If you own a VW diesel guilty of “cheating” Uncle, you’d better scuttle on down to your local VW store. Not to “fix” it (they’re not broken) but to get your money before there’s none left.
On Tuesday, Uncle announced the most draconian punishment ever meted out to a car company over the TDI “cheating” scandal: $15 billion in forced buyback/loan forgiveness offers and funding for “environmental programs” and the promotion of electric/hydrogen fuel cell vehicles.
On top of this, VW has agreed – been forced – to pay out another $600 million in separate settlements with 44 states plus the District of Columbia and Puerto Rico.
The cost of pending civil litigation – not covered by the above – hasn’t yet been calculated. But it could be the biggest and most expensive class-action payday ever. There are at least half a million potential litigants.
It could be curtains for Volkswagen.
No joke.
$15 billion is a staggering sum. An impossible sum.
It dwarfs the cost borne by Ford back in the late 1970s over the Exploding Pinto fiasco – a mere $127 million (later reduced to $6 million, or about $24 million in today’s dollars). In the early 2000s, Ford had to pay out about $2.4 billion to settle claims arising from the Ford Explorer/Firestone tire rollover debacle.
Chump change.
And Ford is a major automaker, one of the Big Three. Its cars account for about 15 percent of all cars sold in the U.S.
VW has – had – a market share around 3 percent.
The math is very, very bad.
Ford would have trouble dealing with a $15 billion dollar hit (probably more like $20 billion once the civil litigation is figured in).
And VW is not Ford.
Where will all the geld come from?
Maybe VW has a geldscheisser. You know – like the private banking cartel that controls the money supply.
The good news is that owners of the “affected” vehicles won’t be forced to turn in their cars (to be destroyed) but VW will be forced to buy them back if they do.
Well, so long as VW has the funds available to do so.
Which could be not for long.
Each owner will get (if he hurries) the pre-scandal “clean” Blue Book value of his car, plus a cash award in addition ranging from $5,100 to $10,000. Or, the owner can elect to keep his car and wait for VW to “fix” it (the details of this have yet to be determined). These people will still get the $5-$10k payday. People who still owe on a loan may have the balance due forgiven and people who are leasing an “affected” model will have the opportunity to turn the car in early without penalty.
About half a million cars are “affected,” dating back to the 2009 model year. Under the terms of the agreement with Uncle, VW must either buy back or “fix” 85 percent of these cars by June 30, 2019. If it fails to do so, Uncle will hit the company with another $85 million in fines for each percentage point below 85 percent.
That alone is four times what Ford had to pay out to make amends for the Exploding Pintos – which actually hurt (actually killed) actual people.
Who has been hurt by VW’s “cheating”?
The fact is no one’s suffered so much as a bad hair day.
Uncle is aggrieved because VW dodged his increasingly unreasonable exhaust emissions fatwas. But what’s the Big Whoop, really?
The “affected” cars emitted fractions of a percent more NOx (oxides of nitrogen) than Uncle decreed permissible. That’s it. The harm allegedly resulting from this is purely hypothetical. It is claimed a few dozen people – hypothetical people – might experience asthma-related symptoms. But no actual victim has yet been trotted out. And the “affected” vehicles would have easily passed muster with Uncle’s edicts of the early 2000s.
Were those cars “dirty”?
Who was harmed by them?
It’s interesting to observe that Uncle is much less aggrieved about the lethal airbags it has mandated be placed in front of all our faces every time we get behind the wheel.
These actually kill actual people.
Where are the double-digit billion fines and massive buyback offers?
Uncle won’t even allow people who own cars equipped with known-to-be-lethal air bags made by Takata to have the got-damned things disabled pending a fix. See here.
It shows what Uncle really cares about.
Which isn’t our “safety” – much less our lives.
It is obedience to Uncle.
VW sin was disobedience – and the punishment for that is severe.
If the automaker had merely sold defective cars, it would be no big deal. Or much less of one. When people get killed, the payouts and other consequences are trivial. Big numbers, by the standards of you and me, perhaps. But nothing a major corporation can’t handle.
But $15 billion? That’s a whole lot of money – even for a major corporation.
At the very least, it will cripple VW’s ability to update its cars for the foreseeable future. Expect stagnation for the next several years – which will be devastating to its competitiveness. Market share – already dwindling – is likely to continue to dwindle. Even though there is nothing functionally wrong with any of the “affected” cars, the taint of scandal has already caused their value to depreciate by double digits. See here. This will continue.
