"This was not a corporate decision," VWoA CEO Michael Horn told lawmakers.

During a hearing on Capitol Hill Thursday, Volkswagen of America CEO Michael Horn told lawmakers that the German automaker’s emissions cheating scandal was the work of a handful of rogue employees and not a high-level corporate conspiracy.

His comments drew a skeptical response from members of the House Oversight and Investigations panel looking into the discovery that Volkswagen rigged the software controlling its four-cylinder diesel engines so that they would sharply reduce emissions while being tested. In real world use, however, they were allowed to produce as much as 40 times the U.S. mandate for smog-causing oxides of nitrogen.

The Oversight panel has joined a growing list, including the U.S. Justice Department, the EPA and German federal prosecutors, trying to find out just how high up the command chain at Volkswagen the emissions rigging project was approved or, at least, known about. But some experts suggest the real question is whether VW management simply set the tone that made such subterfuge possible, even necessary.

“This was a couple of software engineers who put this in for whatever reason,” Horn declared during his testimony Thursday, later adding, “This was not a corporate decision. There was no board meeting that approved this.”

NY Cong. Chris Collins believes VW engaged in a "massive cover-up."

But could a handful of “individuals,” in Horn’s words, really have taken the steps necessary to install a so-called “defeat device” into 11 million diesel-powered vehicles, including 482,000 sold over the last seven years in the U.S.? The significance of the subterfuge becomes more apparent when one realizes diesels account for about half of the VW products sold in Europe, and a quarter of those sold in the U.S. – where they would otherwise have been banned for failing to meet emissions standards.

(VW says it will fix diesel emissions problem. Click Here for more on its plan.)

Rep. Chris Collins, a New York Republican, was one of those on the Oversight panel to express his skepticism, countering Horn by saying he believes the scandal is the result of “a massive cover-up at the highest levels that continues to this day.”

In a bid to find out who said what to whom, or in Watergate terms, who knew what and when, German prosecutors on Thursday raided various VW offices. But officials have cautioned it will take time to pull together the facts of the case – as VW itself also has said as it gets its own, internal investigation underway.

Lawmakers aren’t the only ones skeptical of the comments VWoA’s Horn made. But David Cole, a veteran of the auto industry and chairman-emeritus of the Center for Automotive Research, in Ann Arbor, Michigan, said he strongly doubts the cheating was ordered by top Volkswagen management.

“They just don’t do this,” said Cole, adding that senior managers know that if such a situation were to leak out, “the cover-up would be worse than the crime.” That said, Cole suggested that top management might not be entirely innocent. “You have to understand the German culture,” he added. “They’re used to getting what they want.”

That was made clear when Ferdinand Piech, who retired earlier this year as Volkswagen AG Chairman, was first appointed CEO. In 1992, he hosted a small group of reporters, including this correspondent, at VW’s Wolfsburg headquarters, inviting them to look at a prototype of a new sedan that was intended to leapfrog all competitors. After explaining the long list of new features and technical breakthroughs he wanted, Piech was asked what would happen if the engineering team said they couldn’t deliver?

“Then I will tell them they are all fired and I will bring in a new team,” Piech, the grandson of Ferdinand Porsche, founder of both Porsche and Volkswagen, declared forcefully. “And if they tell me they can’t do it, I will fire them, too.”

That management tone has been a clear factor in the way Volkswagen has been run in the intervening decades, even after Piech moved into the chairman’s role, replaced by his hand-picked – and equally driven — successor Martin Winterkorn.

So, while there may have been no direct order from the top, it is likely that the team charged with developing the EA 189 engine knew that failure was not an option. And that was all the more worrisome when it became clear they could not deliver the seemingly impossible blend of good performance, high mileage and low emissions.

A former engineer, Rep. Collins later said in an interview he finds it “inconceivable” that such a complex plan could have planned and executed by a few lone wolves, especially considering the extreme importance of the diesel engine to VW. He believes top managers would have been closely watching the project, and would have demanded to know how the development team pulled things off.

Who knew that the engineers and software programmers directly involved in the diesel project were cheating? That’s likely to take some time to answer. But to CAR’s Cole and many observers, top VW managers set the tone, whether they are legally culpable or not.

(VW planning to cut diesel line-up in U.S. For more, Click Here.)

 

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