The Car Manufacturers' Libor Scandal
We have become used to tales of banks breaking rules, evading regulation, rigging rates and being fined eye-watering amounts of money when caught. But now their ranks have been joined by an automobile manufacturer. The German giant Volkswagen has been caught rigging the results of emission tests on diesel automobiles.
The emission tests are designed to ensure that new automobiles meet stringent anti-pollution requirements. America’s love affair with automobiles means that air quality can be a problem, particularly in cities. The Environmental Protection Agency therefore places limits on the toxic emissions of automobiles to prevent air quality deteriorating to the point where it threatens human health and the environment.
But this depends on automobile manufacturers cooperating. And Volkswagen, the largest seller of diesel automobiles in the US, decided that emissions regulations could be optional for its products.....Read on here (Forbes).
Polemic Paine came to similar conclusions (and even a similar title). And he adds a dimension that I hadn't thought of:
To be honest I don’t care too much if my car burps out more NO2 than declared in a test as long as I am street legal and the low running costs I am enjoying don’t change. But the tax man certainly does. I may decide not to buy a car if it jumps up a car tax band due to emissions but if the taxman has been defrauded out of billions due to cars being declared at a different tax band to where they actually lie then that is as good as fiddling your tax returns. The pollution issue is minor compared to what happens when you defraud a tax authority and this is where people go directly to jail."Made in Germany" lies in the gutter, according to the Telegraph:
VW's conspiracy to rig emissions exposes it as the 'Lance Armstrong' of the car industry, once again revealing corrupt reflexes in German boardrooms.Not that this is likely to be limited to German companies. The fallout could be substantial for car manufacturers in many countries. As Polemic says, now is not a good time to be a large corporation.