If you don’t own a VW with a diesel engine or just hate the auto manufacturers so much that another recall doesn’t even phase, you may want to stop reading right now. If you are still reading, I suspect that you have read or heard about the debacle that VW is now facing for faking emissions information on all of their vehicles with diesel engines. It goes like this: the company knowingly put a put in equipment to allow the vehicles to ace EPA testing while belching up to 40-times more junk into the air in normal driving than they admitted to. This is huge.
It’s not the first time for VW on this same issue. In 1973, they were accused of the same thing and paid a large fine — for those days — without ever admitting wrongdoing. Not this time, at the introduction of the new Passat in New York on Monday, they have said that they messed up big time.
It is a big deal, also, since the Volkswagen Golf Sportwagen was named North American Car of the Year in January.
They have already fired their CEO and replaced him with the CEO of Porsche, taken a charge of more than $7-billion in anticipation of the costs to repair the damage, which is sure to exceed that number since fines are apt to be as much as $2-billion for the blatant effort to mislead. (Can you say fraud.) There is expected to be a buy-back offer for owners of the affected vehicle along with some cash to compensate for last of value on the used car market; VW dealers are being assured that they will incur no losses — sales of VW diesel autos are on hold. I expect the class-action lawyers are circling, although with no gore or deaths as with the GM and Toyota issues, this might not be a profit-maker for them.
There is also the unanswered question, “will anyone from VW face criminal charges in this matter?” What will be the impact in the rest of the world where TDI VW diesels are sold — a huge matter since this is the single largest car company by volume on the planet. If VW stock continues in freefall, what will happen. (If I were you, I would disregard the silly stories about Sergio Marchione of FCA finding cash to buy them.)
A lot will unfold in the coming weeks and months. There is no plan in effect as to what will happen with buy-back deals or settlements. They may be months in the future. So, if you own a VW diesel, keep driving it or let it sit in your driveway. VW can’t sell them but you aren’t forbidden from driving one. Watch for news on a plan — I’ll let you know when I hear anything.
It is a real shame that this has happened. I was at the launch of the Golf Sportwagen TDI and, along with the rest of the media applauded it universally. The same car is on a number of ballots for vehicle of the year recognition. That is all gone now, as well it should be.