The company cheated on diesel emissions tests. Then, it covered its tracks.
Volkswagen was a little more than a month away from the biggest crisis in its history when Oliver Schmidt, a high-ranking engineer for carmaker who dealt with regulators in the United States, wrote a reassuring email to his superiors.
Mr. Schmidt had just met with Alberto Ayala, a deputy executive officer of the California Air Resource Board, the state's air quality enforcer. For well over a year, Mr. Ayala had been pushing Volkswagen to explain why its diesel passenger car polluted so much more in ordinary driving than they did in California testing labs.
Mr. Schmidt's email, which has not been previously reported, was dated Aug. 5, 2015. Hours earlier, on the sideline of an industry conference in Michigan, Mr. Schmidt had presented Mr. Ayala with a binder full of detailed technical information which purported to offer a solution to the emissions problem.
The meeting “went very well,” Mr. Schmidt wrote. He cautioned, however, that the information he presented might encounter “headwind” when it was examined by experts at the Air Resources Board lab in El Monte, near Los Angeles.
That was an understatement.
The experts soon concluded that the technical information Mr. Schmidt presented was yet another smoke screen - the latest in a series of maneuvers by the automaker to hide its misdeeds. A few weeks later, having run out of excuses, Volkswagen was forced to admit that the diesels it had sold in the United States since late 2008 had contained software designed to camouflage emissions that vastly exceeded legal limits.
Media reports on the scandal have usually focused on Volkswagen's original sin：the company's decision in 2006 to equip its diesels with illegal software.
But the most costly aspect of the wrongdoing for Volkswagen may have been the cover-up that the company orchestrated after regulators first became suspicious.
The following reconstruction, based on interviews with dozens of participants and a review of internal Volkswagen documents and communications, shows that the cover-up spanned years and lasted until days before the company's lies were exposed. Volkswagen employees manipulated not only the engine software, but also generated reams of false or misleading data to hide the fact that millions of vehicles had been purposely engineered to deceive regulators and spew deadly gases into the air.
Documents and interviews also shed new light on the role of Mr. Schmidt, the Volkswagen compliance official who is so far the only company executive to be put behind bars. Arrested when he visited the United States for the 2016 Christmas holidays, Mr. Schmidt is being held without bail awaiting trial for fraud and conspiracy in Detroit.
Mr. Schmidt maintains that he was misled by other Volkswagen engineers and in-house lawyers. Other suspects, including five individuals indicted on federal charges, are believed to be in Germany, which does not usually extradite its citizens to states outside the European Union.
The alarm bells ring
They were a curious sight, the graduate students from West Virginia University, barreling down California freeways in spring 2013.
The back end of their car, a Volkswagen Jetta station wagon, sprouted a tangle of pipes and hoses. Flexible tubes sucked exhaust from the tailpipes and fed the gas into a mysterious gray box sitting on a slab of plywood in the car's cargo area. Bolted to the plywood was the portable generator needed to power the whole mess. It stank and made an infernal racket.
The students, Hemanth Kappanna and Marc Besch, were testing the Jetta's emissions for nitrogen oxides, a family of gases that cause asthma, bronchitis and heart attacks while contributing to global warming and the creation of urban smog. Working with a meager $70,000 grant, Mr. Kappanna, Mr. Besch and other members of a West Virginia University team set off a chain of events that exposed VW's massive emissions cheating conspiracy.
In early 2014, the grad students and their professors, all from the university's Center for Alternative Fuels, Engines and Emissions, published a troubling report that exposed strange behavior by Volkswagen diesels. At Volkswagen headquarters in Wolfsburg, Germany, alarm bells sounded.
In May 2014, after examining the study, Bernd Gottweis, Volkswagen's head of product safety, wrote a one-page report. It was included in the packet that aides gave to Martin Winterkorn, the Volkswagen chief executive, to read over a weekend.
Mr. Gottweis reported that a Volkswagen Jetta tested by the team from West Virginia had emitted 15 to 35 times the permitted amounts of nitrogen oxides during road tests. A Volkswagen Passat also tested by West Virginia researchers was five to 18 times over the limit. The same cars were able, however, to pass tests conducted on rollers in a laboratory.
“A thorough explanation for the dramatic increase in NOx emissions cannot be given to the authorities,” Mr. Gottweis wrote, using the technical term for nitrogen oxides. “It can be assumed that the authorities will then investigate the VW systems to determine whether Volkswagen implemented a test detection system in the engine control unit software (so-called defeat device).”
