The Great Volkswagen Cover-up, with Scott Benjamin

For decades one the world's largest auto manufacturers lied to governments and the public, polluting the planet and evading the same environmental standards they themselves publicly championed. Of course, this is unfortunately a common occurrence in the murky world of corporate power, but here's one big difference: Volkswagen actually got caught. So what happened? Who perpetrated this vast, real-life conspiracy, and how were they caught? Join Ben and his returning special guest, CarStuff's Scott Benjamin, as they explore the strange, twisting tale of Volkswagen's attempt to swindle the public, exposing a genuine conspiracy and asking, perhaps most importantly: What happens next?

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Episode Transcript

Speaker 1 (00:00):
From UFOs to psychic powers and government conspiracies. History is
riddled with unexplained events. You can turn back now or
learn the stuff they don't want you to know. M

(00:24):
Welcome to the show, Ladies and Gentlemen. They called me Ben.
We're joined with our long suffering super producer Paul Decant.
Most importantly, you are you, and that makes this stuff
they don't want you to know. But then you may
be asking where are your trustee co host Matt Frederick
and Noel Brown. Without divulging too much information, I can

(00:45):
reveal that they are both on separate secret missions for
the time being, but they will return very soon. And
I wonder now whether they are traveling by plane, train
or automn bial specifically of old Swagen. You see, today's
episode is about not a conspiracy theory, but an ongoing conspiracy,

(01:09):
a cover up of global nature right, not just one
single incidents, not one single year, but a cover up
spanning multiple industries, multiple countries, and multiple years. And what
better way to investigate this conspiracy than to call on

(01:30):
some help from our longtime friend and recurring guests on
the show, Ladies and Gentlemen, How Stuff Works? Expert for
all things automotive, Scott, Benjamin, how do you do, Ben?
How do you do? It's good to be back in
front of the mic. Yeah yeah. Um. For some background here, everyone, Scott,
you and I for around a decade, a little bit

(01:52):
short of a decade, hosted a very different show together
called Car Stuff. Yeah, that's right. We had a long,
long run, and so we've got an incredible archive and
one of those topics that we talked about, of course
during that, you know, is nine plus years, a little
bit over nine years. One of those topics was Volkswagen.
You know, somewhere along the way we I don't think
we ever covered a full history of Volkswagen, but we

(02:15):
did cover the Volkswagen Beatle, We covered the Volkswagen one
Leader car, you know, some of that stuff. And I
know Volkswagen came up many times in the in the podcast.
In fact, I own a Volkswagen. That's true. I currently
own a Volkswagen, not an affected Volkswagen, which is lucky, right, yes,
very fortunate. And uh think you know what I owe
you another thanks for coming on this show, because I

(02:37):
completely forgot when we when we said, you know, Scott
should be our guest for today's episode, we completely forgot
that you do, in fact drive a Volkswagen. Yeah. Well again,
thankfully not one of the one of the ones that
had to be recalled. But this is an incredible story,
one that unfolded in front of the media, in front
of the world really. Um and uh, there's no doubt
about it. I mean there was a cover up, we'll

(02:59):
talk about that for sure, and it did span many,
many years, and there was, uh, there was inside knowledge
of this early on. You know it was it was
known to the company before it was released to the public.
I mean they were definitely trying to hide something, absolutely,
And so for anyone listening to the show who is
not uh specifically a gear head or doesn't consider themselves

(03:23):
a car person, I can guarantee that you're going to
find some very strange and fascinating things. Nonetheless, and the
story begins, I would say, the story really begins in
the late nineteen thirties, is that correct? And I are
you talking about the beginning of Volkswagen. Yeah, yeah, sure,
we can talk about the beginning of Volkswagen. Well, we'll

(03:44):
just kind of quickly go over this. But one of
the most fascinating things if you look up Volkswagen. And
I bet a lot of people don't quite understand this.
They might know the time between um Adolf Hitler and
wanting to build what they call the people's car, that
would be the Volkswagen bil the bug. Yeah, he's actually
credited as being one of the founders of Volkswagen if

(04:05):
if you can believe that, I mean the German Labor
Front who was under the control of Adolf Hitler at
the time. So you'll find that Adolf Hitler is listed
as one of the founders of Volkswagen. Interesting fact, I thought.
But I mean it starts in what nineteen thirty seven,
I believe, is when Volkswagen became an official mark, right yeah,
headquartered in Wolfsburg, Germany, and that that's the name Volkswagen

(04:30):
k was just meant the people's car company, right sure, yeah,
yeah yeah. And then you know, the idea was to
create something that the people could afford, that people could drive,
that people could you know, easily get their hands on.
But it was also uh strictly controlled by the government.
As you can imagine. It was something that you know,
the direction was coming down from you know, people that
really didn't have how do I want to put this ben.

(04:50):
It wasn't. It wasn't necessarily um designed in a purely
creative environment. It was somebody was dictating what had to
happen in that car, like this is the way we
want it, this is the way it has to be. Right.
They were building to a list of constraints exactly right. Yeah.
And the funny thing is like the with the Volkswagen
and even the start of the company. I mean, if
you notice the timing, we're talking about seven, this is

(05:12):
the onset of World War two, and so there is
going to be a delay in production until after that.
So the very few Volkswagen Beatles, even though they were
designed ahead of time, you know, ahead of ahead of
World War two, Uh, they were not really widely delivered
until after World War two because there's the gap, that
gap in production because they shifted over to become a

(05:34):
war machine, which happened with multiple manufacturers, not just on
the Axis side, but on the Allies side as wetly
both sides of the ocean. Yeah, that was happening everywhere.
Is that, you know, car production pretty much halted during
World War two. And shameless plug we have a pretty
interesting series of episodes about that on car stuff. Show
dot com available for free, huge archive. It's actually we

(05:56):
have a lot of stuff on that. So let's move
a little bit further ahead. You know, you look around
at Volkswagen's today and you see how popular they are.
Right driving any major metropolitan area and you're bound to
see several of different years, differing different models, et cetera.

