Cheating, No Problem: Automakers Win Again in Europe

They run the show.

By Don Quijones, Spain & Mexico, editor at WOLF STREET.

Brussels, Europe: A more wretched hive of corporate lobbyists, law firms, and money-grubbing apparatchiks you will struggle to find. The latest example of lobbying influence is one of the most egregious yet, since it will affect the quality (or lack thereof) of the air breathed by millions of Europeans for the foreseeable future.

Tough Talking

From September 1, 2017, new car models will have to pass a new emissions test before they can be put on the market. According to many headlines, the new tests are much tougher than the previous ones. “EU Car Emissions: Tough New Tests Backed,” proclaims the BBC. “EU Parliament Takes Tough Stance on Emissions Tests,” thunders the trade journal Automotive News Europe.

The word “tough” normally evokes the idea of strength or resolution, something that is not easily broken or made weaker or defeated. Not so in this case. In the EU’s “tough” new tests, car models sold after September 2017 will not be allowed to “exceed nitrogen oxide emission levels by more than twice the technical limit,” reports the BBC.

Put another way, cars will be allowed to spew out twice the legal limit of nitrogen oxides (NOx) – or as a matter of fact, more than that (110%) – until 2020, and by up to 50% more from then on. The EU has just dramatically raised the emission limit instead of lowering it. So much for toughness.

The really funny thing (in the classic “if you don’t laugh, you have to cry” sort of way) is that the main purpose of the new rules is to regain public trust and confidence in Europe’s car industry.

“Public trust and consumer protection are at stake,” the European Union’s industrial policy chief, Elzbieta Bienkowska, told a business audience in Brussels on Oct. 22. “The only way in which we will restore public confidence is by acting quickly, collectively, coherently, and effectively. National authorities must play their role and work as active partners.”

Foregone Conclusion

Unfortunately, some national authorities seem to have taken their “active” role just a little too far. Bienkowska’s original proposal to the Technical Committee for Motor Vehicles was to let real-world NOx emissions exceed permissible discharges by no more than 60% between September 2017 and September 2019, when the actual EU limit of 80 milligrams a kilometer would finally be enforced.

During the meeting a group of non-car producing nations headed by Denmark pushed for even stricter limits. They faced a wall of opposition, though, from some of Europe’s biggest car manufacturers, Germany, France, the UK and Spain, all of whom are currently facing court action from the EU for failing to meet NO2 standards, as well as Europe’s biggest car lobbies.

The outcome was a foregone conclusion: in short order, “60%” over the limit became “110%” over the limit and “strict compliance of the 80mg limit” became “no more than 50% over.” Until September 2017, when the new “limits” kick in, Europe’s diesel vehicles will be able to continue belching out as many pollutants as their manufacturers choose – as long as they do so honestly, without using defeat devices.

Naturally Europe’s car manufacturers and their trade associations are thrilled. The European Automobile Manufacturers Association (ACEA) heralded the decision as a “robust but realistic package that will address the key environmental issues under a two-step approach.” The exemptions – known as conformity factors – were needed to “prevent or at least minimize earnings shortfalls,” the industry argues.

And in Brussels what industry wants, industry invariably gets, especially when industry is struggling. And right now things are looking particularly bleak for Europe’s car industry. Dieselgate has already wiped more than a quarter off the stock value of Europe’s biggest car manufacturer, Volkswagen. It has also forced out its long-time chief executive and tarnished a business held up for generations as a model of German engineering prowess.

On Wednesday, VW posted its first quarterly loss in at least 15 years after setting aside €6.7 billion to cover the cost of rigging diesel emissions tests. The final bill is likely to be considerably higher.

Most important of all, Volkswagen’s scandal has cast a dark, noxious cloud over all diesels. And with diesel cars accounting for one out of every two passenger vehicles in Europe, the threat to Europe’s car manufacturers cannot be overstated. Presented with the choice of safeguarding Europe’s car industry, which just happens to be one of the biggest lobbying forces in Brussels, or safeguarding the air people breath, the European Commission did what it always does – it let money do the talking. By Don Quijones, Raging Bull-Shit.

And this is the exquisite irony of Dieselgate. Read… Big VW Investors Lose Shirts, Blame Lobbying

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  12 comments for “Cheating, No Problem: Automakers Win Again in Europe

  1. Paulo says:

    Along with NIRP motivation, I suppose any Europeans left with money in 2017 might buy a car. What a joke. Mass brainwashing and mass consumer movements all encouraged by so-called Governments that supposedly exist to look after its citizens.