How does VW survive?
It will take years of profitability to recover the $15 billion; years (VW has openly admitted this) of VW not making any profit at all.
The Explorer/Firestone Tire debacle nearly killed Ford – and it was a much smaller debacle (for a much larger automaker).
Better get in line soon.
And don’t wait to cash that check, either.
EPautos.com depends on you to keep the wheels turning! The control freaks (Clovers) hate us. Goo-guhl blackballed us.
Will you help us?
Our donate button is here.
If you prefer not to use PayPal, our mailing address is:
EPautos
721 Hummingbird Lane SE
Copper Hill, VA 24079
PS: EPautos stickers – new design, larger and magnetic! – are free to those who send in $10 or more to support the site. Please be sure to tell us you want one – and also, provide a mailing address, so we can get the thing to you!
Damn it I knew I shoulda bought one of those VW diesels!
I am thinking VW should not pay and just exit the US market.
That’s an option but the market there would probably suffer after BO nuked Germany. After all, the US owns Europe and will damned well do as it likes. Don’t take my word for it, just ask all them congresscritters who only know second hand about the big war.
If they try that, I’m not going to be the only one pissed off at owning a car ‘they’ (the EPA) won’t let me drive. And enough of them are Clovers that will be screaming ‘there ought to be a law.’ Whereupon Congress will make a law. And pressure Merkel et al, to enforce it.
Dammit, if they didn’t make more laws where would they get more money? Even recyclers have a lobby. The wife’s car had a hole in the taillamp lens since she can’t back out of the barn without hitting some of my steel-working saw horses or sucker rod or pipe. I had put a piece of red lens tape over it, worked fine till this year when they outlawed red tape on the lens. I had $50 that was burning a hole in my pocket so I got that relief thankfully…….plus another $15 for gas and the morning gone.
If you care about the cosmetics you can weld most plastics with soldering iron. It takes some technique and helps to have temperature controlled iron. And yes it’s not good for the tip but I’ve always managed to clean them well enough for my uses. Weld the broken piece back into place. If the piece isn’t found the same basic kind of plastic will do well enough. Often helps to have that anyway to use as a sort of welding rod. I find that PP and PC tend to weld the best. I believe taillamps are PC. (poly-carbonate) So if you keep the old lens you can just use it as stock to weld up any others that get damaged.
And of course beware the fumes and such. All general precautions of doing stuff yourself apply.
Ack, that should read don’t care about the cosmetics. The welded bit on clear plastic will never look right or even close to right. But it will be closed up, red, and not use tape.
That probably would make the most sense. They’ve been a bit player in the U.S. market for a long time. (And I’m old enough to remember when VW’s “Hitlermobile” was the best-selling import – with Renault just behind them!)
It’s not about the environment and never has been. The environmental impact of destroying all of these perfectly functional cars and replacing them is going to be far greater than that of just continuing to use them as-is. Yet the useful idiots/Clovers keep prattling on with hysteria about people choking and dying on the fumes of these very clean diesel vehicles, as though this relative handful of cars is going to destroy the planet. It’s mind-boggling.
As far as I’m concerned the only thing VW did wrong was quickly caving instead of standing their ground against the federal Mafia.
As Eric said it may be a matter of keeping the company together at all, rather than just a business choice. The amount is so high that it could break VW.
Either the amount is designed to make an example and will be negotiated down, or bureaucrats and politicians are truly so out of touch and have overreached. There is always a trend among control freaks to go and go until they blow past all reason, finally destroying the toys they are playing with. They have no sense of reality and don’t think anything can break. That’s why they inevitably destroy everything they “regulate”. They are stupid children.
Bureaucracy is a psychopathic form of “government” whose chief aim is to remove the humanity of those it “governs”.
We have long ago crossed from Republic to Bureaucracy at the national level and it’s time people focused on that issue rather than worrying about who is going to collect the stray cats and dogs in their hometown and how much extra money the thieves at the school board deserve this year. The belief in the scientific mass management of humans by an elite of academics and their masters, which gained popularity in the early part of the 20th Century, has grown so long in the tooth that even its practitioners have lost the plot.
We are “governed” (enslaved) by technocrats who oversee an unelected bureaucracy. These are the true masters at the street level that destroy our lives. This is Clover Central.
