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    Detroit Auto Show: Volkswagen CrossBlue Concept



    By William Maley

    Staff Writer - CheersandGears.com

    January 14, 2013

    One automaker you might not expect to get into the three-row crossover arena is Volkswagen. But with the introduction of the CrossBlue concept at the Detroit Auto Show today, Volkswagen might be joining.

    The CrossBlue's design is mixture of Volkswagen Touareg and Audi Q7. The concept measures 196 inches from front to back, which puts it about on par with the Ford Explorer and Nissan Pathfinder. Inside, the CrossBlue has seating for six passengers and a 10.2-inch touch screen infotainment system controls all audio functions.

    Power comes from a plug-in diesel electric hybrid drivetrain. The powertrain pairs a 2.0L turbodiesel four-cylinder engine with two electric motors for a combined output of 305 horsepower and 516 pound-feet of torque, and six-speed dual-clutch gearbox. Volkswagen says the CrossBlue can get 89 MPGe when the battery is fully charged, 39 MPG when the battery is depleted, travel up 14 miles on electric power alone, and reach 60 MPH in 7.2 seconds.

    Source: Volkswagen

    William Maley is a staff writer for Cheers & Gears. He can be reached at william.maley@cheersandgears.comor you can follow him on twitter at @realmudmonster.

    Press Release is on Page 2


    VOLKSWAGEN CROSSBLUE MID-SIZE SUV CONCEPT MAKES GLOBAL DEBUT AT THE NORTH AMERICAN INTERNATIONAL AUTO SHOW

    Six-seater mid-size SUV concept designed specifically for North America

    Innovative diesel-electric plug-in-hybrid powertrain offers manufacturer estimated fuel economy rating of 35 mpg combined, 89 mpge in electric mode

    Concept is built off the Modular Transverse Matrix (MQB) components set

    Range in all-electric mode is up to 14 miles

    306 horsepower; 516 pound-feet of torque; 0 to 60 mph estimated at 7.2 seconds

    Sophisticated, spacious, flexible, and elegant interior space

    Exterior is a marriage of clean, timeless Volkswagen design language with the masculine character of an American SUV

    Wolfsburg/Detroit - The versatile CrossBlue SUV concept that is making its global debut at the North American International Auto Show was developed specifically for the U.S. and Canada. If it goes into production, the CrossBlue would flesh out the Volkswagen SUV lineup with a seven-seat midsize crossover that slots in above the Tiguan and below the premium Touareg.

    The CrossBlue features a highly innovative plug-in hybrid powertrain that mates a TDI® Clean Diesel engine with two electric motors, a DSG® dual-clutch automatic transmission, and an electric all-wheel-drive system that is dubbed "propshaft by wire." Volkswagen's manufacturer estimated fuel economy rating is 89 mpge combined in electric mode and 35 mpg as a hybrid. As well as offering excellent economy for a mid-size crossover SUV, the CrossBlue has impressive performance from a powertrain that produces up to 305 horsepower and 516 pound-feet of torque: 0 to 60 mph is estimated to take just 7.2 seconds.

    The CrossBlue runs in zero emissions mode either at the press of a button or automatically. With a fully charged 9.8kWh lithium-ion battery, the CrossBlue can travel a distance of 14 miles in all-electric mode; to achieve optimal driving range, the top speed is reduced from 127 mph to 75 mph. The overall driving range is 661 miles if the 18.5-gallon fuel tank is filled with ultra-low-sulfur diesel fuel.

    The CrossBlue concept, which boasts six individual seats, combines the visual impact of an SUV with the spaciousness and flexibility of a minivan. With a comfortable highway ride, good all-around visibility, and a full raft of safety features that includes up to 12 airbags, the concept car is a spacious and safe cruiser.

    The CrossBlue was designed in Germany under the leadership of Walter de Silva (Head of Design, Volkswagen Group) and Klaus Bischoff (Head of Design, Volkswagen Brand), in close coordination with Volkswagen of America. The vehicle merges the clean lines of German Volkswagen design DNA with the masculine character of an American SUV. This results in a very realistic vehicle that eschews showcar gaudiness to give a glimpse at a potential new Volkswagen SUV.