(06:18):
But you have to ask yourself, all right, this is
this is a Nazi car, right, how did this not
no offense got how did this? How did this Nazi
car become uh so popular here in the United States?
Because initially sales were lower for two fronts, for two

(06:38):
reasons rather one was the association with Germany, and the
second was that the car was seen, I don't want
to say, seem like a twerp, but it was smaller
and it had a differing different form. You know, it
was more rounded, people used to rear engine. You know,
I had a couple of different things going against it.

(06:59):
I guess as far as you know it's it's sale
in America because you know, we at the time, we
were in love with the giant vehicles, you know, the
great big the lead sleds. You know that at the time,
you know, the huge steel vehicles that were enormous. They were,
you know, twenty ft long, had giant v engines. It
was just a different thing altogether, really, and and it
was tough to convince people until about well, you know what,

(07:22):
actually we again we have another podcast about this. But
you know, the the officers that came back from World
War Two had kind of fallen in love with the
British sports cars and you know that the the small
vehicle you know, maybe they only set two people, sometimes four,
but you know it's a very small convertible vehicle sport
e um. And that trend started to take off and

(07:43):
and really become popular in the sixties, I guess is
when you know, they were doing a little bit of both.
They were making some big cars, they were making some
small cars, kind of experimenting with you know, where we're
gonna import cars from because these are popular and um,
you know, the Volkswagon bill kind of fits snuggling in there.
But it wasn't until probably what the early or late
nineteen sixties, early nineteen seventies that the Beatle really really

(08:05):
took off here in the End States and shot off
like a rocket. And the reason was because of the
the oil embargo. Yeah, let's talk a little bit about
that in the geopolitical and the domestic circumstance, right, Uh,
this is at a time where in gas prices are
skyrocketing for the average person. Sure, and a big land

(08:29):
yacht or what you would call lead sled engine is
you know, it's it's gonna be a notoriously thirsty beast. Right.
It's not quite like an Abrams tank. We're not talking
gallons per mile, but you're gonna you're gonna be paying
a lot in fuel. Even when prices are normal, it
was pretty close to gallons per mile. Yeah, yeah, they
were not eco friendly. That wasn't even a term people

(08:53):
would apply at the time. But a smaller car with
a smaller engine like the Bug is going to be, uh,
suddenly much more attractive. And we've seen a similar thing
happened when gas prices spiked several years back and a
bunch of people realized they didn't like their H two's
that much. Remember that, commers, Yeah, I remember that. Yeah,

(09:16):
So this is all happening in the early in eighteen seventies.
I'll say I think it's nineteen seventy three was really
the first crunch for us here and then later in
nineteen seventy nine the same thing happened again. So throughout
the seventies really, uh, there was a push to create smaller,
more efficient vehicles, and and Volkswagen had a vehicle that
was ready made for this, you know, the import of
the vehicle, and it was wild, you know, wildly popular. Um.

(09:38):
In fact, it had a it had a long, long run,
didn't it. I mean it was was it second after
I can't remember? Was it first or second? I think
it was after the Model T. I think I think
it might be second. Let's see, because in nineteen seventy
two they had already surpassed fifteen million vehicles. Wait, so

(09:59):
that would make them first. Yeah, that's right there, that
would make them first because they were produced well into
the nineteen I want to say, nineteen nineties, even in
Mexico I think, and the Model T was what to Yeah,
that's right. Yeah. So this, this is an enormously popular vehicle.
It recovers from a stigma associated with one of its

(10:22):
original founders, Aidolf Hitler. Yeah, that's still the most baffling things. Well,
you know, let's let's move on past that though, because
this isn't just we're talking about a group of UM
manufacturers of marks. Really now at this point it's not
just Volkswagen. So we're talking about Audi, Porsche, Lamborghini, Bentley, Bugatti.
These are all owned under uh, the parent company of Volkswagen.

(10:45):
So in addition to that, there are other automobiles that
we don't necessarily see here in the United States. There's
in Spain, there's the Seat brand which makes automobiles and
auto parts. Their Scania, which is in Sweden that makes
commercial trucks. There is the Man company m A n
which is in Germany and they also make commercial trucks
and engines. And then there's Scota, which is from the
Czech Republic and they make automobiles as well. So Volkswagen

(11:07):
is this enormous worldwide company that produces millions of cars
a year. We might not see as many here in
the United States as as they do elsewhere in the world. Uh,
you know, there's still big numbers. They're they're a popular
company here in the United States. I want to say
they're like the number nine seller of vehicles right right now.
I think I looked up the number yesterday and I
believe their number nine UM in the United States. Um,

(11:29):
and that's a you know, a leap ahead of where
they were, let's say twenty years ago. Twenty years ago,
they were selling you know, just it's probably tens of
thousands still, but now they're selling hundreds of thousands of
Eagles in the United States, if not, you know, over
a million at this point. So um, And again, that
encompasses all their brands. And I know some of the
smaller you know, I should say smaller, but some of

(11:51):
the more boutique type cars. I guess, you know, the
Lamborghini is the Bentleys of Buggatti's they sell less. Of course,
they're they're primary, if you want to call it bread
and butter. I guess we be the Volkswagen brand, Audi brand,
and even I'll say even Porsche, because they saw a
lot of cars here. That's true. Yeah, I would say that. Yeah,
it's strictly speaking in the US, and we're we're establishing

(12:11):
here that this is not a I don't know, I
don't know what we call it. This is not a
cottage industry. This is not like a This is not
a the rarefied air of high performance exotic cars like
this is not McLaren doing something of this nature. So
we have this, we have this massive car manufacturer. Right,

(12:36):
we're talking millions of cars, we're talking billions of dollars.
And then of course we're talking about the law. Right
because just the same way that the original VW Beetle
was built according to a set of constraints, all vehicles
in developed countries must conform to certain sets of stay enterds.

