Cheated Once Will He Cheat Again

On December 10, Volkswagen Chairman Hans-Dieter Pötsch made a public admission: A grouping of the company's engineers decided to crook on emissions tests in 2005 because they couldn't discover a technical solution within the visitor'south "time frame and budget" to build diesel engines that would run into U.Southward. emissions standards. When the engineers did find a solution, he said, they chose to keep on adulterous, rather than employ it. "Nosotros are not talking well-nigh a one-off fault, merely a whole chain of mistakes that was non interrupted at whatsoever signal along the timeline," he said, announcing the preliminary results of an internal investigation at Volkswagen into the crisis at a press conference at the company'due south headquarters in Wolfsburg, Federal republic of germany. Volkswagen admitted this past autumn to installing illegal crook software into the engines of 500,000 U.S. vehicles and 11 million vehicles worldwide.

Noting that Volkswagen had suspended 9 managers believed to be involved in the charade, Pötsch added that the scandal arose from "a mindset in some areas of the company that tolerated breaches of the rules." But Pötsch did not answer peradventure the biggest question of the scandal: Why did Volkswagen cheat on that particular engine at that particular fourth dimension?

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Greenpeace activists protestation on top of the entrance to the VW plant in Wolfsburg, Germany on September eleven. Michael Loewa/laif/Redux

Part of the reply lies, Newsweek has learned, in the unprecedented tightening of emissions standards by the U.s. Environmental Protection Agency (EPA) for model year 2004, when the bureau dramatically raised the bar on how much pollution new cars in the U.S. would be permitted to discharge into the temper—presenting a virtually incommunicable engineering challenge to the world's automakers.

Since the mid-1970s, the EPA has introduced progressively more stringent emissions standards for low-cal-duty vehicles, including cars, sport-utility vehicles and small pickup trucks. Merely the requirements for model year 2004 were among the toughest ever. The federal bureau slashed the amount of nitrogen oxide it allowed cars to emit from their tailpipes past more than than 94 pct—from ane.25 to 0.07 grams a mile. Nitrogen oxide is a pollutant found in vehicle exhaust and cigarette smoke that, along with carbon dioxide, the EPA heavily regulates. Pollutants from tailpipe emissions tin can crusade premature death, bronchitis, asthma and respiratory and cardiovascular disease.

The new standards posed an enormous challenge to automakers looking to offer fuel-efficient diesel fuel vehicles to the U.S. market place. Diesel cars become more torque, achieve improve mileage and hold their long-term value amend than nearly gasoline-burning vehicles, merely the exhaust contains more nitrogen dioxide than nigh gasoline-powered engines. In Europe, where emissions standards are not as strict as in the U.South., more than than 50 percent of vehicles sold are now diesels. Compare that with less than 5 percent of vehicles sold in the U.Due south. With so much room to abound, Volkswagen sought to cleft the U.S. diesel marketplace—and, in the procedure, go the globe's top-selling automaker.

Volkswagen's rivals, including Mazda, Honda, Nissan and Hyundai, also had their centre on the U.S. diesel market place—but they took ane look at the new EPA standards and decided to chip their plans. The main challenge, several of the companies said, was that it was too difficult to meet the new standards while maintaining engine performance and staying on budget.

But Volkswagen saw the 2004 EPA decision as an irresistible claiming—and an opportunity. The automaker rolled out its new-model diesels in the U.South. in 2008 and won the offset Light-green Auto of the Yr award ever granted to a diesel fuel at the Los Angeles Machine Bear witness.

Volkswagen'south remarkable feat of engineering was a sham. The cheat software, it turns out, was the main reason for the motorcar'south apparently depression emissions and first-class fuel economy. In September 2015, the visitor acknowledged to the EPA that it cheated. Engineers had inserted what the EPA calls a "defeat device" in the engine—in this case, software that concealed the true corporeality of nitrogen oxide Volkswagen's diesel fuel engines were producing. When federal officials tested the vehicles with the cheat software in the lab to certify them for the road, they produced lower emissions than in existent-world driving atmospheric condition, where they discharged emissions of up to about 40 times the legal limit, the EPA says.

Investigators within and outside the visitor are at present trying to get answers to two key questions: Why did the deception happen, and how many people were involved? Newsweek has learned that a combination of factors fueled the deception, and that the conspiracy is likely wider than previously reported.

As recently as October, the company was suggesting that the number of employees involved in the cheating was small. Michael Horn, master executive of Volkswagen Grouping of America, told U.S. lawmakers in sworn testimony: "This was a couple of software engineers who put this in, for whatever reason." He then said that iii engineers were involved. Then he said he did non know the exact number. He added, "To my agreement, this was not a corporate decision."

Newsweek has learned that Volkswagen engineers and technicians tried to alert superiors most the emissions-rigging activities as far back equally 2011 but were ignored. "We have had several complaints most people maxim they tried to warn the company well-nigh this, which is being checked past our external investigator," Volkswagen's caput of external and investor relations, Hans-Gerd Bode, tells Newsweek. Volkswagen'southward external investigator, police force firm Jones Day, which is overseeing an internal probe at the company, declined to annotate.

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Some Volkswagen workers told supervisors about the cheating in 2011, but were ignored; most 50 employees accept admitted they knew something about the deception. Michael Loewa/laif/Redux

About l Volkswagen employees—mostly based in Wolfsburg—have confessed they had noesis of activities related to the emissions scandal as function of Volkswagen'due south amnesty program. The programme, which ended November thirty, applies only to non-managers, but the big number of rank-and-file employees coming forward suggests there may accept been more people aware of, or involved in, the deception than previously thought.

