Volkswagen is facing a crisis spanning technology, branding, and finance as it responds to a notice of violation (NOV) issued by the EPA, alleging that certain diesel cars include software—a “defeat device”—that circumvents emission standards.
“Using a defeat device in cars to evade clean air standards is illegal and a threat to public health,” said Cynthia Giles, assistant administrator for the Office of Enforcement and Compliance Assurance. “Working closely with the California Air Resources Board, EPA is committed to making sure that all automakers play by the same rules. EPA will continue to investigate these very serious matters.”
The EPA elaborated in a statement: “As described in the NOV, a sophisticated software algorithm on certain Volkswagen vehicles detects when the car is undergoing official emissions testing and turns full emissions controls on only during the test. The effectiveness of these vehicles’ pollution emissions control devices is greatly reduced during all normal driving situations. This results in cars that meet emissions standards in the laboratory or testing station, but during normal operation, emit nitrogen oxides, or NOx, at up to 40 times the standard. The software produced by Volkswagen is a ‘defeat device,’ as defined by the Clean Air Act.”
Volkswagen already has set aside $7.3 billion to address the crisis, but that may not be enough. It faces fines of up to $18 billion from U.S. regulators alone, related to roughly 482,000 affected vehicles sold in the country since 2008. According to a report in The Wall Street Journal, VW’s CFO must estimate the final bill for the problems, determine what liabilities insurance might cover, and decide whether to cut dividends.
It’s too often the case that manufacturers take too long to identify problems, fail to recognize the severity of the problems, and are slow to make repairs. But in the case of GM’s ignition switch problem, for example, no one sat down to deliberately design a defective part. Writing in The Wall Street Journal, communications consultant Andrew Hennigan sums it up this way: “VW’s problem appears to be the result of a premeditated design decision….”
VW isn’t the only automaker to seek to circumvent environmental regulations, as The New York Times notes in an article titled “Volkswagen Test Rigging Follows a Long Auto Industry Pattern.” But VW seems to have taken the effort to a new level.
The software-centric nature of the problem suggests that the potential for trouble will expand as software becomes pervasive inside and outside of the automotive industry—affecting applications from medical devices to voting machines. Zeynep Tufekci, an assistant professor at the School of Information and Library Science at the University of North Carolina, writes in The New York Times that we have entered the “era of cheating software” or “Internet of Cheating Things.”
Tufekci offers several recommendations for dealing with this new era. First, test smart objects “in the wild”—not just in the lab. Second, don’t allow manufacturers to hide behind copyright claims. Software needs to be evaluated by commissions under regulatory control, but today that’s often difficult. And third, examine what software is doing by examining its outputs—creating auditable, hard-to-tamper-with logs that regulators can inspect.
As for VW, the company reportedly has a technical fix as this article goes to print. A fix to its reputation might be more difficult. In the Journal, Jennifer Vickery, CEO of National Strategies Public Relations, says the company must “… communicate in a new way,” perhaps using social media to describe its investigation and the steps it is taking to eliminate problems.
For more on this topic and for links to sources cited in this editor’s note, please visit my blog.
Rick Nelson, Executive Editor.
