Since news of Volkswagen’s emissions-cheating exploits broke wide open almost a year ago, the company has maintained that the cheating “defeat device” installed in many of its diesel cars was the work of a small group of rogue engineers. The Environmental Protection Agency’s subsequent disclosure of the cheating sparked probes across the globe and forced Chief Executive Martin Winterkorn to resign.
Advertisement
New York Attorney General Eric Schneiderman said during a press conference Tuesday, “The idea that this level of fraud could take place and involve so many people at such high levels of a major worldwide corporation is appalling”.
In a statement, Volkswagen said it is already in talks with authorities regarding “a comprehensive national resolution of all remaining environmental issues arising from the diesel matter”.
Volkswagen has blamed the emissions-cheating on a “chain of mistakes” after engineers realized they couldn’t make diesel engines comply with USA emissions standards within internal deadline and budget constraints. Just last month, the AGs said, the Volkswagen Supervisory Board recommended a package of bonuses for the Management Board that presided over the cover-up totaling over $70 million which was overwhelmingly approved by the company’s shareholders.
Speaking at a press conference the NY and MA attorneys-general stressed the importance of the lawsuit to send a message to other carmakers not to defraud the United States public.
“With today’s action, we want to make clear to all auto manufacturers that violating laws created to protect our environment and our public health is unacceptable and will be punished with significant penalties”, she said.
The Massachusetts lawsuit seeks a penalty of up to $25,000 per day for each violation of its environmental standards. “It is regrettable that some states have made a decision to sue for environmental claims now, notwithstanding their prior support of this ongoing federal-state collaborative process”.
The suits did not state Muller was aware of the cheating. A year later, a manager admonished a Volkswagen official in the USA for allowing another employee to send a frank email expressing concerns, the lawsuit said. The attorneys general also allege Volkswagen attempted to cover up the scandal.
In one 2014 e-mail obtained by NY investigators, Winterkorn was told by Frank Tuch, director of VW Group quality management, “A thorough explanation for [high] emissions can not be given to authorities”.
Volkswagen shares soared Wednesday after the German vehicle giant revealed that its first-half earnings before charges related to its diesel-emissions scandal were “significantly higher” than market forecasts. The suit stated that “some but not all of the data has been recovered”.
The legal action comes after the German automaker agreed to spend up to $15.3 billion to other settle consumer and government lawsuits. Instead, Volkswagen engineers and executives developed and implemented emissions-increasing defeat devices “as part of the normal course of business”, the lawsuit alleged.
Advertisement
“The numbers show a historic record result in the second quarter, and that’s just spectacular considering the headwinds VW faces with declining revenues and all the woes triggered by the diesel scandal”, said Juergen Pieper, a Frankfurt-based analyst at Metzler Bank.
