Auto Makers & “Breaking Trust”

The latest in the Volkswagen recall of 500,000 diesel vehicles is that the Department of Justice is reportedly looking into bringing criminal charges.  The Wall Street Journal and Bloomberg are both reporting that.

Besides any future criminal penalties, Volkswagen faces the possibility of paying upwards of $18 billion in fines for using so-called “defeat device” software.  These programs detect when an official emissions test is being performed and then turn on the car’s full emissions control system.  So, when they are not being testing for emissions, the diesel vehicles are not exactly living up to Volkswagen’s “clean diesel” marketing, are they?

Owners of recalled VWs who feel that they were tricked into buying their cars by the company’s “clean diesel” marketing can file complaints with the Federal Trade Commission.  Contact ftc.gov/complaint or 1-877-382-4357.  The FTC handles investigations into false and deceptive advertising.

Last week, the Environmental Protection Agency ordered Volkswagen to recall nearly 500,000 vehicles over concerns the automobiles expose people to harmful pollutants.  As the EPA pointed out in its order, VW marketed the affected vehicles as “clean diesel” but intentionally installed software in the vehicles as a way to evade emissions standards.

VW has since announced it would stop selling all model year 2015 and 2016 – both used and new–Volkswagen and Audi models equipped with 4-cylinder turbo diesel engines marketed as “clean diesel”. The VW CEO publicly apologized for “breaking the trust of [its] customers and the public”.

That begs the question how much trust does the public still have for these auto makers? The day before the VW recall announcement, the DOJ reached a $900 million deal to settle a criminal investigation into General Motors over the ignition switch defect that killed more than 100 people and resulted in hundreds more serious injuries.  And last year, the DOJ reached a $1.2 billion agreement with Toyota to defer prosecution over that car company’s sudden unintended acceleration issues.

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