The number of engineers, technicians and managers needed to coordinate the vehicle functions with emissions-cheating software would likely be substantial. For instance, the cheat software that the EPA identified was "very sophisticated," says Christopher Grundler, manager of the EPA'due south office of Transportation and Air Quality. The offending computer code incorporated sensors that tracked the positioning of the steering cycle and motorcar wheels, likewise as numerous emissions controls. "There are lots of unlike levers," he says. Writing the code could, in theory, have been the work of one person, but making it piece of work with other parts of the engine is a more than complicated task that would likely have involved more people.

Volkswagen hasn't suspended anyone from its lower ranks, Bode says. The ix suspended managers include members of the company'south Audi, Porsche and supervisory boards, too as quality-command managers, plant managers and engine designers, co-ordinate to sources at Volkswagen .

A key reason engineers at Volkswagen may accept thought they could become abroad with the charade is that detecting crook code in a vehicle is nearly impossible if yous don't know where to look, says Bruce Ricker, senior software engineer for Computer science Holdings in Plano, Texas. He wrote engine software code for Volkswagen and other automakers as a consultant for 18 years in Germany. "This i isn't shocking," he says. "A John Deere tractor has over 20 dissimilar computers, and vehicles tin accept over 50. That'southward millions of lines of code. The vast majority of developers in a company don't have the chance to expect at that line by line. You don't have fourth dimension to scrutinize every piece of code. That is a luxury we don't have."

Because software engineers are often wrangling enormous amounts of code, he says, it would be fairly like shooting fish in a barrel to stuff cheat code into a vehicle's engine-command software and even replicate it millions of times over without information technology getting noticed. "It is highly probable that in one case the lawmaking was written, it could hands be installed in millions of cars," he says. "Actually, if someone wanted to sneak it in, they admittedly could. Information technology's programs all over the place in these cars. It's programs talking to programs. Literally, there are tens of thousands of programs. It's impossible for any 1 of united states to expect over the whole thing, even if we wanted to." Ricker returned from Frg in 2014.

The EPA's Grundler agrees. "A unmarried vehicle has around 100 million lines of lawmaking," he says . In the case of Volkswagen, the cheat software was buried under millions of lines of code, which meant finding it, Grundler says, was extremely difficult.

Information technology's fifty-fifty possible the code was not written past someone at Volkswagen, Ricker says. "The guy who wrote information technology could take been some 3rd-party contractor," he says. "He could be sitting in the Bahama islands correct now and laughing at this."

While Volkswagen has not revealed the exact mode in which third parties may have played a office hither, German visitor Robert Bosch GmbH, the world's biggest automotive supplier, admitted in the early stages of the scandal that it supplied the cheat software used by Volkswagen merely denied any wrongdoing in a statement. "How these components are calibrated and integrated into complete vehicle systems is the responsibleness of each automaker," it said.

The EPA, forth with the U.S. Justice Department, is investigating Bosch, which reportedly warned Volkswagen in 2007 non to utilise the offending software in existent-world driving conditions, which could be illegal, according to the German paper Bild Am Sonntag, citing an internal communication information technology obtained betwixt the 2 companies.

Merely the ease with which VW'south engineers could have perpetrated the charade doesn't explain why they did it. Engineers at whatsoever car visitor could have done the same matter. So why Volkswagen?

People familiar with the visitor tell Newsweek that the unique corporate culture of Volkswagen, inextricable from its headquarters in Wolfsburg—1 of Germany'south richest cities—led to an environment in which employees alive and work under a highly centralized hierarchy that expects them to perform, no thing what the demands. "Volkswagen is completely different from the other automakers," says Ferdinand Dudenhöffer, director of the Center for Automotive Research at the University of Duisburg-Essen in Frg. "It's not autonomous; it's autocratic. Information technology'due south a system focused on its roots and Wolfsburg. Information technology's non at all global in its thinking."'

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A cyclist rides by the Volkswagen constitute in Wolfsburg, Frg on September 23. Julian Stratenschulte/EPA

Volkswagen's elevation brass may never accept directly instructed employees to install the cheat software, Dudenhöffer says, but the company'due south work surroundings is well known for eschewing fence and dissent. "Sometimes you lot tin can exercise things without explicitly ordering them," he says. "At Volkswagen, the management might say, 'Please retrieve again on that, and if y'all don't find a solution, we may need to find another engineer.' You may observe yourself in a situation where, if you want to keep your job, you have no escape."

Some other reason many of Volkswagen's employees may have remained quiet about the emissions-cheating effect for so long—even if they didn't want to—says one Volkswagen executive, is the company's bonus organization, which is unusually generous to all employees, from the associates line to the CEO, and rewards consensus. Volkswagen pays bonuses not merely for individual functioning and company performance but also goes the actress step of rewarding team operation, he says, which creates fiscal incentive non to offer dissenting opinions. "Even assembly line workers get a bonus, but the higher up you go in the visitor, the college the percent of your remuneration is from your bonus," says the executive, who asked not to be named considering he still works for the company.

In a letter to employees in September, Volkswagen'south labor leader, Bernd Osterloh, acknowledged that the company needed to change its workplace civilization and create "a climate in which issues aren't hidden simply tin exist openly communicated to superiors, [and where] it's possible and permissible to argue with your superior about the best way to go."

The scandal is likely to change Volkswagen's culture and approach to doing business in numerous ways. It has also contradistinct the way environmental regulators around the globe go about their work. The crisis has shown many regulators how to spot cheat code, something many of them did not know how to practise before, Grundler says. "This matter has taught us a lot," he tells Newsweek. "We know how to await for these types of defeat devices at present. Nosotros no longer have to go through the haystack to find the needle."

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Source: https://www.newsweek.com/2015/12/25/why-volkswagen-cheated-404891.html

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