Volkswagen Emissions Scandal: A Case Study

Introduction

• A small team from the University of West Virginia exposed a massive corporate fraud.
• The team included students Mark Besh and Arvind Thiruvengadam, professors Greg Thompson and Dan Cater.

The Research Project

• Initial goal: Confirm that small diesel engines in the US were cleaner than those in Europe.
• Focused on Volkswagen's clean diesel technology claims.

Discovery of the Fraud

• Key Finding: Discrepancy between lab results and real-world emissions.
  • In the lab: Cars appeared clean and efficient.
  • On the road: Emissions up to 40x higher than allowed.
• Realization that cars behaved differently in different settings (Jekyll and Hyde).

The Deceptive Technology

• Volkswagen used sophisticated software to cheat emissions tests.
• "Defeat device" detected when cars were tested and altered performance.

Consequences

• Impact on Volkswagen:
  • 30% drop in share price.
  • CEO Martin Winterkorn resigned.
  • Potential legal consequences, including jail time for executives.
• Environmental Impact:
  • Significantly higher pollutants emitted than reported.
  • Equivalent to millions more cars on the road.

Regulatory Response

• California Air Resources Board re-tested vehicles with new methods.
• Confirmed high emissions outside lab conditions.

Cultural and Corporate Context

• Driven by ambition to become the top automaker, surpassing Toyota.
• VW's culture under CEO Martin Winterkorn pressured results over ethics.

Conclusion

• Volkswagen's fraudulent practices were exposed by a small university team.
• The scandal poses an existential threat to VW and has significant environmental implications.

Further Information

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