Jan 12 Sixteen months after admitting in
September 2015 that it cheated U.S. diesel emissions tests,
Volkswagen is still battling regulatory
investigations, investor and consumer lawsuits, and striving to
rebuild its reputation.
Following are key developments in the scandal, based in part
on information disclosed in the company's settlement with the
U.S. Justice Department on Jan. 11, 2017.
May 2006: VW admitted in the Jan. 11, 2017, settlement that
between May 2006 and November 2015, VW supervisors and VW
employees agreed to deceive U.S. regulators and U.S. customers
about whether vehicles complied with U.S. emissions standards.
2006: VW designed a new diesel engine, the EA 189 2.0 litre, for
use in the United States. When nitrogen oxide (NOx) emissions
standards were made more stringent, VW engineers realised they
may not meet the new standards. Supervisors then designed a
software device to recognise whether the vehicle was undergoing
standard U.S. emissions testing on a dynamometer. This allowed
the engine to be calibrated to meet the tests, when it was
unable to do so under normal road driving conditions.
2006: Engineers from VW's Audi brand designed a 3 litre diesel
engine for the U.S. market. In order to pass U.S. emissions
tests, Audi engineers designed and installed software to detect
May 17, 2006: A VW engineer sent an email to employees in the VW
Brand Engine Development department that described aspects of
the software and cautioned against using it in its current form
because it was a mechanism to detect, evade and defeat U.S.
emissions cycles and tests.
November 2006: VW employees briefed a supervisor on the purpose
and design of the "defeat device." During the meeting, the
supervisor decided that VW should continue with the production
of the defeat device, and instructed those in attendance, in sum
and substance "not to get caught."
April 2013: VW increased the likelihood that the vehicle could
detect an emissions test by activating a "steering wheel angle
recognition" feature. During an emissions test the steering
wheel is not turned. VW then installed the software in new and
existing vehicles through software updates during maintenance.
March 2014: In or around March 2014, certain VW employees
learned of the results of a study into VW diesel engines
undertaken by West Virginia University's Centre for Alternative
Fuels, Engines and Emissions and commissioned by the
International Council on Clean Transportation (ICCT). In
response, the VW Brand Engine Development department formed a
task force to formulate responses to questions that arose from
the U.S. regulators. Supervisors subsequently decided to pursue
a strategy of concealing the defeat device in responding to
questions from U.S. regulators, while appearing to cooperate.
May 2014: The California Air Resources Board (CARB) receives the
study published by the ICCT which shows NOx values for VW diesel
vehicles deviate significantly between bench testing and road
operation. CARB requests an explanation from VW.
May 23, 2014: A memo about the ICCT study is prepared for Martin
Winterkorn, then VW group CEO, which was included in what the
company calls his "extensive weekend email". VW says it has not
been documented as to whether, or how much, Winterkorn took
notice of the memo.
Nov. 14, 2014: Winterkorn receives another memo that contains,
among other items, information on current product defects and
which refers to costs of approximately 20 million euros ($22
million) for the diesel issue in North America.
December 2014: VW offers to recalibrate the first and second
generation EA 189 diesel engines as part of regular service work
in the hope that the engines will then pass muster with CARB.
In 2014: Winterkorn received information on problems with U.S.
diesel emissions tests. The issue "did not initially receive
particular attention at the management levels" since management
regarded it as a "technical problem that did not differ from
other everyday technical problems," VW said in a 2016 statement
summarising its response to a shareholder lawsuit.
Summer 2015: VW's Committee for Product Safety (APS) establishes
a diesel task force after CARB tests show modified engines still
produce excessive levels of NOx. VW retains U.S. law firm
Kirkland & Ellis to advise on questions related to U.S.
July 27, 2015: After U.S. regulators threatened not to certify
VW model year 2016 vehicles for sale in the United States, some
VW employees discuss the U.S. diesel problems on the sidelines
of a regular meeting about damage and product issues, in the
presence of Winterkorn and Herbert Diess, head of the VW brand.
