VW Cheats, Halts Sales on Diesels, faces $18 BILLION fine

[don]

This will shock and amaze you ...

Rewarding Failure – Volkswagen CEO to Receive $32 Million Pension

Michael Krieger | Posted Wednesday Sep 23, 2015 at 3:39 pm

Last week, I tweeted the following with regard to my prediction about what would happen to the Volkswagen CEO after pretty much destroying the company’s reputation due to the emissions cheating scandal.

It didn’t take long for crony capitalism to kick in. You know, where the most destructive and inept members of society are consistently rewarded for failure. Bloomberg reports the following:

Martin Winterkorn, engulfed by a diesel-emissions scandal at Volkswagen AG, amassed a $32 million pension before stepping down Wednesday, and may reap millions more in severance depending on how the supervisory board classifies his exit.

After Winterkorn disclosed Wednesday that he had asked the board to terminate his role, company spokesman Claus-Peter Tiemann declined to comment on how much money the departing CEO stands to get. Volkswagen’s most recent annual report outlines how Winterkorn, its leader since 2007, could theoretically collect two significant payouts.

Winterkorn’s pension had a value of 28.6 million euros ($32 million) at the end of last year, according to the report, which doesn’t describe any conditions that would lead the company to withhold it. And under certain circumstances, he also can collect severance equal to two years of “remuneration.” He was Germany’s second-highest paid CEO last year, receiving a total of 16.6 million euros in compensation from the company and majority shareholder Porsche SE.

While the severance package kicks in if the supervisory board terminates his contract early, there’s a caveat. If the board ends his employment for a reason for which he is responsible, then severance is forfeited, according to company filings.

Of course, we all know this isn’t going to happen. How do we know? Well this is how…

The supervisory board’s executive committee said in a statement Wednesday that Winterkorn “had no knowledge of the manipulation of emissions data,” and that it respected his offer to resign and request to be terminated. It also thanked him for his “towering contributions” to the company.
The annual report also mentions another piece of his pension: He can use a company car in the years that benefit is being paid out.

This is merely the latest example of the “heads I win, tails you lose” environment that protects corporate CEOs. In case you missed the following post published just last week:
United Airlines CEO Walks Away with $21 Million Exit Package After Resigning Due to Corruption Probe

Well of course you’re going to have income inequality when CEOs literally can’t lose, no matter how much they fail.

[radon]

Re: VW Cheats, Halts Sales on Diesels, faces $18 BILLION fine

I remapped my ECU and doubled the torque my diesel was producing. The stock specs aren't the end all for diesels.

[dcarrigg]

Re: This will shock and amaze you ...

There ain't nothing 'crony' about it, Don. This is just regular, plain old capitalism.

Lie; maximize externalities; offload risk; stack paper. What does trump call 'em? Real killers? Sounds about right.

The game's super simple, really.

People just don't want to believe it.

[don]

Re: This will shock and amaze you ...

There ain't nothing 'crony' about it, Don. This is just regular, plain old capitalism.

Lie; maximize externalities; offload risk; stack paper. What does trump call 'em? Real killers? Sounds about right.

The game's super simple, really.

People just don't want to believe it.

Agreed, with the caveat it does historically ebb and flow. During portions of the Cold War "Capitalism With a Human Face" was popular. Monopoly remains the dominant feature, especially in the all-important area of capital. Then, of course, there's the details: a waning hegemon, the crisis of overproduction, etc.

A cool graphic, however. Be-legit.

[radon]

Re: This will shock and amaze you ...

This is just regular, plain old capitalism.

Lie; maximize externalities; offload risk; stack paper.

Those are all artifacts of a growing command economy. No "ism" will prevent certain people from acting in their own self interest to the detriment of others. When you have a large government with the ability to take wealth and redistribute it to others is it such a shock that many of the benefactors are the well connected? It is an example of bad government, and no more an indictment of capitalism than it would be of socialism. Unless you're buying and selling illegal narcotics plain old capitalism doesn't exist and hasn't for a long time.

[FrankL]

Re: VW Cheats, Halts Sales on Diesels, faces $18 BILLION fine

this scandal puts the following thread in a different light: http://www.itulip.com/forums/showthr...an-Diesel-cars

I wonder if knowledge about cheating emission tests has played a role in the behaviour of European governments' proposals regarding the use of diesel engines in passenger cars.

Apparently the test results about the cheating have been in the public domain for a while now (1+ year), and I expect governments like France that have a domestic car industry to 'know' whether competing German manufacturers are cheating these tests (and decide on whether their own manufacturers should follow suit).

[vt]

Re: This will shock and amaze you ...

West, by God, Virginia?!?

http://www.npr.org/2015/09/24/443053...gens-big-cheat

Takes some country boys to understand how a car engine operates

[thriftyandboringinohio]

Re: This will shock and amaze you ...

West, by God, Virginia?!?

http://www.npr.org/2015/09/24/443053...gens-big-cheat

Takes some country boys to understand how a car engine operates

That's a great bunch down there doing great work.

We worked with them for dynamometer emissions testing of trucks and buses in the early 1990's.
Back then they had the only mobile heavy-duty chassis dyno with an emissions lab capable of fully speciated testing.

