Bosch Knew VW Might Get Nailed For Diesel Cheating, Demanded Indemnification: Report

Illustration for article titled Bosch Knew VW Might Get Nailed For Diesel Cheating, Demanded Indemnification: Report
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Good morning! Welcome to The Morning Shift, your roundup of the auto news you crave, all in one place every weekday morning. Here are the important stories you need to know.

1st Gear: The Plot Thickens

Germany’s Robert Bosch GmbH supplied the engine management system to Volkswagen implicated in the diesel emissions cheating scandal. Naturally, this has led observers (and lawyers) to wonder who knew what and when. There’s already a lawsuit by vehicle owners alleging Bosch knew about the whole thing and profited from it.


To make matters potentially worse, plaintiffs now say that Bosch demanded legal indemnification from VW in 2008 because they knew it might lead to lawsuits down the line. VW refused, but Bosch kept making the system. Via Bloomberg:

Lawyers for American car owners revised an earlier lawsuit in August to enhance accusations against Bosch over its alleged role in the decade-long scheme. A copy of the lawsuit filed Friday in a San Francisco federal court removed blacked-out portions to provide a more complete picture of the allegations against Bosch.

“The evidence already proves that Bosch played a critical role in a scheme to evade U.S. emission requirements,” consumer lawyers said last month in a partially sealed filing. Among the details included in the unsealed version of the filing Friday was the demand for indemnification for anticipated liability arising from the use of the “defeat device,” as Bosch called it in the letter.

“Volkswagen apparently refused to indemnify Bosch, but Bosch nevertheless continued to develop the so-called ‘akustikfunktion’ (the code name used for the defeat device) for Volkswagen for another seven years,” the consumer lawyers wrote.

Also, this:

“In e-mails sent as early as July 2005 from VW AG’s Andreas Specht” to four Bosch employees, “Specht discussed emissions measurements from vehicles using the ‘akustikfunktion’ in connection with U.S. emission compliance.”


Makes you wonder when the regulators will start coming after Bosch.

2nd Gear: Cadillac Goes To Battle With Dealers Amid Surging Sales

The auto industry’s sales outlook may not be quite as glowing as it was a year ago, but Cadillac is doing well at the moment. The CT6 sedan and especially the XT5 crossover have proven to be strong sellers since their debut, and Cadillac says worldwide sales have jumped more than 20 percent in two months.


But that comes at a time when Cadillac is fighting with dealers over the upcoming Project Pinnacle, an improvement and reward plan those dealers say is unfair to smaller and more rural stores. Via Automotive News:

Cadillac said its worldwide sales rose 24 percent in August, to 28,228 units, including a 93 percent gain in China. Its sales are now up 4.5 percent on the year, after falling 1.5 percent in the first half.

The brand has sold 28,034 units of the XT5 and 6,695 of the CT6 sedan since they began arriving at dealerships in the spring. Together, the two nameplates represent 19 percent of the brand’s 182,188 sales this year.

Combined sales of the XT5 and the outgoing SRX it replaces are up 1.5 percent from a year ago.

In the U.S., Cadillac was the only one of General Motors’ four brands to post an increase in August. For the year to date, Cadillac’s U.S. sales are down 6.2 percent.

Cadillac said its China sales are up 31 percent on the year, to 64,489.

“We are seeing consistent progress on our mission to grow global volume while simultaneously building brand prestige,” de Nysschen said in a statement. “Product substance is the foundation of our disciplined approach to global expansion.”


Project Pinnacle starts in January, but the country’s largest state dealer association is asking Cadillac to delay it. Could this affect their sales rebound?

3rd Gear: Unifor Is Talking To GM First

Regular Morning Shift readers know there’s a fight on for the future of Canada’s auto manufacturing industry, a future that doesn’t seem so bright as more and more production gets shifted to Mexico. The poster child for that situation is General Motors’ Oshawa assembly plant, which may soon run out of cars to build as its current models complete their runs.