(13:00):
And this includes everything from you know, the the presence
of air bags, to break standards like when you apply
a break to things like collapsible joints, you know, used
in place of an accident. One of the big complaints
you hear from a lot of high performance car enthusiasts

(13:24):
is that these safety regulations primarily add weight in their opinions. Yeah, absolutely,
it's a it's to a lot of people, it's a
lot of nonsense. It to other people, it's a necessity.
You know, you have to have these things in order
to produce and sell a vehicle in the United States
or in the European Union, or in the China market,
or you know, wherever wherever you're talking about. You have

(13:46):
a certain market you have to target for certain things,
you know, and emissions is one of those things. They
have cars that are US Emissions UM compliant and they
have cars that are European Emissions Client compliant rather and
those are two separate things there. It's different systems. And
I'll tell you I found this out as its kind
of fascinated by this when I read this, and I

(14:07):
didn't quite understand this, but someone had described it in
this way. Is that UM, I guess what we're talking
about is different types of exhaust gases that come out
of the tail pipe really and and what comes out
of there. It's it's mandated by the government agencies that
are that are in charge here. So in the United States,
it's the e p A that's in charge of of
UM making sure that you know, the vehicles are compliant

(14:29):
to whether it's you know, the country, the state, or
even the county or the city that we're in, because
it does vary, uh, state by state in that way.
Sometimes it's just the county that you're in, UM. Because
here in Georgia, just because we're in the county that
Atlanta is in, you know, the main city, uh, the
capital city, UM, we are we are required to get

(14:50):
a missions tested every every single year, every uh you know,
once a year around your birthday you have the missions tested.
Then it's when you get your tag renewal and all that.
But if you're outside of that area, they don't care.
There's no emissions testing. Uh. It's different from you know,
by state by states. Some states the entire state isn't
it's necessary. Other states is just certain areas like what
we have here in Georgia. Um. And then some of
them have you know, gear exclusions, like you know, if

(15:12):
your car is older than a certain age, it doesn't
have to be tested. And some of them, you know,
the first four years you don't have to have your
car tested because it's a brand new car. Which all
this seems very arbitrary, I understand, but it's but these
are rules that are um refined state by state, so
that you know, there's one overlaying rule from the government
that says, you know, it's in order to buy or

(15:33):
to import and sell cars here in the United States,
you have to meet these mandates. And the same thing
with European Union, except it's a set of directives that
come down from uh, you know, from their leadership, you know,
more centralized exactly right, Yeah, so they have a more
standardized system for for all of the European Union really,
and of course, like any large manufacturer, Volkswagen has hundreds

(15:56):
and hundreds of people whose soul job in the organization
is to make sure that these cars meet these standards. Yeah,
and just so I'm clear on this, I mean, the
US and the European Union have different air pollution standards.
So just take for example, the U S standards are
kind of strict on nitrogen oxides, which is you'll see

(16:17):
it abbreviated as nl X, and then particulate matter. Well,
the European standards are more strict on carbon dioxide which
is CO two and carbon monoxides. So, in other words,
European regulators are focused on like fuel efficiency and they
try to limit the dependency on crude oil from Russia
and the Middle East well, um, and and on greenhouse
gas emissions of course, you know, and of course climate

(16:38):
change places into all this. But on the other hand,
American regulators are more focused on smog and the health
impacts of the air pollution. So, uh, they have different
standards based on what they're trying to trying to achieve, uh,
you know, for their air quality. I guess, yeah, that
makes sense. That's that's done, a crazy story that all
seems on the up and up. So what happens when

(17:01):
things start to go wrong? Will answer this after a
word from our sponsor. Welcome back. Before the break, Scott,
you and I explain some of the history of Volkswagen,

(17:22):
the size of the organization, a couple of numbers, and uh.
We also looked at their interaction with various governments. I'm
not gonna lean too hard on the on the Nazi history.
It's it's just a real thing and you can fall
down that rabbit hole if you wish, folks, sir, But

(17:45):
you know, we we've we've painted the scene, we've provided
the backdrop. Now I would I know, I'd like to
ask you about the timeline that applies here. When do
things start going wrong with voltzwag? Okay, so we didn't
hear about this until right around right septem a couple

(18:06):
of years ago, maybe almost three years ago at this point,
and h you know, people would probably be surprised to
learn that this actually began if you really want to
get down to the you know, the root cause of
this whole thing. It started around which is crazy. So
what happens? All right? So in they're brand new US
rules now they call them Tier two rules, which I

(18:28):
think they have updated to Tier three at this point.
But we're talking about, um, uh, the the limits decreasing
on what's allowed, you know, for exhaust gas emissions. So
we're talking about nitrogen oxides, things like um, you know,
nitric oxide and nitrogen dioxide, and they're usually produced by
the combustion of fuel. Right, So the limits were decreasing

(18:49):
from um I believe it's one gram per million to
something like point zero seven gram per million. Okay, So yeah,
so it's a significant reduction, it is. Yeah, it's it's
reducing and uh. And because of that, there has to
be kind of a phase in period when they allow, um,
you know, manufacturer to adjust to this to you know,
try to make their cars run a little bit more efficient,
run a little bit more lean, I suppose, right. Um.

(19:12):
The problem with that is, and as we'll find out,
is that you want to kind of have a balance
between performance, of course, because people want performance in their car.
They don't want to be a just an absolute dog
on the road, of course, and you don't want to
have a vehicle that is disputing emissions, you know, because
it takes more fuel probably in most cases to go faster. Right,
You're trying to get the most efficiency out of that fuel,

(19:33):
and sometimes that requires burning more fuel. In fact, all
the time that cars burning more fuel, Right, But you're
trying to do that in a way that you know,
you can filter, you can you know, run it as
lean as possible while still maintaining this balance between performance
and fuel economy. Okay, so that's the that's the idea. Oh,
we should also point out those those nitrogen oxides we're mentioning.