We cannot unelect the bureaucracy by voting for representatives. They will never dismantle it. When was the last time the “government” shrank?
VW is a case study in cronyism. It’s also an example of the direct link between the “Green” farce, which is a corporate elitist tool and not an organic “movement” of “the people”, and the destruction of the free market. The moronic Social Justice Warriors and their Progressive ilk are the embodiment of the useful idiot in our time.
These traitorous swine (traitors against free people) would sell us all into techno slavery because they see some imaginary benefit for themselves through their place in the corpus communosa. They are the very definition of religious nutjobs, as they mimic the Christian milieu they were raised in while rejecting Christianity itself. It’s like the old saw about a dry drunk; they have substituted one drug for another.
The need for membership in something larger than oneself has been subverted from the social realm to the political. This is a tactic of the Fabian leftism which has been very successful in our three tier society: Not only do people feel disconnected from their fellow humans, and anomie in a system that doesn’t need them, they experience very real deprivation in a material sense as their money dries up. Leftism is a ready made solution that meets the desire to solve these problems. This is the force behind Bernie Sanders.
This is one half of the Clover State. It’s going to be a difficult job to survive the collapse of this State when so many people have poisoned minds and no moral grounding. VW is just the tip of the iceberg; there is a lot more of this sort of thing to come.
The hard part for bureaucrats will be easy hours, paid for lunches, better homes in better neighborhoods and nice cars plus those freebie vehicles supplied “with fuel” and that ability to “make law” over everyone and laugh when their lessers wail. Listen to the scream when they see that coming.
“The hard part for bureaucrats will be easy hours, …”
I assume you mean giving all of that up?
Yep, left that part out, thanks.
Erik, agree with your theme but you are off regarding VW’s size. While they do have a small share in the US they are neck-and-neck with Toyota for #1 worldwide.
Hi Trelane,
Hey, only porn stars spell “Erik” with a “k.” 🙂
Hey, only porn stars spell “Erik” with a “k.”
Not true, my son-in-law does, and he is an organic farmer. But he is Norvegian, ya?
Yes, but what did he formerly “plow”? Just couldn’t resist since the sidebar didn’t show the Norvegian sentence.
How’s that porn ‘stache coming along? 🙂 🙂
If VWOA folds, there will be many additional lawsuits from the dealers around the country.
Yes, this would be the same dealers who treat their customers like dirt and can’t sell their way out of a wet paper bag, but they’ll scream bloody murder when their supply of new cars is cut off. … even though they make far more money selling used cars.
I tried to grow a beard once or twice; the itchiness of it drove me straight into a hot shower in the middle of the night to shave the damn thing off!
Both of my Mother and Father own vehicles affected by the Takata Airbag recall and the VW diesel fiasco.
My father has a TDI VW Touareg plus a Diesel Porsche Cayenne. He will be making a killing with all the cash VAG will be forced to pay him. There is absolutely nothing wrong with either of them and both cars emit zero smell/soot. The chrome surrounding the exhaust is still squeaky clean with 20k+ miles on both trucks.
My mother has a 2015 Acura MDX with standard factory installed Takata claymores and she’s been forced to drive around a shitty Jeep Liberty rental car for the last 4+ months because of the giant backorder for replacement airbags. She won’t be receiving a single dollar from Honda/Acura for depreciation and has been paying the payments for a $40k+ luxury vehicle but has been stuck with an economy car.
What a clusterfuck!
When the violation was discovered VW set aside $X billions in escrow to cover the cost of the settlement. I seriously doubt any bankruptcy judge would allow it to be included as an asset (but then again, the Germans are getting a lot of s*** lately from English speakers, they might decide to get a little “aggressive”).
I’m pretty sure most owners will take the deal. There is a lot of grousing on tdiforums.com from the 2015 owners who are still making payments (although the thinking is that the generation 2 vehicles will still be fixable without too much loss of performance, so that might be why the offer isn’t as good). I did the math, and although it goes against my own political feeling about the situation, my self-interest says I’ll never see a deal like this again. Basically I’ll end up with about $1500/yr “depreciation,” and enough cash to get something reasonable that will fit a little better with my current needs. The worst part for me is having to car shop again. At least Eric’s got my back with decent reviews, even if all the cars look alike.
And forced to fund Uncle Sam’s pet 3rd part environmental projects. Let the judge know that’s an unconstitutional taking and appropriation.
