The recent Volkswagen (“VW”) scandal has definitely rocked the automotive industry. Now, authorities from governments across the world are doing something about it.
The scandal was reported when it was discovered that people at VW utilized “defeat device” software to fool United States emissions tests on diesel cars into believing they met certain environmental standards. The defeat devices made sure that the actual emission levels, which were in some cases 40 times the level legally permitted in the United States, were hidden. This hidden software, which switches a vehicle’s engine to a much cleaner mode during testing, may have been installed in over 11 million cars worldwide.
The fallout has been extreme, to put it mildly. At least 482,000 cars will be recalled and VW could face penalties of greater than $18 billion in the United States alone. Already, a United States law firm indicated that it was suing the company, stating that car buyers had not gotten what they paid for. Not to mention the criminal investigations that will be conducted, led by the United States Justice Department as well as various state attorneys general.
Meanwhile, the German Chancellor Angela Merkel urged VW to move “as quickly as possible” to restore confidence in the company. German prosecutors indicated they were conducting an initial investigation into the vehicle testing manipulations. French Energy Minister Segolene Royal stated that French penalties would be “extremely severe” if any evidence of wrongdoing was uncovered.
Now, French prosecutors have launched an investigation to determine if VW committed “aggravated deception.” The decision was made following the results of a preliminary investigation conducted by French officials. The French inquiry will involve the public department for environment and health protection as well as the Anti-Corruption Office of the Judicial Police.
VW’s CEO, Martin Winterkorn, resigned last week amidst the scandal. Winterkorn said that he acknowledged responsibility for “irregularities found in diesel engines” but claims he did not know anything about the alleged engine manipulation. He stated that, “I am shocked by the events of the past few days. Above all, I am stunned that misconduct on such a scale was possible in the Volkswagen Group. . . I am convinced that the Volkswagen Group and its team will overcome this grave crisis.”