  2. NY Geezer says:

    For 11 of my 40+ working years I prosecuted environmental law violators. I did this not to create a career for myself in government service. I did it because I believed I was doing something of value. I believed that every endeavor to prevent or at least reduce environmental pollution mattered and would be an important contribution to the quality of life of my generation and future generations. I believed that the collective efforts of those who cared would have an impact.

    I have lived long enough to know I was wrong.

    The people who have no concern about whether they cause environmental damage are now in power. Their entitlement to profits trumps everything else. I blame not only to the European auto manufacturers. I blame these who deny that climate change is occurring.

    I blame the policies of many third world governments and policy makers that are prepared to sacrifice the planet’s habitability on the alter of very aggressive economic growth for their selfish economic goals and careers.

    I blame China for being willing to allow the pollution the air and its soil. Those air pollutants cause a lot of harm in China initially, and over time are transported around the world by weather systems.

    I blame Indonesia, for allowing its forests to be cleared by fire and the land which is composed largely of peat to be drained by canals for planter profits in palm oil and pulp wood. Now almost the entire surface of Indonesia is a series of raging peat fires. Its shocking that this event is hardly reported when it is emitting more pollutants, such as methane, carbon monoxide, ozone and exotic gases such as ammonium cyanide, into the air than Volkswagon ever will.

    • roddy6667 says:

      Everybody forgets how polluted America’s water, land and air was until tje 1970’s. Pittsburg and Bethlehem had gray snow from the steel mills. The Cuyahoga River used to catch fir on a regular basis from all the flammable industrial liquids. The East River in NYC was fodder for jokes for standup comedians for decades. LA’s air was nearly unbreathable, along with many other American cities. Living in Boston was the equivalent of smoking a pack of cigarettes a day.
      Now Americans and other Westerners criticize China for doing what they did when they were a manufacturing nation. It’s easy to have clean air when you have no industry.

  3. Whoz says:

    The emissions equipment suppliers in Germany are scrambling. A major producer wants to double its DeNOx catalytic capacity by the end of 2016.

  4. NJ Geezer says:

    I enjoy reading “Don Quijones” regularly. I particularly like that he covers parts of the world from which i would not normally receive news. In this particular instance his umbrage may be excessive. Not sure that nitrogen oxide emission is something we need to be too concerned about. I believe that HC and CO emissions are far more deleterious. Of course, i am one of those dinosaurs who is not too concerned about carbon dioxide emissions either. I always thought that trees were good for the planet.

    (love your handle NY Geezer, so i ripped it off. Imitation, the sincerest form of flattery)

  5. Jeff says:

    I honestly don’t think the auto industry currently has a viable solution for NOx without sacrificing performance and drive ability to levels that consumers would except. That is why VW choose the option of cheating instead of producing cars that are clean across the entire drive cycle, if they can even achieve this goal with today’s technology. I would have loved to be a fly on the wall in one of those meetings late at night in the VW R&D offices. ” Hanz, Fritz, we have a problem…. can we fix it? No. Ok,fuck it…. lets install some trick software and just cheat…. Das Auto!

    It’s unfortunate, because I really like the new Diesel engines from Porsche,(Audi / VW) found in the Cayenne, Macan and Panamera. Great power and torque with a sweet power delivery! Interesting thing is they only started fitting “Ad Blu” to the cars starting in 2015. I have a feeling that the cars produced from 2011 to 2014 are most likely “real world” heavy NOx offenders too.

    NOx is one of those damned if you do, damned if you don’t scenarios. We got CO and HC’s under control, but the higher combustion temps produce NOx… so, we fit EGR systems to lower combustion temps, but hurt performance in the process. Petrol cars have finally struck a balance between performance and emissions. DFI and catalytic converter technology have played a big role in this. But Diesels are a different animal all together. EGR is not enough to control NOx, more so on the small displacement motors ( VW ). So they fit selective non-catalytic reduction (SNCR) systems and diesel particulate filters. But, this is still not enough to bring NOx to “legal” levels across the entire driving cycle. SNCR works great @ Idle and low revs, but its fails to adequately control NOx levels at higher RPM’s. Hence the current quagmire the auto industry finds itself in today. SNCR technology has not kept up to meet the “strict” emission levels. So it all boils down to this in my opinion. I can see why the likes of VW did what they did. They were faced with the option of delaying their “Clean Diesel” campaign and product line with the huge profits that came with it or simply get “creative” with their software and cheat the system. I really doubt they spent much time deciding what option to do. Money talks, and they have a bottom line to meet, period, end of story. And as we are starting to figure out, this is just not a VW issue, this is a industry wide problem. They all cheated in different ways, but the common denominator is the same…. the current technology is just not up to the task, or more accurate, it is not practical to fit at this point. The consumers, the auto industry, the hardcore environmentalists, all of us, we want to have our cake and eat it too!! Not gonna happen folks…