VW says it is still constructing details of the meeting, and
establishing whether those present understood the change in
software violated U.S. regulations. VW says Winterkorn asked for
further clarification of the issue.
Aug. 18, 2015: Supervisors approved a script to be followed by
VW employees during an upcoming meeting with CARB in California
on or about Aug. 19, 2015. The script provided for continued
concealment of the defeat device.
End of August, 2015: VW technicians give a full explanation of
causes for discrepancies in NOx emissions to VW's in-house
lawyers as well to U.S. attorneys from Kirkland & Ellis. A
management board member - not identified by VW - realises the
software changes constitute a defeat device prohibited under
Aug. 27, 2016: VW Group of America's legal team sent a text of a
litigation hold notice to "Attorney A" in VW's Wolfsburg office
that would require recipients to preserve and retain records in
their control. "Attorney A indicated to his staff on August 31
that the hold would be sent out at VW AG on September 1 ...
Attorney A indicated that a hold was imminent, and that these
engineers should check their documents, which multiple
participants understood to mean that they should delete
documents prior to the hold being issued," according to the
Justice Department settlement. "Within VW AG and Audi AG,
thousands of documents were deleted by approximately 40 VW AG
and Audi AG employees."
Sept. 3, 2015: VW formally communicates information about the
defeat device to CARB and the U.S. Environmental Protection
Agency (EPA) during a meeting. Winterkorn is informed in a note,
dated Sept. 4.
Sept. 18, 2015: The EPA issues a public notice of violation of
the Clean Air Act to VW, alleging that model year 2009-2015 VW
and Audi diesel cars with 2.0 litre engine included defeat
devices. The disclosure by U.S. regulators comes as a surprise
to VW which had hoped to resolve the case "amicably" with U.S.
authorities without having to make a disclosure. VW admits to 11
million vehicles affected worldwide.
Sept. 23, 2015: Winterkorn resigns, saying his departure cleared
the way for a "fresh start."
Sept. 25, 2015: VW appoints Matthias Mueller, head of its
Porsche unit, as new chief executive.
Oct. 14, 2015: Winfried Vahland, a company veteran designated to
head up operations in the United States from Nov. 1, 2015
onwards, unexpectedly quits.
Jan. 4, 2016: The U.S. Justice Department files a civil suit
against VW seeking up to $46 billion for Clean Air Act
March 29, 2016: The U.S. Federal Trade Commission files a
lawsuit against VW for false advertising over claims that diesel
vehicles were environmentally friendly, saying U.S. consumers
suffered "billions of dollars in injury."
April 22, 2016: VW posts a 4.1 billion euros operating loss for
2015, thanks a 16.2 billion euros hit to pay for the emissions
Oct. 25, 2016: U.S. District Judge Charles Breyer in San
Francisco signs off on a settlement with federal and California
regulators. VW agrees to spend up to $10.03 billion on vehicle
buybacks and owner compensation and $4.7 billion on programmes
to offset excess emissions and boost clean-vehicle projects.
Nov. 22, 2016: VW says it will stop selling diesel vehicles in
the United States.
Dec. 22, 2016: U.S. District Judge Breyer says an agreement in
principle has been reached to provide "substantial compensation"
to owners of about 80,000 3.0 litre diesel vehicles.
Jan. 4, 2017: VW says CEO Mueller will skip the Detroit auto
Jan. 10, 2017: VW says it is in advanced talks with the U.S.
Department of Justice and U.S. Customs and Border protection to
reach a $4.3 billion settlement of criminal investigations and
legal fines in connection with the emissions cheating.
Jan. 11, 2017: VW's supervisory board meets to discuss U.S.
Jan. 11, 2017: Announcing the settlement with the U.S. Justice
Department, U.S. attorney general Loretta E. Lynch says at a
press conference in Washington: "This announcement does not mean
that our investigation is complete ... We will continue to
pursue the individuals responsible for orchestrating this
(Reporting by Edward Taylor; Editing by Mark Potter)