(19:55):
Think of those as some of the key ingredients in
air pollution. So these are the gases that are instrumental
in the formation of stuff like acid rain or small Yeah,
and I'll tell you that this is difficult to do
because they give you know, they give the manufacturers ten
years in order to conform to this. So they've got
ten years from so let's say two thousand nine is

(20:15):
when these new standards are supposed to take place, Right,
they're gonna they're gonna phase them in. So throughout the
two thousand's, you know, to let's say two thousand four
or through about two thousand nine, Um, there's this diesel
emissions change as well it's not just gyasolne it's diesel
as well. So UM. In two thousand seven, Volkswagen officially
suspended the sales of the current diesel lines and they

(20:35):
were waiting for new technology standards come through. They're they're
developing new product, is what they're doing. Really. They also
this is also around the time that the European Union
banned something that was pretty common in this diesel testing thing,
and that was something called a defeat device. Yes, okay,

(20:57):
now the defeat device will come up later, I'm sure,
but the defeat device is nothing that is exclusive two Volkswagon.
I think state that upfront. Uh. That might also be
kind of a shocker to people is that, uh, these
defeat devices are are known to exist for other companies.
In fact, I've seen I think it's Rena, Suzuki, there
were other companies that were mentioned that. UM. I'll be

(21:18):
able to find it here in just a second of
my notes. But um, the defeat devices really are there
to save the car, save the engine, really, UM, that's
the that's the primary purpose of them. It's so that
if you know that the car itself kind of figures
out that something's not going right, you know that it's
not it's not operating in the right temperature range. It's
not you know, there's something a load on the vehicle

(21:38):
that shouldn't be there. It's not going to destroy itself.
It's it's going to in some way save itself. It's
gonna it's gonna try to self preserve, try to at least.
And what we're talking about is is a software situation.
It's not it's not a mechanical thing. It's an electronic thing.
It's going to either increase decreased fuel as necessary. It's
going to you know, it's going to create a condition

(22:00):
and I guess it's more favorable to the engine. And
in two thousand and seven, the European Union finally introduced
a rule for carmakers that said you gotta you gotta
stop using this defeat device loophole because what they were
doing with the software, which as as you said, Scott,

(22:20):
was the designed to preserve an engine, what they were
doing instead was using it to cheat on these tests.
It would manipulate emissions and therefore performance right or performance
and therefore emissions depending on whether the car was on
the what what they were called the test stand where
you test the performance and see if it means a

(22:42):
mission standards versus driving actually driving on the road. So
you know, the fancy insider automotive term for this, and
I don't want to get too into jargon is cheating. Yeah,
that's exactly what was going on. I mean. And the
other company that was listed I mentioned, I think Renault
and Suzuki, but Hyndai also was known to have defeat

(23:04):
devices that they've used in the past, and again that's
to prevent engine damage at certain temperatures. So, um, it
makes sense that you know they would have something in
place like that. But again, when you use that, when
you switch that on, that's that's the deceptive part here.
So let's go back to two thousand seven. So so
again defeat devices not exclusive to Vokeswagon. A lot of

(23:24):
places are using a lot of people are using them.
Manufacturers I mean by people of course, not people. Um,
so it's nothing mechanical really, just all electronic. So back
in two thousand seven, I guess they were there was
talk of Volkswagen using this to kind of skew the
numbers a little bit, you know, And and bosh, I
guess who is a um an Engineering and Electronics company

(23:45):
and Stutgard Germany. A lot of people have heard of BOSH,
I'm sure. Uh, they're a supplier of automotive components. They
allegedly warned Volkswagen not to use their software Blosh software illegally,
so you know, they had they knew they had control,
they could manipulate the software how they wanted, but they said,
in two thousand seven, please don't, you know, do that
in order to conform to these new standards. There's a

(24:07):
better way around this, you know, do it in a
different manner. So in two thousand and eight, just a
year later, volks by and announces that it has clean
diesel cars. And I think we've probably all heard clean diesel.
And this is right around when a lot of people
really changed their mind about diesel in the United States.
It wasn't something that was known as a as a
dirty vehicle, polluting vehicle because prior to then, you know,

(24:28):
when you think of diesel cars, you think of cars that,
you know, trucks, cars that were terribly smokey and they
just smell bad all the time, and they were just
everything about them was different. I mean, they operate differently internally. Uh,
they're tougher, to start to accelerate. Yeah, it's just not
It wasn't something that was part of American culture. I guess,

(24:50):
if you want to put it that way, there's certain
there's certain uses for diesel vehicles, but it was primarily commercial, right.
It was primarily people that you know, long long haul
truckers and you know people that were using d equipment
around um, I don't know, tree nurseries or something like that.
You know, they were using an equipment, not necessarily, and
they're on the road, on the road cars even though
they were out there, they were kind of few and
far between at that point. But now in two thousand eight,

(25:13):
Volkswagon's got this clean diesel and I remember that, you know,
Mercedes came out with clean diesel, and a lot of
places like to claim that they have clean diesel cars.
And of course you're not gonna have any problem with emissions, right,
none at all, and you're gonna have all the performance
that you want. Things are going to be even better
than you could have. Matched gonna drive just like a
gasoline powered car, absolutely no problems at all. So it

(25:35):
could go wrong, alright, So the problem here is that
around two thousand eight, cars with what we'll call the
test rigging software. We're starting to be sold in the
United Kingdom, and they know that, they know that in
two thousand and eight, they were still using this defeat
device in order to kind of get around the emissions
controls uh that we're happening over in the European Union.

