The company said it still expected 2016 sales revenue to decline as much as 5 per cent from 2015, and an operating return on sales of 5 to 6 per cent.
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There is a “cunningly cynical fraud at the heart of this scandal”, he said. One of the major accusations Schneiderman puts forth is that one of the company’s former executives was among those covering up evidence.
But faced with engineering challenges, VW later adapted the defeat devices to its own diesel cars sold in the US.
New York’s Attorney-General called the use of “defeat devices” a “widespread conspiracy” and a “cunningly cynical fraud”. Other than confirming its plans to manufacture electric cars, the automaker did not divulge any other details.
The New York suit cited internal documents from as early as 2007 about Volkswagen’s determination to promote “clean diesel” technology as a rival to Toyota Motor Corp’s (7203.T) Prius hybrid. The technology, rolled out in 2004, made vehicles exceed European emissions standards, so the engineers added software dubbed “acoustic function” to turn it off during emissions tests, the lawsuit said.
There were six variations of the defeat device installed by VW and Audi starting in 2008, with Porsche implementing them later, according to Schneiderman’s office. VW used the devices even after US environmental regulators began looking into the software to determine its goal, according to the complaint.
The latest lawsuit cites emails and other documents to allege a prolonged effort among dozens of Volkswagen employees in the USA and Germany to equip vehicles with the devices and stonewall inquiries from regulators.
The case against the company claims that VW “tried to cover up the problem through sham recalls that they knew would not meet the required standards” after the Environmental Protection Agency told the vehicle maker it had discovered the emission problem.
New York State’s complain says that VW’s corporate culture permitted a “willful and systematic scheme of cheating”.
“Consumers were defrauded, the public was defrauded, the environment was damaged”, Schneiderman said at an afternoon news conference in Manhattan. “[Audi’s] V-6 has exactly the same issue [as VW diesels], but not public yet”.
“They knew what they were going to do was illegal, and if caught they would face government enforcement and sanctions”, a statement on the case says.
But the NY civil complaint depicts a corporate culture that allowed a “willful and systematic scheme of cheating”.
That prompted an email to Winterkorn in May 2014 from Frank Tuch, then head of group quality management for Volkswagen, who wrote that “a thorough explanation for the dramatic increase in NOx (nitrogen oxide) emissions can not be given to the authorities”.
In September, Volkswagen kicked off months of turmoil when it admitted it used software allowing vehicles to perform differently during federal emissions testing than they did on the road.
The company has agreed to pay almost $15 billion, a record, to settle claims in the United States by Volkswagen owners and regulators. The company is also the target of potentially costly criminal probes in the U.S., Germany and South Korea.
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The lawsuit claims that Müller was made aware in 2006 that 3.0-liter diesel vehicles made by Volkswagen would have difficulty meeting federal emissions standards in the U.S. Volkswagen ultimately chose to avoid the cost of installing the necessary equipment to bring the vehicles into compliance, instead opting to use illegal software, NY alleges.