I looked them up just now and find that the venerable Dr. Reda Bata seems retired.
And Dr Nigel Clark is now running that center. He was a young adjunct back then.

[Mega]

Re: VW Cheats, Halts Sales on Diesels, faces $18 BILLION fine

Eveing all

Merc have just said that they "Will be moving away from Diesel for cars in the next few years".............Ford just said they invested Ł110 million in Bridge end engine plant to make GAS (not diesel) engines.

I suspect the car producers will be held up like the Tobacco bosses & then i little back room deal will be made...........Kill Diesel & we help out.............i also suspect that "They" will look to Nat Gas as a fuel for cars....
Mike

[FrankL]

Re: VW Cheats, Halts Sales on Diesels, faces $18 BILLION fine

And now comes a report that puts the US car industry in a bad light:
http://www.independent.co.uk/news/bu...-10514716.html

the timing makes you wonder to what degree the events we are witnessing are a political game between US and European countries...

[don]

Re: VW Cheats, Halts Sales on Diesels, faces $18 BILLION fine

And now comes a report that puts the US car industry in a bad light:
http://www.independent.co.uk/news/bu...-10514716.html

the timing makes you wonder to what degree the events we are witnessing are a political game between US and European countries...

Hard Times makes for Hard Ball.

[GRG55]

Re: VW Cheats, Halts Sales on Diesels, faces $18 BILLION fine

the state where i live has mandatory emissions testing every few years. these cars will be identified and there will be a mandatory retro-fit likely hobbling the engines.

The diesels aren't the only engines in question when it comes to measuring emissions:


Mercedes Tops Study's List of Carmakers Overstating Fuel Economy

September 28, 2015 — 6:31 AM MDT


Mercedes-Benz topped a European lobbying group’s list of carmakers to overstate fuel economy for the second year in a row in an annual study that may receive extra scrutiny amid Volkswagen AG’s diesel-engine test scandal.

Vehicles built by Daimler AG’s Mercedes division used 48 percent more fuel on average than their published statistics claim, with gaps exceeding 50 percent on new A-, C- and E-Class models, Brussels-based Transport & Environment said Monday. BMW’s 5-Series and the Peugeot 308 produced differences between real-world and laboratory results of just under 50 percent. Across the industry, the gap widened to 40 percent last year from 8 percent in 2001, with the difference between published specifications and actual fuel use costing a typical driver an additional 450 euros ($500) yearly at the pump.

T&E based its figures on a 600,000-car analysis compiled by the nonprofit International Council on Clean Transportation. Another ICCT analysis, in 2013, prompted the U.S. probe that resulted in Volkswagen’s admission that it installed software to cheat on diesel emissions tests in some 11 million vehicles.

“Like the air-pollution tests, the European system of testing cars to measure fuel economy and carbon dioxide emissions is utterly discredited,” Greg Archer, clean-vehicles manager at T&E, said a statement accompanying the study. “The Volkswagen scandal was just the tip of the iceberg.”

Following the Volkswagen scandal, the European Union is scrambling to assess weaknesses in a regulatory system that has laxer emissions tests than in the U.S. Environmental groups are pushing for tougher tests by 2017, while the United Nations is coordinating efforts for countries to harmonize automotive regulations, including environmental rules.

T&E’s report on Monday focused on fuel consumption and the carbon dioxide emissions it implies. That’s a different type of emissions than the nitrogen oxides, or NOx, that Volkswagen admitted to falsifying. Carbon dioxide is linked most strongly to global warming and not harmful for individuals, while other auto pollutants, such as NOx and fine particulates, can lead to respiratory diseases.

Other vehicles consuming close to 40 percent more fuel than official results included the VW Golf and Renault SA’s Megane, the T&E report said.

[Chris Coles]

Re: VW Cheats, Halts Sales on Diesels, faces $18 BILLION fine

What I look forward to is an answer to the question; what is the performance and importantly, long term engine reliability, if the vehicles in question were forced to use the same settings as those that pertain when undergoing the standard emissions tests that are now called into question?

I suspect that many TV program makers are running wild trying to answer that ASAP.

[don]

Re: VW Cheats, Halts Sales on Diesels, faces $18 BILLION fine

DETROIT — Federal regulators said on Tuesday that Fiat Chrysler Automobiles had significantly underreported to regulators the number of death and injury claims linked to possible defects in its cars.

Mark Rosekind, the head of the National Highway Traffic Safety Administration, said that early information pointed to flaws in Fiat Chrysler’s systems for gathering and reporting the claims data, as required under federal law.

“This represents a significant failure to meet a manufacturer’s safety responsibilities,” Mr. Rosekind said. “N.H.T.S.A. will take appropriate action after gathering additional information on the scope and causes of this failure.”

The agency provided no details on the number of deaths and injury claims involved, or the period of time in which they occurred.

http://www.nytimes.com/2015/09/30/bu...aims.html?_r=0

[shiny!]

Re: VW Cheats, Halts Sales on Diesels, faces $18 BILLION fine

Hyundai/Kia got in trouble for overstating MPG on their GDI engines. Hyundai was fined and owes me about $300. I should have gotten it this fall but six class-action suits have been filed against them, disputing the settlement. It'll probably be years, if ever, before I see my money. By that time it might buy me a cup of coffee ;-)