(25:55):
And in two thousand nine, uh, this is when the
Volkswagen t d I cars actually went on sale in
the United States. Now in Europe, some of the models
are also being described as UM euro emissions Class five vehicles,
and you know, they have all these classes that they
like to say that we're compliant to, you know, and
that will change throughout the years. I don't know if
we want to keep up with that in this discussion really,
because I think it just kind of gets lost in

(26:16):
the weeds somewhere. But um, around two thousand nine is
when they these t d I cars, you know, the
cars that all they all that little badge t d I.
Those are the ones that are considered to be clean
diesel cars were sold here in the United States. Um.
And then I guess you know from around what I guess,
from two thousand nine right when they were introduced until
about two thousand, fifteen, that's the key day right to
two thifteen. Uh, it seemed like there was really a

(26:40):
big movement. A lot of people really like their diesel cars.
They didn't have a problem finding the gas a gas
stations because you know, more stations were carrying it. Now
because there's this influx of cars that that need to
require diesel fuel, you can't fill it up with gasoline
of course, so there's that, you know, it's it's just
an easier vehicle to uh, to be able to fuel
than was. You know, like back when you had to
go to a truck stop somewhere on the highway in

(27:02):
order to get fuel. Um, Now you could go to
practically any gas station and fuel up and you were
getting the performance that you wanted out of it. It
was just like your gasoline powered car. Um, they're brand new,
you know. There there's something that at the time was um,
you know economical, I guess um you know there there
were fuel efficient you had it all really until it's

(27:23):
a long pause. Yeah, yeah, it's a little dramatic there.
Uh until um people started comparing notes and we'll get
to that after a word from our sponsor. Here's where

(27:44):
it gets crazy. So, as we said at the beginning
of the show, fifteen is sort of a harbinger of
things to come. Right, So here's here's what's happening during
this time and the years leading up to this moment.
As as we said earlier, different different states, different countries,

(28:08):
different counties within states, all have differing standards, right, and
largely a lot of the testing is going to be
the same. It's just where they set the bar for
passing or failing and what they're testing for. Right. So

(28:29):
here in the United States, one of the one of
the states with more stringent standards would be California. The
automotive world, California is very well known for having emission
standards and pollution standards that are significantly higher in other states.
They have a group called CARB which is the California

(28:51):
Air Resource Board. And how many times in the past
it just remember back a couple of decades, if you will,
think about like watching cars be given away on the
prices right, or you know one of the one of
the game shows, how many times did you see them
say when they're giving away a car, they would say
that it's CARBS certified or it has California Missions California

(29:11):
missions was a thing, and I don't know, I think
it kind of still is, but that includes more states
at this point. Now there are other states that have
matched what California has done. So at the time it
was just them, but they had much stricter restrictions on
Is that that went stricter restrictions? I guess, yeah, that's fine.
I guess they they were. They were very specific in
saying that, you know, it's it's definitely got California missions,

(29:32):
it's California Air Resource Board UM authenticated. You know that
this is one that that complies to that absolutely. And
at the time, that meant that you could drive this
car anywhere. Yeah, sure you could. If you could drive
it through California, you know what I mean, you're good
to go anywhere. You could take a car out of there.
But if you were to move into California with another vehicle,

(29:53):
I have to have it tested. You would likely have
to add a bunch of hardware in order to make
your car, uh, you know, as clean as the cars
that were are meant to be sold in California. Yeah,
you know. And at some points during that time, people
moving to California would just sell their car. Yeah, yeah,
it happened. And you know, and now there are many
other states that have kind of followed suit with California

(30:13):
in their same strict well again strict restrictions on on
exhaust gases. So in two thousand fourteen, the year before
the s hits the f if we're going to keep
it as a family show, right, uh, the year before
the Badgers pop out of the bag carved, the California
Air Resource Board is studying discrepancies that they've found between

(30:39):
European and US models of vehicles. Right, and they take
three different sources, uh, for fifteen vehicles, and they find something.
They find something not quite rotten in the state of Denmarket,
but you know, they find something smelling all little ripe

(31:00):
because several scientists I believe went in West Virginia said, hey,
there's something up with the diesel cars. Yeah, because we
had three that we tested, and what they're showing us
on the road is vastly different. They're much much dirtier

(31:20):
than the test would indicate or than the auto manufacturers
have promised. So what's really unusual about this is that
you could take those same three vehicles that you're talking about,
you know, it just brandom vehicles that they selected and
put them into a test bay and measure the emissions
and everything will turn out fine. They will certify as
you know, no, no problem, all it's it's an emissions compliant.
You take that same vehicle and you attach mobile UH

(31:44):
technology to it. I guess you know something that is
a that that can test the vehicle while it's on
the road, while it's driving. And they were finding that
these cars were emitting sometimes forty times the amount of
permitted levels of nitrogen oxides f D times forty times
times the amount. So what is happening during these during
these testing procedures. Is it? Is it an accident? Is

(32:05):
it somehow just these individual cars? Right? Did something fail
on these cars? That's the first question. Is there a defect? Yeah? Sure,
And you might be scratching your head like why would
they go to West Virginia to check this out? They
went to West Virginia University where they have something called
the Center for Alternative Fuels, Engines and Emissions. So they
have something that's called confusingly enough cafe, which is with

(32:27):
an exit with an extra E, not cafe standards, but
with an extra E cafe and Cafe standards, just by
way of reference, are a set of regulations that all
that cars have to obey in the United States. Yeah,
this goes back to what we're talking about in when
they've got ten years to comply to this, you know, uh,

(32:47):
an overall fuel economy for your fleet of vehicles. UM.
More on that on car stuff if you want to
go to shameless plug. But um so, the idea was
they were actually trying to do something not here. I
guess they were trying to figure out, you know, some
of the benefits I guess of US diesel technology and
hoping to have Europe kind of follow along with that

(33:08):
and and and see if they could achieve the same
low levels of um nitrogen oxides for emissions. And instead
they found something different. They found these discrepancies I guess
between uh, you know, the on road emissions versus what
was being published as you know, the fuel standards of
the emission standards I guess for diesel engines here in

