Volkswagen Scandal ends in CEO Resignation

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Allegations and confirmation of the illegal rigging of automobile emissions tests by the world’s largest automaker have left Volkswagen in a disaster. The company faces a possible 18 billion dollars in fines, as the EPA is authorized to fine around 37,000 dollars for each vehicle with the breach. The company’s stock, as well as that of other major carmakers, has greatly decreased since the scandal broke. These show only a glimpse of the consequences that Volkswagen has suffered and will suffer as a result of this scandal.

Uncovered by a laboratory in West Virginia, Volkswagen inserted certain software into their diesel cars allowing it to recognize when it was being tested. It is not completely certain what conditions indicated a test scenario, but many believe that it would consider the movement (or lack thereof) of the steering wheel, air pressure, speed, and engine processes. When this was the case, the automobiles would immediately switch modes and pass the pollution test using lower engine performance and power. After the test, when the cars were on the road, they emitted over 40 times the allowed level of nitrogen oxides. This occurred in over 500,000 vehicles in the United States and therefore resulted in 500,000 fabricated U.S. pollution tests. There are over 11 million vehicles total in the world that have to be corrected by the company to meet the standards set by the EPA. The models affected in the United States include: Volkswagen Jetta, Beetle, and Golf 2009-2015, Passat 2014-2015, and Audi A3 2009-2015. Volkswagen has been forced to recall all of the affected vehicles, however, owners of these models are still safe to drive them, as only the cars emissions are affected. The company has notified car owners that they will soon receive a letter informing them when and where to take their car to have the program fixed and hopefully to reduce pollution!

There has been talk about who decided and allowed these cheating devices to be placed inside the cars. The company’s chief executive, Martin Winterkorn, has resigned, but denies all wrong-doing. As there was a chain of Volkswagen employees somewhere along the line that knowingly allowed this to occur, it is likely that further departures will occur. Head of sales and marketing and a management board member, Christian Klingler, is also leaving the company although Volkswagen states that this was part of a long standing plan for restructuring the company and has no relevance to the scandal. Legal action from customers and stockholders is likely to develop, and there is rumor that the U.S. Justice Department will open a criminal investigation.