    "The CrossBlue concept is exactly the right type of vehicle for the U.S. market," said Jonathan Browning, President and CEO, Volkswagen Group of America. "It combines a truly versatile interior layout with sophisticated Volkswagen design, to give a unique and supremely stylish offering in this segment. Moreover, the vehicle showcases our innovative German powertrain engineering and the bandwidth of the new MQB architecture."

    A Volkswagen Made for America

    Painted in "CrossBlue Glass Flake", the concept is 196.3 inches long, 79.3 inches wide, and 68.2 inches high. It assumes a very confident stance on the road thanks to wide front and rear tracks of 66.4 and 66.8 inches respectively, 21-inch aluminum-alloy wheels shod with 235/45 tires, and significantly flared wheelarches.

    Contrasting with the body color is stainless-steel trim that runs all around the SUV's lower body section. Developed by a team led by Marc Lichte (Senior Designer, Volkswagen Brand), the CrossBlue features a very prominent and long hood that integrates the engine's air intakes, a roofline that is also long, and a very short frontal overhang. The vehicle's silhouette ascends slightly towards the rear, a visual impression that's reinforced by a widening character line that runs from the headlights back to the taillights. Typically for a Volkswagen, there's a precisely styled line above this.

    The CrossBlue is equipped with two "fuel doors"-the filler neck for the diesel tank is on the passenger side, and engineers integrated two electrical sockets behind the door on the driver's side. The first socket is used to charge the lithium-ion battery and the second can be used to connect electrical devices such as coolers or camping lights. In this case, the CrossBlue acts as an auxiliary electrical generator.

    A key element of Volkswagen design DNA is the predominance of horizontal lines at the front and rear of the vehicle. The Volkswagen design team has further developed this in the CrossBlue. The radiator grille trim, consisting of two solid aluminum struts and a centrally positioned VW logo, is now a three-dimensional element that extends into the headlights and defines the entire front end. The upper aluminum strut frames the dual headlights, while the lower strut transitions into a line that extends across the entire front end and visually lengthens the grille. This gives the CrossBlue the appearance of being wider than it actually is.

    The Volkswagen designers attended to even the smallest of details with great care. The air intakes in the bumper are an example. They are trimmed by horizontally mounted, black-painted pieces that are actually three-dimensional honeycomb structures when you examine them closely. Beneath the bumper, the front end is finished by stainless-steel-style trim and integrated underbody protection.

    As at the front end, the designers accentuated the sculpted LED taillights with aluminum elements as well. From a styling perspective, the taillights are designed in the form of an "E" that opens towards the vehicle centerline. In the inner area, the contours of these two "Es" are trimmed in aluminum. The prominent tailpipes have a stainless-steel look and are integrated in a trim panel that features underbody protection.

    Ample Space and Maximum Comfort

    The interior is a key part of any crossover utility vehicle and the CrossBlue's is ultra-stylish, luxurious, and versatile. The team headed by Tomasz Bachorsky (Lead Designer, Volkswagen Brand) equipped the concept car with six individual seats in three rows. In a production version, the second row would have the option of three seats to make it a full seven seater. Although the third row features stadium-style seating, which children will appreciate, headroom is excellent throughout the vehicle: 42.4 inches up front, 40.2 inches in the middle, and 37.6 inches in the rear. Legroom is ample, too, with 37.3 inches in the second row and 36.1 inches in the third row. Convenient access to the rear seats is assured by sliding second-row seats that can be managed with a single hand movement.

    Behind the third seating row is a spacious cargo area. With the third row folded, load length is 48.8 inches, a figure that increases to 83.5 inches with the second row stowed. A fully folding front passenger seat means that objects up to 118 inches long can be accommodated inside the CrossBlue, perfect for the weekend run to the home improvement store.

