VW Engineers Wanted O.K. From the Top for Emissions Fraud, Documents Show
FRANKFURT — Even after Volkswagen
pleaded guilty to a nine-year conspiracy to dupe regulators and
consumers, the carmaker has continued to insist that top executives
played no role in the emissions fraud.
internal company emails and memos, which were reviewed by The New York
Times, indicate that engineers wanted approval from top managers to
deploy the illegal software almost from the beginning, with regular
status reports noting that high-level signoff was necessary.
emissions issue was the main agenda for a 2007 meeting attended by
Matthias Müller, the current chief executive, who was then Volkswagen’s
head of product planning, as well as Martin Winterkorn, the chief
executive at the time. A presentation for the meeting detailed plans to
conceal excess emissions of diesel cars in the United States, including
the so-called defeat device at the center of the crime.
said there was no evidence that either executive saw the presentation.
An internal summary of the meeting prepared shortly after it took place
made no mention of the illegal software. Mr. Mueller and Mr. Winterkorn
have denied wrongdoing.
Volkswagen Group is aware of the documents,” the company said in a
statement, “and they do not support the inference that Matthias Müller
knew about efforts to develop and use the defeat device.”
the documents, along with the continuing criminal investigations in the
United States and Germany, signal that the scandal is creeping closer
to Volkswagen’s boardroom.
prosecutors said on Wednesday that Mr. Müller was under investigation
over whether he had failed to warn shareholders soon enough about the
scandal. German authorities have searched the offices of Mr. Müller and
other senior executives. A federal judge in the United States called
last month for top managers to be held responsible.
is a case of deliberate, massive fraud perpetrated by Volkswagen
management,” Judge Sean F. Cox of Federal District Court in Detroit said
at Volkswagen’s sentencing in April.
“We don’t know how far up this goes,” he added. “We hope the Justice Department will find and prosecute those responsible.”
after the meeting, engineers moved forward with the deception, putting
the defeat device in models that went on sale the next year. In the
ensuing years, the carmaker installed the illegal software in 600,000
Volkswagen, Audi and Porsche diesel cars sold in the United States, out
of 11 million fitted with the device worldwide.
on that scale “doesn’t happen without a set of incentives — fear, a
feeling that even if this is not directly ordered, it is what was
expected,” said David Bach, a senior associate dean at the Yale School
employees have been charged in the United States over the deception and
another has pleaded guilty. No former or present members of the
management board have been charged with wrongdoing. The American
investigation is continuing, and F.B.I. agents are interviewing
witnesses, according to lawyers in the case.
prosecutors said Wednesday that they had found enough evidence to
warrant a formal investigation of Mr. Müller on accusations that he was
aware of the looming emissions scandal but failed to warn shareholders.
Shares of Volkswagen and Porsche Automobil Holding, which controls a
majority of Volkswagen shares, plunged after the deception came to light
and have only partially recovered.
Müller is identified as a suspect in connection with his membership on
the management board of Porsche Automobil Holding. In a statement,
Porsche denied wrongdoing by any of its board members.
top-echelon managers knew of the emissions cheating, and if so, when,
has major implications for Volkswagen’s finances. Shareholders in Europe
and the United States have sued, claiming that members of the
management board neglected their duty to warn of risks that could affect
the share prices.
deception began in late 2006, when Volkswagen engineers realized that a
new diesel engine would not meet pollution standards in the United
States. Executives just below the management board devised a plan to use
software to conceal the cars’ emissions.
documents reviewed by The Times make it clear that the lower-ranking
executives were concerned about acting without approval from top
May 2007, one status report on the progress of the new diesel engine
noted that high-echelon approval was needed for “off-cycle
functionality.” That was code for software that would allow cars to
produce more emissions outside the simulated driving pattern, or
“cycle,” used by regulators to test cars on rollers in a lab.
requests for management approval later disappeared from the status
reports, but not the emissions issue. By November 2007, the company’s
plans to recapture past glory in the United States were seriously behind
schedule and over budget. Mr. Winterkorn, the chief executive at the
time, scheduled an emergency meeting.
presentation prepared for the meeting described a function known as
“emissions tight mode.” That was another way of describing software that
would behave differently under test conditions.
to the document, the mode would step up pollution controls and ensure
low emissions when software detected procedures used during tests by
United States regulators. The parameters of those tests were publicly
known and predictable.
Nov. 7, 2007, a day before the planned meeting, the presentation was
sent as an email attachment to more than a dozen managers just below the
top layer of management. The email included a warning to recipients not
to forward to anyone else.
evening, a second presentation was distributed to a smaller group,
including several managers, although not Mr. Winterkorn or Mr. Müller.
presentations noted that the new engine could not meet nitrogen oxide
standards with the existing equipment, and proposed improvements that
would cost about 270 euros (about $298 under today’s exchange rates) a
the second presentation did not include the appendix describing the
specifics of the defeat device. It is not clear why that information was
deleted and what specifically was presented at the meeting.
internal summary of the meeting, reviewed by The Times, said, “The
situation regarding technology was acknowledged, and the implementation
of the presented measures was confirmed.”
the meeting, Volkswagen delayed sale of the new motor in the United
States by a year, to late 2008. The company made some improvements to
the motors’ emissions systems, but they were not enough.
late 2008, Volkswagen began selling a new generation of diesel cars in
the United States, claiming falsely that the technology was an
environmentally friendly alternative to Toyota hybrids. Instead, the
company was using a defeat device to cheat regulators.