VW CEO apologizes for emissions, launches investigation

David Shepardson
Detroit News Washington Bureau

Washington — Volkswagen CEO Martin Winterkorn said Sunday the German automaker is launching an investigation into how it violated U.S. emissions laws in selling nearly 500,000 cars since 2009 with software that allowed it to "cheat" emissions tests.

The Environmental Protection Agency and California Air Resources Board said the automaker — on track to become the world's largest automaker but still struggling to meet aggressive U.S. sales goals — had sold cars that emitted 10 to 40 times allowable pollution. Officials said Friday the German automaker deliberately evaded federal emissions requirements in nearly a half-million diesel cars in the U.S. since 2009 by writing vehicle software to only activate anti-pollution controls during testing.

"The Board of Management at Volkswagen AG takes these findings very seriously. I personally am deeply sorry that we have broken the trust of our customers and the public. We will cooperate fully with the responsible agencies, with transparency and urgency, to clearly, openly, and completely establish all of the facts of this case," Winterkorn said in a statement released early Sunday. "Volkswagen has ordered an external investigation of this matter. We do not and will not tolerate violations of any kind of our internal rules or of the law."

VW vowed to "reverse the damage."

The statement came a day after its U.S. unit, Volkswagen of America, told U.S. dealers to halt sales of some remaining 2015 diesel vehicles that EPA and California said violate the law.

VW to U.S. dealers: Halt sales of some '15 diesel cars

"The trust of our customers and the public is and continues to be our most important asset. We at Volkswagen will do everything that must be done in order to re-establish the trust that so many people have placed in us, and we will do everything necessary in order to reverse the damage this has caused. This matter has first priority for me, personally, and for our entire Board of Management," VW said.

VW has made its "clean diesel" vehicles that get high miles per gallon a key part of its U.S. strategy — and has lobbied to convince federal regulators to treat diesel vehicles similarly to hybrid and other high mileage vehicles.

The Detroit News reported late Friday that VW dealers still had some 2015 diesel Jetta, Passat and Beetle cars for sale. The device allowed the German automaker to evade requirements in selling 482,000 diesel 2009-2015 Volkswagen Jetta, Passat, Sportwagen, Beetle and Audi A3 cars with 2.0-liter engines, and let them to emit 10 to 40 times allowable pollution, environmental officials allege. That action, they said, is illegal and a public health threat.

EPA: 482K VW diesel vehicles violated emissions rules

EPA said VW violated federal law and, in theory, could face fines of up to $18 billion — $37,500 per vehicle — as well as criminal prosecution. Both agencies issued notices of non-compliance to VW Friday, a step necessary before ordering a recall.

Christopher Grundler, director of the EPA’s Office of Transportation of Air Quality, said in a Detroit News interview Friday that the government agency took the unusual step of refusing to grant VW a “certificate of conformity” to sell 2016 model diesel cars with 2.0-liter diesel engines. VW dealers have been waiting for the 2016 models to replenish showrooms.

VW is barred from selling 2016 model vehicles with the 2.0 liter diesel engine until federal officials "get answers to the questions of how these vehicles are being operated. Volkswagen couldn’t explain why we’re getting these excess emissions,” Grundler said.

Grundler said it is “incomprehensible” how the world’s largest automaker could install “defeat devices” to evade emissions requirements. He said the EPA doesn’t know if VW will be able to fix the problem with a software upgrade, or needs to make a mechanical fix. The models under investigation cover two separate generations of diesel engines with separate systems for removing pollutants.

The agency said the vehicles’ software intentionally detects when the car is undergoing official emissions testing, “and turns full emissions controls on only during the test.” When vehicles are being driven normally, the computer disables the emissions controls.

Analysts speculated that there are only two advantages to such a device: VW may have wanted to get higher fuel economy for the cars or avoid more expensive emissions controls like those on larger diesel VWs built during the timeframe.

The announcement is a big setback to the German automaker, which has made diesels a big part of its U.S. strategy. Diesels last year accounted for nearly 22 percent of VW-brand U.S. sales. Friday’s announcement came as VW plans a high-profile event in New York City on Monday with singer Lenny Kravitz to show off its new Passat.

The Justice Department is likely to open a criminal investigation, if it hasn’t already.