had been installing elaborate softwareonly
announcedis also contemplating
admitted
announced his resignation on Wednesdayhas been plummeting
More here – VOX
I do struggle to understand how for some people greed is such a powerful motivator that they will behave in the most appalling ways. I am quote certain that within the minds of those responsible there is such a powerful form of cognitive dissonance justifying what the actions they took. In their own minds they are probably surprised by all the fuss. I had a conversation with a criminal barrister mate several years ago and he had a theory that there were two types of criminals. the first were simply too stupid to formulate a world view where in their actions had consequences. These are the sort who walk into the local service station and rob it in full view of the security cameras. Apparently, this sort of criminal is stunned when the police knock on their door.
The second sort believed they were simply too smart to get caught – these apparently are your traditional white collar criminals and politicians. They also believe they are insulated by their money and influence. In the case of the US banking/finance sector this has certainly been true.
To get a sense of the damage done to VW’s share price here is an updated chart. Although the fallout to date does seem mild.
Petty Criminal – suspended sentence or possibly time in jail if caught often enough
white collar criminal – resign post taking away between $10 and $100 million salary – seems like about 1 in 10,000 of any type of jail time
Politician – lose speakers/front bench position and resign to the back bench
Union boss – first step at becoming prime minister
I’m also guessing that if your VW is recalled so that they can fix the problem the most likely fix is to make the engine run constantly at the low pollution settings. So your recall means you get a car back with less power, runs hotter and an engine that wears out faster. How many people will volunteer for that?
I was thinking exactly the same thing Nick. VW could also be up for compensation as the car may perform quite differently to the vehicle they test drove and subsequently purchased.
The arrogance of business success! Kia about 12 months ago was fined US$ 250 million by US EPA for “misstating” their fuel consumptions for customers. Now VW will face years of fines, court cases, and negative sales and marketing conversations which will have a major impact on the business. Yet – what do we do in Aust? We just have Senate conversations about the rorts of the Banks during the GFC against weakest and most inexperienced customers and glibly allow the senior Weath Manager (involved in the CBA Bank swindles) to get paid $A 5.6 million!! Our Poly-waffle executive just waffles!! At least in USA – their executive does act at times with some relevant brutality – fining BP for their spill, the Banks and taking only 6 months to lock Bernie Madoff away for 30 years. (Although listening to some of the Jack Schwager Wizard stories – Thorpe and some others knew at least 10 years earlier about the activities of Madoff but did not report him to SEC – because at the time legal advice suggested SEC would not be interested!!
Cheers, John
They were probably paid a big bonus for this idea!
I smell a rat. Just as Europe decides it wants to phase out diesel cars. Coincidence ? It won’t just be VW that’s been fudging numbers I’m sure. (same as the rampant creative accounting in the financial world ) It’s just the Ammo the powers that be need to get the ball rolling on diesel reduction…i wonder.
BS BS everywhere !
I’m not really surprised to hear this at all. The financial stakes for being able to produce a more economical, environmentally friendly, low emissions vehicle are so high – the easiest way is to cheat! But seriously, I think that there is so much BS going around in the measurement of emissions and carbon abatement, these are not the only guys that have been caught trying to fudge their results. This is however a very insidious way of doing it.
Fortune magazine reports:
‘On Monday afternoon, Thomas Lund [one of the highest ranking former officials of Fannie Mae] settled charges brought by the Securities and Exchange Commission back in 2011 that he helped deceive shareholders of Fannie Mae in the run-up to the financial crisis.’
‘The suit claimed that Lund, who was the head of Fannie’s single-family division, helped hide more than $100 billion of subprime exposure from Fannie’s shareholders, allowing it to continue to back more and more risky loans.’
Now, here we have a clearer case. Thanks in part to Mr. Lund’s chicanery, the bubble in mortgage finance caught investors unaware. This resulted in losses of at least $8 trillion in the US stock market alone.
Mortgage debt had become a key component of Wall Street collateral. When housing prices fell, many of the big banks were faced with insolvency. Arguably, in September 2008, this brought the entire financial industry — and the world economy — to the edge of collapse.
Losses in the housing market were colossal and came with great personal suffering. We don’t remember the number. But something like 10 million households found themselves ‘underwater,’ with mortgage debt in excess of the value of their houses.
Millions of people lost their homes when lenders repossessed them.
Remember ‘jingle mail’? Underwater homeowners had no choice: they just mailed their house keys back to the mortgage companies. Whole families were living in cheap motels and improvised lodgings.
You’d think Mr. Lund would want to duck. Surely, the SEC — when it ruled this week — would throw the book at him.
But wait. Mr. Lund was in finance, not manufacturing. He was not making cars. He was not making anything!
He was taking cheap money that didn’t belong to him (thanks to the Fed’s EZ money policies) and lending it to people who couldn’t pay it back.
Thomas Lund’s parting gift…So, when Mr. Lund looked up at the judge on Monday…and said, ‘Judge, what will be my fine?’…the judge didn’t look at Mr. Lund and say, ‘Boy, you got 99.’
Instead, Fortune continues:
‘Lund’s penalty for his role: a mere $10,000. What’s more, the penalty won’t even be considered a fine. The SEC agreed to classify the payment officially as a “gift to the U.S. government,” not an actual punishment.
‘But the worst part is this: Lund won’t even pay the penalty. The agreement allows Fannie to make the payment for him, which it has agreed to do. And don’t forget: The government had to bail out Fannie and still controls it.’
Of course, Lund was not a German industrialist. He was a true American crony.