Senator wants NHTSA to rescind VW fuel credits

David Shepardson
Detroit News Washington Bureau
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Washington — A Democratic senator wants the National Highway Traffic Safety Administration to require Volkswagen of America to forfeit fuel economy credits received from vehicles that had illegal “defeat devices.”

VW has admitted to installing sophisticated software that allowed 482,000 diesel cars built since 2008 to emit up to 40 times allowable levels. As a result, the vehicles, experts say, got higher real-world fuel efficiency than they would have if the devices had not been on the vehicles. It’s not clear if without the defeat devices, the vehicles would have gotten lower ratings.

VW says 11 million vehicles worldwide are impacted by the “defeat devices.”

“VW’s failure to use the proper emissions reduction technologies allowed its vehicles to operate more fuel efficiently, and thus also allowed VW to meet its CAFE standards without making the same vehicle design changes that other automakers had to make to meet their CAFE standards,” wrote Senator Ed Markey of Massachuettes.

VW “consistently exceeded its CAFE standards for the model years that were subsequently recalled because of the use of defeat devices. VW also received CAFE credits for its over-compliance, which could have been used for both regulatory and monetary benefit,” Markey said. “In light of VW’s illegal use of defeat devices to circumvent emissions controls, it is my belief that NHTSA should immediately re-analyze and, as appropriate, reverse any CAFE benefits VW might have enjoyed as a result of illegal behavior.”

NHTSA didn’t immediately comment on Markey’s letter. VW also didn’t immediately comment.

Markey’s letter to NHTSA Administrator Mark Rosekind notes that VW was one of the only automakers to oppose President Barck Obama’s 2011 proposal to hike economy standards “because it would be ‘unfair’ to makers of clean diesel engines, observing that “We’ve since learned that the term ‘clean diesel engine’ appears to have been an oxymoron when used to describe VW’s fleet. Some analysis have concluded that the deaths of dozens of people may have been caused by the illegal air pollutant emissions VW’s defeat devices enabled.”

Separately, VW said Friday it has no plans to cancel its $900 million investment for the production of a newly developed, seven-passenger SUV in Chattanooga. VW in Tennessee “anticipates a $600 million investment and creation of 2,000 additional jobs. Production of the new midsize SUV is scheduled to begin in Chattanooga toward the end of 2016.”

“The United States continues to be one of the most important markets for Volkswagen, and our commitment to Chattanooga and the state of Tennessee is clear proof of that,” said Michael Horn, president and CEO, Volkswagen Group of America. “The Chattanooga plant is a core part of our strategy in North America. Here and throughout the region, we will work toward meeting the demands of our U.S. customers and regaining their trust in the Volkswagen brand.”

Volkswagen has already invested more than U.S. $1 billion in its factory in Tennessee. Currently, more than 2,400 employees work at the plant; this summer, the 500,000th U.S.-built Passat was built.

The U.S. Attorney’s Office in Detroit and the Justice Department are leading the massive federal investigation into VW’s cheating. Federal prosecutors and FBI agents in California — where VW has pollution testing labs — are also involved.

German prosecutors are also investigating and have raided VW offices. Regulators and other agencies around the world are also investigating.

VW has set aside $7.3 billion to cover costs, saw its CEO step down and suspended numerous managers as a U.S. law firm, Jones Day, conducts an internal investigation. This month, Winfried Vahland, the VW executive that was tapped to take a new position overseeing VW in North America starting Nov. 1 abruptly resigned before he started the new job. It’s not clear who will replace him.

Earlier this month, VW U.S. chief Michael Horn testified before Congress and said it could be late next year before a fix is ready for all three generations of VW diesel engines. He acknowledged that the oldest vehicles would require software and mechanical repair, which he agreed was a “major fix.” VW hasn’t yet submitted plans on how it will fix the vehicles. VW has withdrawn its request for certification for the 2016 diesel cars with 2.0 liter engines and there is a stop sale pending for remaining 2015 diesel cars in dealer showrooms.

VW faces more than 350 lawsuits around the country and a federal judge in Detroit has named two retired judges, Steven Rhodes and Layn Phillips, in a bid to try to reach “expedited settlements.”

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