Volkswagen Scandal

Volkswagen+Scandal

On September 18, 2015, Volkswagen received notice from the US Environmental Protection Agency (EPA) that certain 2.0Liter 4-cylinder TDI vehicles do not meet government emissions standards.  Starting with models made in 2009, Volkswagen has been cheating on the emission test.  These tests are done in a lab with only the front wheels moving.  Software in the car can detect when this test is being done and puts a special product in to hide the pollutants.  There are a little less than half a million of these cars in America and over 11 million cars worldwide that have this software in them.  This made it look like Volkswagen was passing all of their emission tests and proving it to be the clean diesel car it is advertised to be.

The interim director at the West Virginia University center for alternative fuels, engines, and emissions, Daniel Carder, found this issue in Volkswagen cars.  They tested it on the roads instead of the front wheel test, therefore the software was not activated.  It was a $50,000 study paid for by The International Council on Clean Transportation  (ICCT).  John German, ICCT’s U.S. co-lead said, “We had no cause for suspicion, we thought the vehicles would be clean.”

These defected cars release 10 to 40 times the legal limit of nitrogen oxides (NOx) into our environment.This is nitric oxide (NO) and nitrogen dioxide (NO2) together. This pollutant causes smog and acid rain and also health problems like asthma and heart disease.  The legal limit to emissions is to not exceed 0.07 grams per mile as stated by the United States Environmental Protection Agency (EPA).  Dr. Young, an environmental science teacher here at Riverbend, said, “Not only am I shocked that this company would deliberately deceive their customers, I am concerned about the effects that these hidden emissions will have on our atmosphere.”

Due to this scandal, Volkswagen’s stock has plummeted. About two thirds of the company’s market value has been wiped out since this story broke in September.  The price of the Volkswagen stock has had a slow decrease in value since March when it was $255.20 a share.  On Friday, September 18, the stock was at $162.40 a share, on the following Monday it had dropped to $132.20.  The stock went to 106.00 on Tuesday September 22, then 95.20 on the following Tuesday, September 29th. Overall, the value of the stock has declined by 62%.  The company lost 16.9 billion dollars in their stock and is now fined 18 billion dollars for fraud.

Volkswagen is the second largest automobile maker in the world.  With more defected cars in Europe, it’s hard to say if they will ever be back on top again.  They claimed to have very clean diesel cars and their customers trusted them.   Mike Jackson, the CEO and chairman of Autonation said,”It’s absolutely shocking, It’s really hard to get your head around,” referring to these lies.