Vw should have dealt with this using the Trump method…say YES, we cheated your ridiculous emissions standards to sell the public cars they want to buy! Then go into the science and the points you bring up. I think if they got the public on their side, it would have went better for them. Of course that only would happen if Vw was a non-globalist company in a non globalist country
Eric,
Thanks for the post. You hit on some points that I was thinking. I own one of the affected cars. Made in Germany, but with US Specs. Drove it in Germany for four years and it passed the fuels emissions standards. Get over here and it’s “dirty”? Jeesh.
This payout is nothing more than Uncle’s bureaucrats way of creating a slush fund for their green projects congress would probably never fund and a way to get money to the states, even though the states are not a victim.
About those airbags. Yup. I called a VW dealer to get mine turned off. Nope!
Lastly, agree wholeheartedly with you. Had this been an American company the punishment would not even be as close to severe as this. I don’t think any of the major banks have had to pay this much for the fraud they’ve pushed on the American people.
This all reminds me of us shooting down the Iranian Airbus, and the Lockerbie bombing payments–we demand lots because. . .America! But like in Iraq and Afghanistan, pay a pittance for when we do the same thing to somebody else. After lying about it, the Uncle paid Iran $61.8 million to the families of the victims, or $300,000 and $150,000 per victim. But with Lockerbie, Libya was forced to pay $1.8 ($2.7 billion?), or $10 million per American victim.
Before I left Germany, was talking to my landlord who worked at Porsche. He said what VW did was wrong, and unethical, but in the end, Germans are not going to throw one of their major producers under the bus over a fuel emissions issue. Throw the wrong doers out and don’t do it again.
Funny how my car was perfectly fine in all of Europe, but it gets to the US and it’s “DIRTY and EVIL!!!”. The EPA (and NHTSB) keeps moving the dang goal posts back and like Lucy, pulls the football every time the auto industry goes to kick it. And we the consumers suffer as a result. VW is getting fleeced to pay for some pet projects and balance budgets.
The easiest solution to this fiasco is to go to the EPA, and have it use its unconstitutional rule making authority and go to where diesel emissions are stipulated for autos in the USC and change the first digit behind that point-whatever NOX allowance decimal to a 1. But that would be too easy and not rake in hundreds of millions for slush funds.
@ Erik. Yeah. I plan on keeping my car. I’m my part of Virginia, there is no requirement for emissions testing.
And here is my biggest concern; God said whatever a man soweth, he shall also reap. Somewhere down the road, and American company, that sells its products overseas, is gonna screw up in one way or another, and many countries are gonna gang up on it, and do exactly the same thing Uncle is doing to VW and say, “Well, you set the precedent!” Would not be surprised if this is in the IT industry concerning backdoors, or some other widget that goes into a larger device.
Thanks, French!
And: Welcome to EPautos!
Much or all of it has to be global politics. Merkel pissed off a lot of people in the US,politicians, bureaucrats and even the public.
In ’08 the Bush administration loaned Ford $8B with nary a word from MSM. Ford paid it back we can only suppose. BO, instead of doing the same thing for GM stepped in and presented himself as The Decider, replaced, illegally,unconstitutionally, the head of GM with another as if he were somehow the expert.
I agree that the US can not afford to lose a car company, esp. one who still seems to be a US company, unlike Chrysler. The hit to the economy would be massive. The US wants to force Germany to keep US policies. This would seem to be one way. VW is THE German company with others all being lesser. If VW collapses, what other companies it owns would survive? Probably none. It would be like Jaguar being bought by Ford and all of a sudden Jags took on a Crown Vic styling. Shit, at least they could have retained the Jag stylists.
I have never understood where the lie in all this is. The cars passed emissions tests and then what was done to make them illegal? I don’t quite understand how they passed the EPA tests but performed differently on the road.
Why could you not delve into the issue of putting vehicles on a dyno with forced air induction into the front for cooling and engine intake air and come to the conclusion when you’re in zero humidity, driving hard uphill with the wind behind you in west Tx. heat how that same vehicle is going to pass those tests under cool, ideal oxygen/humidity levels for the EPA cycle, that cycle which is just so long and end before that exhaust system needs to clear it’s particulate filter and it still be legal. I’ve seen pickups go into the “mode” of cleaning the particulate trap and spray unburnt exhaust for quite a way. So, being able to pass the EPA test of a certain time length but not long afterward using much more fuel to literally burn the particulate trap clean for as long as it takes is figured into the EPA cycle? It doesn’t make sense. I watch this every day. There’s a double standard here that no one is addressing.
