|March 03, 2016|
VW CEO was told about emissions crisis a year before admitting to cheat scandal
|Volkswagen's chief executive was told about the company's illegal emissions crisis more than a year before it admitted it was systematically cheating on US regulators tests. |
The German company admitted on Wednesday that its former CEO Martin Winterkorn was, in May 2014, sent a memo detailing how some VW cars were producing up to 35 times more nitrogen oxide emissions than allowed.
In the memo Winterkorn was told about an independent study that found VW cars were producing very high emissions in real life, but very low emissions under strict test conditions.
Up until now the company has said Winterkorn -- who resigned after the scandal broke in September 2015 -- was unaware of the issue, which was caused by an illegal "defeat device" software VW installed in US cars specifically to trick US regulators.
In a statement on Wednesday the company continued to defend Winterkorn saying there was no evidence that he had read the memo, which was included in "his extensive weekend mail".
However, VW said Winterkorn was told again about the problem in November 2014. At that point he was told that fixing the problem in the US would cost about €20m (£14.2bn, $21.7m).
On 23 May 2014, a memo about the ICCT study was prepared for Martin Winterkorn, then-Chairman of the Management Board of Volkswagen AG. This memo was included in his extensive weekend mail. Whether and to which extent Mr. Winterkorn took notice of this memo at that time is not documented. On 14 November 2014, Mr. Winterkorn received another memo that reported, amongst other things, on several then current product defect cases and referred to a cost framework of approx. EUR 20 million for the diesel issue in North America.
The company still did not come clean about its systematic emissions cheating, which was made public by the Environment Protection Agency (EPA) in September 2016.
The VW memo also reveals that Winterkorn and VW's chairman Herbert Diess were present at a July 2015 meeting at which the diesel issue was discussed. VW said it was "not clear whether there participants understood already at this point in time that the change in the software violated US environmental regulations". The company said Winterkorn "asked for further clarification of the issue".
"The diesel issue, as it was treated as one of many product issues facing the company, did not initially receive particular attention at the management levels of Volkswagen," the company said.
A month later VW technicians told a member of the company's board that the cars were equipped with illegal "defeat device" software designed to trick regulators into believing that its cars are greener than they really are.
It took another month for VW to admit its misdeeds to US regulators. The EPA made it public later in September.
VW released the detailed chronology of its senior management's knowledge of the emissions crisis as part of its defence in a lawsuit brought by investors who claim that senior management knew of the illegal activity, which has wiped billions of euros of the company's market value.
"After careful examination by internal and external legal experts, the company confirms its belief that its management board duly fulfilled its disclosure obligation under German capital markets law," Volkswagen said.
Volkswagen has set aside more than $7bn to cover the cost of the scandal, but some analysts have said it could cost as much as $17bn.