  6. Whoz says:

    …typical of top down goal setting…..”if you can’t accomplish the impossible then change the rules.”

    I worked for large companies for 30 years and it is pretty funny to see the hypocrisy in management. On one hand all of the non-incentive compensation people were expected to meet their goals and objectives with no modification to the playing rules regardless of things out of their control, on the other hand the managers with incentive based compensation scheme were doing everything they could to scheme, cheat the system and change the rules when they were up against the impossible or things they could not really control.

    You quickly see the integrity of the managers when they start playing wasteful games in order to just make their numbers…

    It is corporate Darwinism. The people who can play the game and make their goals on paper will quickly over take the people with integrity and honesty. I guess that is why there are so many sociopaths in higher management.

    I was intrigued by the GM ignition issue and my own experience in Quality Control at a major auto parts supplier. As soon as the news broke, I said it wasn’t a failure of a “greedy company” just wanting to save a few cents. It was instead an organizational failure of every department trying to protect their numbers (ie. goals) by not offering to work together to fix the problem. Nobody was authorized to take the hit on his budget, and then have is budget modified so he still would make his goals and thus his bonus.

    I saw it four years before where I worked. When Purchasing got separated from the plants and went centralized. Engineering Changes (EC) with cost increases, but quality improvements were routinely rejected by the Purchasing Department because they no longer shared the same goals. Purchasing would take the hit in their budget for cost of the quality improvement, yet see no benefit. Therefore the EC was rejected, no mater how important it was. It added delays and head aches for the engineers trying to solve real problems.

    I don’t have all the facts but, I can’t help but feel the VW situation is similar. For example, the motor development manager was given conflicting goals, fuel economy and emissions, and told his bonus was dependent upon meeting the goals. The manager’s goals are typically passed down to his group as well. One clever engineer said “that is easy, we will just use two engine control programs.” On the other hand, it had to be widely know in VW because the software would have to undergo validation testing to prove it worked and you just can’t test something to see if it works, for which there is no written specification on how it is supposed to work. I’m just surprised a whistle blower did not come out before hand.

    Where I worked before, we had annual compliance and product liability training and were basically told to squeal to the legal department if we saw anything fishy. I guess the legal department could always turn a blind eye though.

    • MC says:

      Really fascinating, and it confirms what I learned during my real-life experience as opposed to all those nice things they teach in management courses about “working as a team”.

      Just one thing: the original source of the programming used by VAG is Bosch. Bosch has already admitted they supplied the code to VAG but they claim they did so only for “research, experimental and racing purposes”.
      Bosch supplies patent licenses, components and code lines to pretty much everybody manufacturing passenger diesel engines these days so it would be nice to see a list of all the manufacturers they supplied the same code lines for “research, experimental and racing purposes” and then see who resisted the urge…

    • Wolf Richter says:

      Thanks, Whoz. This confirms my suspicions, having dealt with Ford for 10 years.

  7. Wars. #ISIS. Planet destroying smog. Bottomless, borrowed subsidies. Exhaustion of non-renewable capital … and non-renewable purchasing power. The vast waste of time. Over a million direct deaths every single year; violent, crushing, burning deaths. Millions more maimed or wounded.

    These go with our precious toys along with the extended warranty and the spare tire. We love our toys so much, we throw everything else away.

    No worry, the toys have bankrupted us, all that remains is to sweep up the debris … if anyone is left after the process of self-driven ruin has exhausted itself, that is.

  8. J P Frogbottom says:

    Gee, no longer shall I feel “guilt” driving my old 1993 Cadillac Fleetwood, when my Fusion Hybrid sits unused in the garage.

    The EU top brass says go ahead, crap on the world as we have done for 100 years, carry-on. So, I guess the unused miles can now be added guilt-free!!

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