volkswagen will be issued criminal charges for intentionally lying to legal authorities about emissions standards, and frankly I’ll be surprised if this goes anywhere.
We shouldn’t be shocked if these discussions quickly dry up and fall under yet another petty civil penalty of a few billion for a company that nets 11 billion euros a year in profit.
We shouldn’t be surprised, because this is how we’ve handled car companies for decades, and yet again we will likely slap on the wrists a company that has harmed not only thousands of people living now, but also potentially millions more in the years to come.
Volkswagen’s actions are nothing short of criminal negligence, but when we look at our track record at punishing companies that perform criminal negligence, we’ve been criminally negligent ourselves.
Often we follow this petty cycle of watching a major CEO resign with a golden parachute, followed by some sort of Justice Department investigation, and ending with a civil suit or settlement in the hundreds of millions or even sometimes a few billion.
Meanwhile, the company’s stock tanks, at least until a probe clears and everyone returns to business as usual within five or ten years.
Take, for example, General Motors (GM), who intentionally hid a quite dangerous fact about their cars for more than a decade.
GM knew for “at least a decade” that ignition switches on more than 30 million of its cars could, during an accident, cause the airbag to not deploy. It is in essence the largest vehicular recall in history, as over the course of two years GM slowly added the number of cars to review for potential ignition switch issues.
It’s already been determined that at least 124 deaths are in some way connected to the issue, and that this has spanned years of criminal negligence.
Ultimately, GM is paying out at worst a couple billion dollars—a walk in the park compared to an annual profit of nearly $4 billion. (The Detroit News “GM compensation fund completes review with 124 deaths” 08.24.15)
Then there’s Toyota, which paid out after recalling almost 10 million cars for that accelerator issue between 2009 and 2011. The cars were known to, due to an issue with floor mats and other potential software and equipment issues, suddenly jam the accelerator to the floor and cause the vehicle to veer out of control and crash.
Again, Toyota pays out just a few billion after making the repairs and being connected to about 37 deaths. Toyota, by the way, netted almost 1 trillion yen in profit last year, which comes down to about $8 billion. Is anybody sensing a pattern here?
I can go on. Year after year, criminal investigation after criminal investigation, nobody is in jail for these recalls I’ve mentioned so far.
Of course there were criminal penalties, but never even close to the profit or earnings for a company of such size or scale. When an individual is issued criminal or civil penalties, they can spend decades with garnished wages to pay for the impact they make on someone’s life. When GM and Toyota collectively kill more than 150 people, their penalties are paid out in a matter of months.
So while the press goes around and asks aloud whether Volkswagen will be criminally investigated or fined a record amount, I highly doubt either thing will come to pass.
Sure, there will be investigations, and large fines will be waved around like demerits, but after a few lawsuits the whole thing will be simplified to maybe a few billion dollars, plus some aggressive finger wagging to never do such a heinous thing again.
As we can see though, this is far from a rare occurrence. The only thing rare is any evidence that car companies are learning their lesson after killing people in the name of profit.
Cars are not harmless tools. They are dangerous machines that, when not enforced to the most rigorous safety standards, can endanger our lives.
Just as we punish someone in society who chooses to drive after being intoxicated, we ought to punish the car manufacturers who decide to put something on the road that doesn’t meet our standards for safety. Maybe this time we’ll finally learn our lesson once Volkswagen is handed out a final punishment. I highly doubt it, but who knows—maybe this time things will be different.