VW not first manufacturer to use deceptive emissions tactics

Almost as soon as governments began testing vehicle emissions, automakers found ways to cheat.

In the 1970s, some cars were found to be rigged with “defeat devices” that turned off the emission systems when the air conditioning was turned on. Others had sensors that activated pollution controls only at the temperature regulators used during the tests.

“The concept of a defeat device has always been there, because there’s such an incentive for the manufacturers to cheat on the emissions tests,” said Clarence Ditlow, executive director of the Washington-based Center for Auto Safety. Volkswagen AG“took it to another level of sophisticated deception we’ve never seen before.”

The scandal now engulfing VW, which has admitted to outfitting cars with software designed to give false readings on emission tests, is unique both for its size and digital complexity. But it’s not the first emissions-cheating case, even for the Wolfsburg, Germany-based company.

On July 23, 1973, the U.S. Environmental Protection Agency accused the automaker of installing defeat devices in cars it wanted to sell in the 1974 model year. VW then admitted it had sold 1973 model year cars with the devices, which consisted of temperature-sensing switches that cut out pollution controls at low temperatures.

Cadillac case

The EPA suspected VW sold 25,000 vehicles with the cheating technology. Then-Attorney General Elliot Richardson took the company to court for violating the Clean Air Act. They settled with a $120,000 fine without admitting any wrongdoing.

“Our relations with the EPA are too important to permit us to become involved in an adversary proceeding on a matter of questionable significance,” VW said at the time, explaining why it paid the penalty.

General Motors Co. agreed in 1995 to pay $45 million after being accused of circumventing pollution controls on 470,000 Cadillac luxury sedans. The cars’ 4.9-liter V-8 engines were tuned to turn off pollution controls when the air conditioning ran, the EPA said at the time.

The government alleged the engines, which were installed from the 1991 through 1995 model years, ended up releasing 100,000 tons of excess carbon monoxide into the atmosphere. GM disagreed, saying it was paying the fine as part of a conciliatory approach to dispose of enforcement cases more quickly.

“We strongly disagree with the allegations made by the federal government,” GM said at the time. “This is a matter of interpretation of current regulations regarding the complex issue of off-cycle emissions.”

Community service

Besides agreeing to cover $25 million in recall costs, GM paid an $11 million fine and agreed to spend $9 million in “corporate community service.” To help the cause of cleaner air, the Detroit-based automaker agreed to buy back older, more polluting cars and provide school districts with buses powered by batteries or natural gas.

The EPA says VW has admitted to using defeat devices in the 482,000 cars now under investigation in the U.S. The agency says the device built into the cars sensed when they were being tested on a dynamometer. During those times, the car uses an emission control system that traps nitrogen oxide, a key ingredient in smog. When the car senses it is on the road, it cuts back on the emission control—releasing from 10 to 40 times the permissible amount of nitrogen oxide.

“It takes a very savvy program to fool the computer and detect the sophisticated test cycle,” said Stanley Young, spokesman for the California Air Resources Board, which is also investigating VW. “This was clearly well thought out and took a lot of programming.”

Cummins fined

“Engines these days are very complicated,” he said. “So there is a sophisticated and powerful computer inside all cars, and that was where this algorithm, this ‘second routine,’ was embedded.”

VW could be fined as much as $18 billion and may have to recall and fix the cars in the U.S. European authorities are conducting their own investigation, as are those in South Korea, which could result in further penalties.

VW has apologized for the cheating and vowed to earn back the trust of consumers. CEO Martin Winterkorn quit Wednesday, saying the company needs a fresh start.

The current VW case resembles a 1998 case involving seven manufacturers of heavy-duty truck engines: Caterpillar Inc., Cummins Inc., Detroit Diesel Corp., Mack Trucks Inc., Navistar International Transportation Corp., Renault Vehicules Industriels, S.A. and Volvo Truck Corp.

Civil fines

The companies agreed to spend more than $1 billion, including $83.4 million in penalties, to settle the case—the biggest civil fine to that point for violating an environmental law. Attorney General Janet Reno cautioned the industry that “an ounce of compliance is worth a pound of penalties.”

As with VW, the truck-engine makers used software to alter pollution control technology under highway driving conditions. The engines met emissions limits when they ran on the EPA’s 20- minute federal test procedure. On real-world highways, they spewed up to three times the legal limit for nitrogen oxide, regulators said. The result was 1.3 million tons of excess nitrogen oxide in 1998 alone, they said.

The industry agreed to spend more than $850 million to accelerate the development of cleaner engines, to rebuild older engines and recall pickup trucks that were equipped with defeat devices.

Ford, Honda

Also in 1998, the Justice Department and the EPA settled a $267 million case with Honda Motor Co. and a separate $7.8 million case with Ford Motor Co. for selling cars with systems designed to defeat emissions control systems.

Last year, Hyundai Motor Co. and Kia Motors Corp. agreed to pay the equivalent of $350 million in fines, forfeited credits and certification testing to settle U.S. claims that they overstated fuel economy on the window stickers car buyers see at dealer showrooms.

The companies tested cars only at optimal temperatures and used the best results rather than averages, according to the EPA. The inflated mileage claims affected 1.2 million vehicles sold in the U.S.

“Hyundai has acted transparently, reimbursed affected customers and fully cooperated with the EPA throughout the course of this investigation,” David Zuchowski, president and chief executive officer of Hyundai Motor America, said in a statement at the time. “We are pleased to put this behind us.”

Debit cards

The Korean automakers agreed in 2012 to compensate consumers for the misleading mileage claims by issuing debit cards to affected customers. The rating on the Kia Soul’s window sticker was lowered by 6 miles per gallon, and most of Hyundai and Kia’s other U.S. models were adjusted down by 1 or 2 miles per gallon.

Ford Motor Co. had to lower its fuel-efficiency estimates for certain models twice in less than a year, citing a computer- modeling error. The Dearborn, Michigan-based company sent out payments ranging from $200 to $1,050 to pay 200,000 customers last year.

“Volkswagen made a point in selling these cars that they’re clean, they’re peppy and they’re high mileage,” said Frank O’Donnell, president of Clean Air Watch, a Washington-based environmental group. “It’s too bad their technology wasn’t as good as their ads.”