Economy, Regs, & Taxes

VW Evades Unconstitutional Rules

Carmaker deceived regulators, lied to consumers and robbed taxpayers.

Allyne Caan · Sep. 24, 2015

Herbie the Love Bug may have made Volkswagens the cuddly car next door, but the infatuation may soon be fading. In a plot fit for film, stunning news broke that since 2009 VW has been installing software in its “clean diesel” cars to dupe environmental regulators by turning on pollution control features only when the cars are undergoing emissions testing.

The craftily designed software — or “defeat device” — detects certain patterns of steering and pedal movement, and when the patterns suggest testing is in progress, the controls kick in. Once the cars hit the open road again, it’s bye-bye controls and hello pollutants hitting the air at a rate of up to 40 times the regulatory-approved limit.

Who ever said computer programming was boring?

At issue is the tradeoff between mileage efficiency and “clean” emissions. Without a doubt, diesel-powered engines deliver more mileage bang for the buck than gasoline-powered engines, traveling up to 30% farther per gallon. But diesel engines also deliver a rather significant dose of nitrogen oxides (NOx), which in turn smog up the atmosphere and make breathing a health hazard.

Ergo, while diesel-powered cars are popular in Europe, courtesy of more lax emissions regulations, stricter regulations in the U.S. mean gasoline engines rule the American road.

In recent years, however, VW began advertising “clean diesel” cars (courtesy of the secret defeat devices), which boasted diesel-performance alongside environmental friendliness. And consumers and regulators alike bought the advertising. More than 482,000 “clean diesel” cars have been sold in the U.S. since 2008. Meanwhile, the federal government doled out as much as $51 million in taxpayer-funded “green” subsidies for those vehicles.

The problem is false advertising. Regulators were deceived, consumers were lied to and taxpayers were robbed.

The ruse was uncovered only when the International Council on Clean Transportation conducted a research project in collaboration with West Virginia University, examining “real-world operating emissions” from certain diesel cars. When the “real world” didn’t mirror the lab, researchers knew something was up.

The EPA took notice, and Volkswagen has now admitted to the elaborate scam, sending its stocks tumbling. Wednesday, VW Chief Executive Martin Winterkorn resigned, noting in a statement, “I was shocked by the events of the past few days. … I am stunned that misconduct on such a scale was possible in the Volkswagen Group.”

What’s next? Well, VW will need to recall all defeat-device vehicles and make honest cars out of them. Then there will be the inevitable lawsuits over consumer fraud and “diminished value,” as resale prices are likely to drop for cars that don’t perform as well after being “fixed.”

But it doesn’t end there. The EPA has launched an investigation in coordination with the Justice Department, and the potential fines against VW could be astronomical. Under the Clean Air Act, VW could be penalized up to $37,500 per noncompliant vehicle. Multiply that by 482,000, and the impact could soar to $18 billion.

By comparison, last week General Motors agreed to pay $900 million for faulty ignition switches linked to more than 120 deaths. And last year, Toyota paid $1.2 billion for an acceleration defect that killed five people.

Apparently, violating environmental regulations carries a much heftier penalty.

Not surprisingly, some are already saying the answer to VW’s blatant law-breaking is more government. The smoke-obscured truth, however, is that onerous regulations set the stage for this. In the early 1970s, the newly created EPA set its sights on restricting automobile emissions as a way to reduce pollution. Automakers had to re-engineer vehicles to meet stringent guidelines from federal bureaucrats, so it’s unsurprising that the late 1970s aren’t exactly remembered fondly among car enthusiasts. Indeed, people died as a result of those regulations necessitating design changes, all while costs skyrocketed.

Fast forward to today and Barack Obama’s EPA has been more zealous than any before it at enacting mileage and emissions standards — ostensibly to fight the menace of global warming, but in reality to exert Big Government control over every sector of the economy.

But where in the Constitution is the government authorized to regulate your tailpipe? Or your toilet? Or your light bulbs?

Nearly everyone wants the most efficient and best engineered cars available (and toilets and light bulbs, too), but few seem to be aware that the game is no longer a constitutional one. Instead, unelected bureaucrats set the rules for engineers. We are in no way excusing VW, but are we surprised when some engineers decide to evade those rules?

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