Volkswagen was a little more than a month away from the biggest crisis in its history when Oliver Schmidt, a high-ranking engineer for carmaker who dealt with regulators in the United States, wrote a reassuring email to his superiors.
Mr. Schmidt had just met with Alberto Ayala, a deputy executive officer of the California Air Resource Board, the state's air quality enforcer. For well over a year, Mr. Ayala had been pushing Volkswagen to explain why its diesel passenger car polluted so much more in ordinary driving than they did in California testing labs.
Mr. Schmidt's email, which has not been previously reported, was dated Aug. 5, 2015. Hours earlier, on the sideline of an industry conference in Michigan, Mr. Schmidt had presented Mr. Ayala with a binder full of detailed technical information which purported to offer a solution to the emissions problem.
The meeting “went very well,” Mr. Schmidt wrote. He cautioned, however, that the information he presented might encounter “headwind” when it was examined by experts at the Air Resources Board lab in El Monte, near Los Angeles.
That was an understatement.
The experts soon concluded that the technical information Mr. Schmidt presented was yet another smoke screen - the latest in a series of maneuvers by the automaker to hide its misdeeds. A few weeks later, having run out of excuses, Volkswagen was forced to admit that the diesels it had sold in the United States since late 2008 had contained software designed to camouflage emissions that vastly exceeded legal limits.
Media reports on the scandal have usually focused on Volkswagen's original sin：the company's decision in 2006 to equip its diesels with illegal software.
But the most costly aspect of the wrongdoing for Volkswagen may have been the cover-up that the company orchestrated after regulators first became suspicious.
The following reconstruction, based on interviews with dozens of participants and a review of internal Volkswagen documents and communications, shows that the cover-up spanned years and lasted until days before the company's lies were exposed. Volkswagen employees manipulated not only the engine software, but also generated reams of false or misleading data to hide the fact that millions of vehicles had been purposely engineered to deceive regulators and spew deadly gases into the air.
Documents and interviews also shed new light on the role of Mr. Schmidt, the Volkswagen compliance official who is so far the only company executive to be put behind bars. Arrested when he visited the United States for the 2016 Christmas holidays, Mr. Schmidt is being held without bail awaiting trial for fraud and conspiracy in Detroit.
Mr. Schmidt maintains that he was misled by other Volkswagen engineers and in-house lawyers. Other suspects, including five individuals indicted on federal charges, are believed to be in Germany, which does not usually extradite its citizens to states outside the European Union.
The alarm bells ring
They were a curious sight, the graduate students from West Virginia University, barreling down California freeways in spring 2013.
The back end of their car, a Volkswagen Jetta station wagon, sprouted a tangle of pipes and hoses. Flexible tubes sucked exhaust from the tailpipes and fed the gas into a mysterious gray box sitting on a slab of plywood in the car's cargo area. Bolted to the plywood was the portable generator needed to power the whole mess. It stank and made an infernal racket.
The students, Hemanth Kappanna and Marc Besch, were testing the Jetta's emissions for nitrogen oxides, a family of gases that cause asthma, bronchitis and heart attacks while contributing to global warming and the creation of urban smog. Working with a meager $70,000 grant, Mr. Kappanna, Mr. Besch and other members of a West Virginia University team set off a chain of events that exposed VW's massive emissions cheating conspiracy.
In early 2014, the grad students and their professors, all from the university's Center for Alternative Fuels, Engines and Emissions, published a troubling report that exposed strange behavior by Volkswagen diesels. At Volkswagen headquarters in Wolfsburg, Germany, alarm bells sounded.
In May 2014, after examining the study, Bernd Gottweis, Volkswagen's head of product safety, wrote a one-page report. It was included in the packet that aides gave to Martin Winterkorn, the Volkswagen chief executive, to read over a weekend.
Mr. Gottweis reported that a Volkswagen Jetta tested by the team from West Virginia had emitted 15 to 35 times the permitted amounts of nitrogen oxides during road tests. A Volkswagen Passat also tested by West Virginia researchers was five to 18 times over the limit. The same cars were able, however, to pass tests conducted on rollers in a laboratory.
“A thorough explanation for the dramatic increase in NOx emissions cannot be given to the authorities,” Mr. Gottweis wrote, using the technical term for nitrogen oxides. “It can be assumed that the authorities will then investigate the VW systems to determine whether Volkswagen implemented a test detection system in the engine control unit software (so-called defeat device).”