(33:29):
the United States. Just the numbers weren't matching up for
the West Virginia University researchers in any shape fashion or four. No, no, no, no, no,
exactly right. So they did publish this. They published their findings,
and the thing is the publication. You know. They didn't
want to say anything to Volkswagen directly, of course, because
you don't you don't talk about that kind of thing.
I guess you don't accuse them of what they thought

(33:51):
was happening, even this early on, right, it could still
be a mistake. So they did publish these publicly, you know,
they said that, you know, here's here's you know what
we found. And this got the attention of the e
p A here in the United States and unwanted attention.
Unwanted attention. Yes, the United States Environmental Protection Agency. In September,

(34:13):
they issue a notice of violation of what's called the
Clean Air Act to Volkswagen, to the Volkswagen Group, and
they're the ones who levy the first accusation. They say, Voldswagen,
you have intentionally programmed diesel engines to cheat on these tests,
to activate emission controls during lab tests, that which which

(34:38):
affects the output of the oxides that Scott you and
I mentioned earlier to meet these testing standards. Just while
they're in the bay. They're giving them a chance, though,
they're saying, here's what we found. What's your explanation for
why it's happening, you know, tell us what happened? Is
is it a mistake? Is this Is this a genuine
mistake because this is not the you know, the real

(35:00):
world situation that we're finding with your vehicles. You know,
in a in a test situation, it's one thing. In
the real world, it's something completely different. Tell us what's
happening here. You know, we want to talk to the
engineers that that helped work on this. Oh boy, yeah,
that's uh, that's someone you don't want to have knocking
on your door as the E p A when you
are in charge of you know, the diesel engine program.

(35:20):
We'll talk about some of the people that were involved
in this later. I mean, there's a few people that
wind up in the fall out of this whole thing.
But um, so the timing of this is is interesting
because you would think that Volkswagen, now they denied this
right up to the very end. I mean, it really
did put it off, and you would think they would
just say, hey, you caught us, you know, like I mean,

(35:43):
I don't know, my bad situation, I don't you know
what I don't know? I mean, which one would have
been better, because here's what happened. They the e PA
gave them a chance. They said, we're telling you right
now that these cars are not CARB not e p
A uh certified. They're they're not satisfying our standards, So
why don't you tell us what you're going to do
to check change this? So for a year, right, for

(36:05):
a year, they say, technical glitches, technical difficulties, we're working
on it, right. And the CEO at the time was
a fellow named Martin winter Corn. And they kept this
line up, They doubled down, they committed to the bit
as you would say in comedy, and they did a
They did their best impression of a company that wasn't

(36:27):
committing crimes. Yeah. So in September again we're still in
September of the e p A threatened to not certify
any of the diesel engines that Volkswagen was going to sell.
So they said, um, you know, what are you gonna do.
I mean, we're not going to we're gonna allow you
to sell these cars the United States. You're gonna lose
out on hundreds of thousands of sales. Volkswagen finally responds

(36:50):
to the e p A not to the public, but
to the e p A by admitting that the software
was programmed to cheat testing. Now, this is September three,
by September eighteen now, so that's fifteen days later, So
they had more than two weeks for Volkswagen to come
out with a statement, you know whatever, they whatever they
wanted to say, and to kind of you know, gloss
this thing over. They didn't do it. The e p

(37:12):
A actually comes out the there's a public service announcement
from the e p A that orders the recall of
all two thousand nine through two thousand fifteen cars that
are equipped with this this t d I engine here
in the United States. And it wasn't until the twenty September,
so two days after the ep announces this that Volkswagen
finally admits this deception and issues a public apology. So

(37:35):
they were giving practically a month. We're talking about practically
of a month where Volkswagen could have come out on
the early side of this. I think they were kind
of calling the e p AS bluff. I think almost like,
you know, are they gonna say anything? Are they not
going to do it? I'm sure that they were telling
them that they were going to um I don't know,
it's just a confusing time. Right around September of so

(37:56):
Well'kswagen CEO Martin winter corn As I personally am deeply
sorry that we've broken the trust of our customers and
the public. And he was in charge from two thousand
eight to ten, when I believe he resigned, so throughout
the whole thing. Really yeah, yeah, it was his ship
well production, I guess throughout the production of Hole. He
called it the terrible mistakes of a few people. Right,

(38:20):
oh boy, right right? Okay, yeah, but you know what, Okay,
So this is another big question is is who knew?
You know, how far up the chain did they notify
somebody that this is happening? Did he really know? Did
he not know? Uh? You know, that's that's another thing,
is that it was a secret that was kept from him.
You're like, hey, Winter corn we've got some some fantastic news.
Our our t d I diesels are are diesel engines

(38:42):
rather our certified the United States, and we got all
the performance we wanted to and we got the mileage
that we wanted And did he just clap twice and
say great job, guys, that's lunch. Yeah, exactly. You don't
think he had any questions, and he followed up questions
about you know, how that was possible and you know,
some of the struggles that they had had in the past. So, UM,
I don't know. I I I feel like he did
know something. I mean, I really, I genuinely do. But

(39:03):
three days later, okay, so we should say that stock
went down immediately the next day. Third, yeah, he's way
down the very next business day, and Volkswagen was was
said that they were gonna they were gonna spend I
think it was like seven and a half billion dollars.
I think, uh, to cover the costs of the scandal, like,

(39:24):
you know, for the recall. I guess because at this
point we're really just talking about a recall. It's nothing more.
Um I shouldn't say nothing more like I'm downplaying it.
But it's it's huge. This is a great, big recall.
Um winter Corn resigns, he's remember CEO. He resigns just
three days after the announcement is made to the public,
and so on September he's out and someone brand new

(39:46):
is in. And Volkswagen then just a week later announced
that they were going to refit up to eleven million
vehicles that were affected by these emissions. Uh you know,
the uh, the defeat devices, I guess. But but they're
still doing damage control. We have to interject because their
new CEO is a guy named Matthias Mattheias Mueller, and