With union negotiations now underway, Canada’s auto union Unifor has picked GM to deal with first. Via Automotive News:

Unifor, which represents about 23,000 Canadian auto workers employed by the Detroit 3, will aim to pattern its contract talks with Ford Motor Co. and Fiat Chrysler Automobiles off a potential deal with GM. The union’s contracts with each of the automakers end on Sept. 19.

“We chose GM because we believe that is the best way to get all three companies in line with what our priorities are,” Unifor President Jerry Dias told reporters.

Unifor, Canada’s largest private-sector union, has framed this round of labor negotiations as crucial to the future of auto manufacturing in the country, which has frequently lost out on investment to Mexico and the U.S. Dias has repeatedly said the union will strike if it fails to secure investment at facilities it sees as in danger of closure: GM’s Oshawa assembly plant, Ford’s two Windsor engine plants and FCA’s Brampton assembly plant.


4th Gear: Ford Turns To The Medical Industry To Help Autonomous Cars ‘See’

Here’s an interesting science story from The Detroit News: in an effort to potentially help autonomous cars visualize objects and people better, Ford is turning to a neuroscience researcher working to restore sight to the blind. Originally the technology was applied to small robots, but Ford is working to apply it to autonomous cars, which are kind of like much bigger robots:

Humans view images — whether it’s a baby’s face or the words on this page — through photoreceptors in the retina that convert light into a form of code, which is then sent to output cells that transmit that code through specific electrical impulses to the brain. In certain degenerative eye diseases, the photoreceptors in the retina die but the output cells remain. Nirenberg found a way to send signals to the output cells through a device that acts as an artificial photoreceptor.

While she never engineered cars before, she has been developing a computer-vision platform based on this code. In the last few months she’s worked exclusively with Ford to direct it toward car applications. Ford hopes her findings can allow its vehicles to see and understand the road ahead by working with a wide range of cameras, radar and LiDAR (light detection and ranging) sensors.

“You can find innovations in other industries, including the medical industries,” said Dr. Ken Washington, Ford’s vice president of research and advanced engineering. “If you look outside of your own domain, you might find some technical gems you can apply to your problems.”


5th Gear: Apple Car Announcement Today?

Apple has a keynote event today where they’re expected to unveil the iPhone 7 and maybe the Apple Watch 2, among other things. You can watch it all here. But I think the big question is this: will we get an Apple Car announcement today?


So far Project Titan, as it’s called, has been shrouded in secrecy—even more so than usual for an Apple project. Most are speculating that it’s likely to be some kind of ride-hailing or commercial vehicle than a car you can actually buy. I think it’s going to be a testbed for autonomous technology to be used by other automakers more than anything else.

Having said that, there doesn’t appear to be a ton of Apple Car buzz surrounding today’s event, so I don’t think we’re likely to get any news. But I could be wrong. I kind of hope I am. We’ll see what happens in a few hours.


Reverse: Electric FTW


Neutral: What Should Cadillac Do About Its Dealers?

Cadillac has long been lambasted for a dealer experience that lags behind Lexus and ze Germans. Cadillac boss Johan de Nysschen is trying to get them to up their luxury sales game. How can Cadillac improve?

Editor-in-Chief at Jalopnik. 2002 Toyota 4Runner.

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Neutral: What Should Cadillac Do About Its Dealers?

They need to make them all standalone dealerships for starters. Many are still attached to other GM dealerships. Nobody wants to pay big money for a Caddy to only be waiting in the service center next to a poor driving a Sonic.

As far as experience goes, I’ve never owned a Caddy, so I can’t really compare. When I owned my Lexus, when I dropped it off for service, I drove into an enclosed garage, got out, my service advisor greeted me by name, took my information and then gave me a brand new loaner that was nicer than my four year old CPO car. No need to worry about filling it or anything. Then I bring it back into the same enclosed garage and my car is waiting for me, freshly serviced, washed and detailed. Every. Single. Time.

In the one instance I waited, they had coffee, pastries, WiFi, other drinks available for free. Oh, and if you ever had a recall performed, they’d fill your gas tank.