Part of the reason why this is such a big deal is that the Germans in charge of VW went into denial mode. And overruled (and later fired) the head of VWOA who tried to convince them to apologize and cooperate with the EPA/NHTSA.
A bureaucrat scorned is twice as vindictive…
Hi Chip,
Very true.
But rather than deny, I think VW should have launched a PR juggernaut to defend what it did. Explained to the public that the emissions at issue are minuscule and that the time has come to accept that any future reductions will also be extremely small and come at ever-increasing cost. That modern car engines are already extremely “clean.” That it would be much more cost-effective to dial back the weight of cars so that they burned less fuel, which would produce much less of all the at-issue emissions.
I believe we are standing on the banks of the Rubicon. If sanity doesn’t reapply itself, cars are going to be mostly electric/hybrid rich man’s toys ten years from now, as IC cars will have been regulated out of existence.
VW needs to refuse to sell to the US market. Just withdraw. If they had a real boss instead of the usual eunuch globalist lackey installed as CEO they would deprive “US Citizens” of their vehicles until such time as the “US Government” bureaucrats stopped trying to destroy the competition for their crony frat buddies.
Sounds like it would be cheaper, or even a matter of survival, just to give Uncle the finger.
“VW needs to refuse to sell to the US market.”
But didn’t you read what Eric wrote a few days ago about Germany’s coming emissions restrictions? It’s not just the EPA (& NHTSA) – the freaking control freaks (and enabling Clovers) are all over.
Free, I think that is goin to be our future: Refusing to sell to the US market. After seeing the sacrificing of VW on Uncle’s altar, and then if The Donald enacts trade tariffs, they’re all gonna RUN from this sinking ship, and we’ll all be stuck with only over-priced shoddy ‘Mercan-made crap.
Heard on the radio this am that another airbag co. has issued a recall, though they say no one (at least so far) has been injured. Sorry, I didn’t catch the name.
Nice press release. Bad airbags but no injuries. Cross their collective fingers and hope nobody gets the internal docs.
Maybe the defect is that they don’t always deploy as expected? Probably fewer casualties that way than with Takata Claybrooks.
Hi Phillip,
These are (I think) side curtain bags. It’s the frontal bags that are most dangerous.
‘frontal’ as in lobotomy?
Phillip the Bruce,
I’d rather have a bottle (preferably full of my favorite beverage) in front of me, than a frontal lobotomy. 😉
https://youtu.be/sMzV2VNN2sg (Thanks T-Bone ;))
eric, just walked in to this conversation, back from the wrecking yard. I asked the guys there if there were big bucks to be made when the vehicle had a lot of airbags go off since airbags are actually cheap. He said not so much, depending on which bags went off. He went on to say passenger side and side bags destroyed so much interior panels/trim/etc. that they really were totaled by the time you replaced that dealer only stuff. Good time to be in the hot car biz sounds like. I know in big cities they steal brand new vehicles, likely to be in accidents in large numbers, strip them out and leave the stripped vehicle somewhere for the insurance company to deal with. It happened to a friend and he said the guys actually did him a favor by using the batteries to turn upside down on what was left so as to leave little that could be fixed.
What the owners of these vehicles should do is keep them and not sell them back to VW. Once the dust settles these cars will be prized on the used car market because they represent something that will probably never be sold again in the US, a nice performing diesel car at a reasonable price. Those who accept the buyout and give up their cars will end up spending the money on inferior replacements.
A prudent owner would just keep the car, wait for VW to contact them about the fix, then throw the letter about the fix in the trash. Never get it “fixed”.
I wonder what the Diesel freak forums are saying about this?
The risk is EPA compliance. Some states require EPA compliance as a condition of registration and registration renewal as long as it’s a USED car (7500+miles in NYS).
There may be loopholes to find (Like NYS MV-74 form, which may only provide a loophole for CARB compliance, not EPA, and which they DON’T stock at the NYS DMV public locations for some reason heh heh)
This is one for the lawyers, I think.
However such a car that hasn’t been fixed can never ever ever go to a VW dealer. The moment it is there for anything it will be fixed.
I’m wondering if the newer models that have DEF are ‘fixable’ and the older ones (like mine) w/o are considered a lost cause?