(40:07):
he says, Okay, hold on, guys, the software was only
activated in a part of those eleven million cars, So
it's Max's damage control. But you can't blame people, of course,
that's what they would do. But now other countries are involved, right, sure,
this this has expanded beyond the United States, beyond you know, Germany,

(40:30):
and it's become known as diesel Gait. And one of
the strangest things about this story, Scott, is that it
continues to unfold. So by the time our episode comes out,
there will almost certainly be new developments in the mix. Yeah, yeah,

(40:52):
you know, it's not just the not just the vehicles
that we we've talked about. I mean, there were two
Leader vehicles, there were three Leader vehicles. It encompassed Volkswagen,
it encompassed Autie. Portia was involved. They have a diesel
engine as well um in the in their Cayen model,
so it encompasses a lot of different parts of the
company itself. You know, it's not just the one mark,
it's not just Volkswagen. It's it's at least three other companies,

(41:16):
um that are being um forced I guess as yeah,
actually forced because they're not gonna do this voluntarily really,
I mean, but they're being forced to to make good
on this. And there's a couple of programs as they
set up in you know, in order to make things right.
So Volkswagon set up what they call the Volkswagen t
d I Goodwill package, and um, you know, there were
a lot of back and forth emails between dealerships and

(41:38):
and owners I'm sure, and messages, but essentially, um, you
can even go online. You can check your balance, you know,
you under your VN number, you see if your vehicles
affected that type of thing. You know, you search to
make sure yours is one of these, and then you
can check like your they give you a loyalty card.
I think it is one of the things that they do,
uh that they one that is h you know, has

(41:59):
cash on it, another one is good only at the dealership,
and then I think another one was a there's like
a buyback program where you can trade in your vehicle
you can terminate your lease. And you know, there's a
lot of different variances between UM. You know what happens
based on what vehicle you have and what they allow.
And that's a terrible way to describe that. I'm sorry.

(42:19):
If you go onto the site I think it's called UM.
I think it's called VW Diesel info dot com, even
if you don't have one of these, you can kind
of find out what was made available to the owners
there right right. And if you do happen to have
a Volkswagen, it is well worth your time to check
if you have it yet, to see whether your vehicle
was affected by this scandal, by this diesel gate and

(42:42):
here on stuff they don't want you to know. One
of the things so we often run into is corporate malfeasance, right,
That's what this is. And the questions that we always
return to our sadly the same, and the primary question
is always going to be what happens to those responsible?
Are there any consequences for these actions? And to the

(43:08):
average consumer, regardless of which country they reside in. It
often seems that the so called uh, the fat cats,
are the titans of industry rarely have to face the music. Yeah,
they're not held accountable. They're not held accountable yet in
this case. As legal proceedings continue, we can we can

(43:33):
tell you that in several instances, people have been personally
convicted or punished for this. Very recently, very recently, Yes, Scott,
in December of someone actually went to prison. Sure, not
just someone, uh, six people, Yeah, and in fact one

(43:54):
was here from the United States, um, Oliver Schmidt. He
was arrested in Florida and that was very recently, that
was in December. And then there were six other I'm sorry,
five others I believe. So we're talking about six top
executives that have gone to jail or prison. This is
pretty unusual at this corporation. You know, they've been charged.

(44:15):
I'm not sure that they've actually been sentenced at this point,
but they've been charged. So folks bun employees that were charged. Uh,
there's Heinz Jacob Nooser, who was he al saw the
development of the company's brand. There was YenS Hadler I
believe that's YenS j. E. N s. YenS Hadler, who
over oversaw the engine development program. And there's Richard doren Camp,
who is another supervisor of the engine development, and then

(44:36):
there was Bernard Gottwis who helped oversee the quality management.
And then there's Urgen Peter, who is a liaison between
regulatory agencies and the carmaker themselves. So, uh, these are
top executives. They're they're the top of the game here,
and they're being held accountable for what happened. And h
you know, this is a lot of people say, well, finally, finally,
you know, we're reading some justice out of this, because,

(44:57):
as you said, a lot of times something like this happened,
and you don't hear of anybody really um taking taking um,
I guess taking responsibility for this. They're not taking charge
of the situation saying yeah that was my decision. Let
me let me clarify the timeline here, because I said
December of seventeen seventeen, that is when m. Schmidt is sentenced,

(45:23):
So these charges are probably a little bit earlier, probably
months earlier. Yeah, he was originally looking at a hundred
and sixty nine years in prison Scott on eleven felony counts.
So they don't take this lightly, do they. I mean,
this is something very serious and and I don't know
if we've even said this number yet. But you know,
we've talked, we're thrown around a few numbers of what

(45:43):
this is going to cost VW right in the end.
And you know, they were talking early on about per
vehicle charges and I think it was like thirty seven
They could be fine something like this is just here
in the United States. Thirty seven thousand five dollars per
vehicle that they sold in the United States. That's more
than a lot of those vehicles costs to begin with.
Brand So it's a it's a healthy fine. I mean,
it's a very big fine. And they were talking in

(46:05):
the billions of dollars, and you know, every day it
seemed like there was more and more bad news coming up.
In the end, this whole thing, you know, with with
the penalties and everything, Um, they're finding out that this
is going to end up costing the company something like
twenty one billion dollars one billion with a B with
a B, that's right. And you know, I think there's

(46:25):
something like, you know, four point three billion of that
isn't just criminal and civil penalties. But then the rest
of that is in what the company has to do,
you know, either retrofitting the cars, either buying back the
cars giving out these these these courtesy cards. I forget
what I call them loyalty cards. I think, um, it's
really really expensive for them. But more than twenty billion
dollars is what this is going to cost the company.

