Honestly, I didn’t expect VW Wondered Aloud If Diesel Cheating Would Lead To Indictment would be topped, but the wonders of subpoena power are vast. The U.S. government managed to dig up some eye-popping shit to build its Dieselgate case, much of which was revealed when indictments against six high-level employees were unsealed on Wednesday.
To recap, the U.S. Department of Justice laid out who the employees were Wednesday:
Heinz-Jakob Neusser. From July 2013 until September 2015, Neusser worked for VW AG as head of Development for VW Brand and was also on the management board for VW Brand. From October 2011 until July 2013, Neusser served as the head of Engine Development for VW.
Jens Hadler. From May 2007 until March 2011, Hadler worked for VW AG as head of Engine Development for VW.
Richard Dorenkamp. From 2003 until December 2013, Dorenkamp worked for VW AG as the head of VW’s Engine Development After-Treatment Department in Wolfsburg, Germany. From 2006 until 2013, Dorenkamp led a team of engineers that developed the first diesel engine that was designed to meet the new, tougher emissions standards in the United States.
Bernd Gottweis. From 2007 until October 2014, Gottweis worked for VW AG as a supervisor with responsibility for Quality Management and Product Safety.
Oliver Schmidt. From 2012 through February 2015, Schmidt was the General Manager in charge of the Environment and Engineering Office, located in Auburn Hills, Michigan. From Feb 2015 through Sept. 2015 Schmidt returned to VW headquarters to work directly for Neusser, including on emissions issues.
Jürgen Peter. Peter worked in the VW AG Quality Management and Product Safety Group from 1990 until the present. From March 2015 until July 2015, Peter was one of the VW AG liaisons between the regulatory agencies and VW AG.
If you’re looking for a nice morning read, there’s a solid tick-tock over at Bloomberg on how VW officials responded once the scandal began to emerge. In the meantime, here’s a recap of some of the crazier items from the indictment, which is included at the end.
The government’s indictment describes how the genesis of the Dieselgate scandal dates to 2006, when VW employees, working under Dorenkamp and Hadler were designing the new Gen 1 2.0-liter diesel engine. It would be the “cornerstone of a new project to sell passenger diesel vehicles in the United States,” the indictment says. In what became known as the “US ‘07" project, selling diesel vehicles was of paramount interest to VW’s strategy.
The parties involved soon realized they couldn’t design the engine to meet strict NOx standards. So, as we all know, a defeat device cheat was designed to cheat U.S. emissions tests. The indictment says Dorenkamp, Hadler, and others, referred to the software cheat as the “acoustic function,” “switch logic,” “cycle beating,” or, perhaps the most obvious function of its design: “emissions-tight mode.”
During 2006, Dorenkamp allegedly authorized engineers to install the defeat device in the development of the US ‘07 project, despite concerns being raised internally by “certain” VW AG employees. Here’s the interesting part:
Throughout 2007, various technical problems arose with the US’07 project that led to internal discussions and disagreements among members of the team that was primarily responsible for ensuring vehicles met U.S. emissions standards. Those disagreements over the direction of the project were expressly articulated during a contentious meeting on our about October 5, 2007, over which HADLER presided. As a result of the meeting, HADLER authorized DORENKAMP to proceed with the US’07 project despite knowinng that only the use of the defeat device software would enable VW diesel vehicles to pass U.S. emissions test.
Hm, part of me wonders how those certain VW employees are feeling today.
In 2012, some of the VW vehicles equipped with the 2.0-liter diesel engine in the U.S. were experiencing hardware failures. The indictment says VW engineers “hypothesized that vehicles equipped with the defeat advice” remained in the “testing mode” even as they were driven on the road outside of testing conditions.
So, in 2012, Gottweis and Neusser were called to explain in separate meetings with the VW Brand Engine Development department exactly why they believed the software cheat was causing the hardware failures. I’ll let the government take it from here:
To illustrate the software’s function, the engineers used a document. Although GOTTWEIS and NEUSSER understood the purpose and significance of the software, they encouraged further concealment of the software.
Specifically, GOTTWEIS and NEUSSER each instructed the engineers who presented the issue to them to destroy the document used to illustrate the operation of the cheating software.
The results of the West Virginia University’s Center for Alternative Fuels, Engines and Emissions on VW emissions quietly emerged in March 2014, but the findings made it to Neusser, Gottweis, Schmidt, and Peter. So what’d they decide to do?
In response to learning the results of the [International Council on Clean Transportation] study, engineers in the VW Brand Engine Development department formed an ad hock task force to formulate responses to questions that arose from the U.S. regulators. VW AG employees, including NEUSSER, GOTTWEIS, SCHMIDT, PETER, and their co-conspirators determined not to disclose to U.S. regulators that the tested vehicle models operated with a defeat device. Instead, NEUSSER, GOTTWEIS, SCHMIDT, PETER, and their co-conspirators pursued a strategy of concealing the defeat device in response to questions from U.S. regulators, while appearing to cooperate.
Geez, what do the minutes from that committee meeting say?
- Should We Cover This Shit Up?
- Now, That We Are, How Do We Do It?
Anyway, that August, Schmidt apparently met with another VW employee and regulators to discuss discrepancies in the vehicles. The indictment says he offered up excuses like “irregularities” or “abnormalities”—not “cheat.”
Two weeks later, on Aug. 18, a script was approved to be followed by VW employees in speaking with regulators about what was happening, and included further concealing the lie. Apparently they botched the script, because the indictment says, the following day, an unnamed VW employee explained “for the first time to U.S. regulators and in direct contravention of instructions from management at VW AG” and “[signaled] that VW had cheated on the U.S. emissions test.” As Bloomberg noted, officials began deleting documents like crazy.
And as we noted in The Morning Shift today, Bloomberg has the kicker:
On Oct. 17, 2007, a slide containing explicit engineering terms for the defeat device was passed around to Hadler and others, and he responded, in German, “We shall never present this anywhere and will also not distribute it,” the U.S. said. A month later, Hadler sent an email to Dorenkamp that included photos of himself posing with California’s governor — then Arnold Schwarzenegger — at an event where VW’s cars were promoted as “green diesel.”
What a mess.
The full indictment is below.