(46:47):
And more than that, this has cost this company. Uh,
the reputation yea Volkswagen has been if you if you
paid attention to any of the public announcements recently gone
to any of the websites, this has This is something
that has just cut them to the core. They don't
they don't know what to do because they want to
retain the people that they have already that already believed
in them. But a lot of those people won't buy

(47:08):
another Volkswagen. They don't find that they can trust the company.
And and that's something that's really hard is to earn
that respect back again, which is a which is a
crying shame. Uh. Two points. First, on a personal note,
I really like Volkswagens, and I you know, I'm I'm
wondering if now would be the time for me to

(47:30):
grab one, because I bet, I bet I could get
a deal. But the second point is that this this
huge cost that occurs to Volkswagen should mention also hit
the individuals who were tried or convicted. So Schmidt was
facing a hundred sixty nine years in prison eleven felony counts.
For anyone who is confused about why you would hear

(47:55):
an individual sentence to almost a hundred seventy years in prison,
we can offer some clarity. That's usually that's often at
least to make sure the person actually does go to
prison and serves some sort of time, not a hundred
and sixty nine years really, right, We know that they
might not all stick, you know, it's just it's helping

(48:15):
the bar. So he pled guilty and he ended up
getting a prison term of seven years for his guilty. Please,
that's still pretty stiff and four thousand dollar fine. Oh boy, wow? Okay,
well seven years in prison, I mean that's that's not
an easy sentence to uh to to to take, you know,

(48:37):
I mean, if you're you're going from your executive world
to prison, it's you know, it's gotta be tough, right,
It's it's it's tough, and it's a consequence of this action.
And I wonder if the others are going to follow
suit and have similar sentences, right, right, I know that
some other people are getting convicted or have been convicted.

(48:58):
The other five I believe over in Germany, somewhere in Europe.
I'm not sure if it's a in Germany. They might
be in Spain or you know, somewhere else, but uh yeah,
they are likely to see similar, similar charges levit against them,
and there's more fallout. In January of eighteen, it was
revealed that get this gut, Volkswagen was also using primates

(49:21):
using monkeys in vehicle emissions experiments. With the stringent testing
laws that a lot of countries have, this is, if
not illegal, it's a very bad look. So oh yeah,
this is this is not looking good on the face
of it at all. They did this in they had

(49:42):
four hour long experiments where they locked Java monkeys, ten
Java monkeys in these tiny rooms, filled them with emissions
to see, you know, like, well would happen. That's awful,
isn't it. I hate to hear about stuff like this,
but but it seems like the bad news just keeps piling.
I'm piling on, like, when when is it all going
to kind of settle? You know, when is it gonna

(50:03):
be over? What's the what's the fallout as we're recording
this today. That is an answer that we can only
hope to find in the future. But for now, we
are going to conclude our examination of the real life
automotive conspiracy, not a conspiracy theory, uh, you know, the

(50:27):
great Volkswagen cover up. And Scott, I want to thank
you very much for coming on the show. Now. There
are a couple of secret projects that you have in
the works which I don't believe we're I'm looking at
Paul here. I don't believe we're at liberty to divulge yet. Now.
I don't think we are not yet, But but I've
got something that's keep me busy for sure when I'm

(50:49):
off Mike. Uh yeah, it's something that's gonna be coming
out hopefully. Uh you know, let's say Midsummer somewhere around there.
But I think your listeners will find it interesting. We
can only tell you that it would really be a
crime not to tune in. Very clever, Hey, I worked
on that earlier. Well, Ben, thanks for having me here today.
I really appreciate. I always love being on the show.

(51:10):
Oh and I hope that you know I did the
topic justice. I know that you know we probably uh
skirted over some issues that people would like to hear
a little bit more about. But that's one of the
fascinating things about the stories that there are so many
twists and turns and angles to look at this, uh,
that you know you'd be doing yourself a disservice not
to deal delve deeper into the story, because what we
can cover in an hour is just scraping the surface. Really,

(51:32):
I mean, we're giving you the high points of it,
but really dig into it and find out what's what's
going on behind the scenes. And it's fascinating. I would
I would also call them the low points, I guess.
So well, thanks again for for letting me be here.
Oh likewise, yeah, the pleasure is ours, sir. And of
course Matt and Noels send their regards on that Wow
you've got you've got a secret Matt Nola on secret missions.

(51:56):
God knows what Paul's up to. He's he's shaking his
head and shrug in here am I am I the
last one without secrets? Maybe I think you've got your
own secrets. I am a pretty sketchy individual. But yes,
thank you Scott, And just as importantly, friends and neighbors,
ladies and gentlemen, thank you for listening. Let us know.
Do you drive a Voldswagen? Have you been affected by this?

(52:20):
Do you think that do you think that the legal
actions taken against this company are appropriate? Do you think
instead their governments making an example of an auto manufacturer?
Is it too harsh or not harsh enough? Right? Exactly
is there, for lack of a better phrase, is there
a goldilocks, you know zone with this punishment? And also

(52:48):
what should this be applied to other companies? You know,
what are what are other examples of um companies that
have committed massive fraud like this? And have you know
and what happened to their leaders at the time? Can
I add one thing to please? Just curiosity with the

(53:10):
emissions thing in general? You know, why why is it
that only in Atlanta, in the state of Georgia we
have to have emissions when the rest of Georgia doesn't
have to that Well, I kind of them because I've
lived in places that you don't have to and then
across the street you do have to, you know, that
type of situation. So you know, I'm just curious, like
what you feel about it on your you know personally,
you know, what do you think about it, like, do

(53:30):
your neighbors have to do it but you don't because
you live across the county line. Yeah, and it's not
as if the air itself stays within a district, No, exactly.
So you know, is it is it too arbitrary? I mean,
should it just be, you know, all encompassing. Should everybody
have to adhere to the same standards or should we
just have none? I mean where would that point us?
I don't know. I'm just fascinated by that whole thing too.

(53:51):
Let us know. You can find the entire stuff they
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