    The CrossBlue is not only an extremely spacious and comfortable SUV; it is also a very sophisticated one from the point of view of its materials and its precise styling and form language. In the process, the designers and engineers created an interior that will likely set new standards for this class.

    As soon as the driver starts the SUV, the round-shaped controls for the lights, climate control, and the four-wheel-drive system emerge from their flush resting positions. The controls have rugged aluminum surrounds: aluminum is one of the predominant materials in the interior and is used for the air vent surrounds and the array of switches as well as for such features as the steering wheel spokes.

    Leather and wood are also used to finish the interior. Oona Scheepers, Head of Color & Trim, decided to use especially distinctive dark stained banana tree wood accents. The lines of these wood accents "flow" from the sporty gearshift area and ascend the center console and across the lower instrument panel to the door trim, playing a large role in defining the interior space in the front of the vehicle. Above these wood accents and around the two-part center armrest, dark "Marble Gray" leather is used, with light beige "St Tropez" leather, trim pieces, and fabrics used beneath the wood accents and on the seats.

    Contemporary technologies are integrated with these refined materials to make a clear design statement. Positioned centrally on the center console is a 10.2-inch touchscreen that is framed by an aluminum surround and central air vents. The large touchscreen is not only used to control all infotainment functions, but also to access the status of the hybrid system. Another new feature is a 3D display of either the navigation route or the contents of the media center. All the important switches in the passenger compartment-except for the hazard flasher switch-are soft-touch components that have a similar feel to using a touchscreen.

    The instruments are also high-tech. The instrument cluster is designed to be user programmable, offering a wide variety of functions and displays. For example, the CrossBlue can be driven in different powertrain modes: information related to the "Eco" mode is shown with a blue background, while the "Sport" setting is shown in red.

    The on-board entertainment system is as cool as it gets. To ensure that second- and third-row passengers can fully enjoy audio, video, and online entertainment, iPad® mini devices are integrated as monitors in the front-row head restraints. A Fender® Premium Audio System ensures concert-hall-quality sound throughout the vehicle. Second- and third-row occupants also have full control over the climate-control system in their part of the vehicle.

    Drivetrain Combines Efficiency and Fun

    The CrossBlue is based on Volkswagen's new Modular Transverse Matrix (MQB) components set. This vehicle brings together MQB elements that could underpin a future generation of SUVs, such as the front and rear suspensions, the 190-horsepower TDI Clean Diesel engine from the new EA288 family, and a six-speed DSG dual-clutch automatic transmission. These components are combined with electrical parts that are also "made by Volkswagen," such as the lithium-ion battery in the center tunnel and the 54-hp front and 114-hp rear electric motors. The Cross Coupé compact SUV concept-also being shown for the first time in the U.S. in Detroit-uses a similar powertrain concept, showing the extent of the MQB's modularity.

    The CrossBlue is as efficient as it is sporty. As already noted, Volkswagen estimates 89 mpge in electric mode and 35 mpg combined running as a hybrid, as well as a 0 to 60 mph time of 7.2 seconds. Although the combined power output of 305 hp is impressive, the torque characteristics are amazing. The TDI Clean Diesel engine makes 295 lb-ft from just 1750 rpm, while the electric motors produce their torque-133 lb-ft at the front wheels and 199 lb-ft at the rear-immediately. Combined, the system can produce up to 516 lb-ft, a stout number.

    Different Operating Modes: The CrossBlue's default mode is as a classic hybrid. The electric motor is used for propulsive power as often as possible in this situation. The driver can also switch to "Eco" or "Sport" modes by pressing a button to the right of the shift lever. In Eco mode, parameters such as the throttle map and air conditioning are controlled for minimal fuel and electrical consumption. In Sport mode, the drive system's maximum power potential is exploited. Other available modes are: offroad, where all-wheel-drive is permanently engaged; charging; and EV mode, where it drives as an electric vehicle.

    Powered by its lithium-ion battery, the CrossBlue can cover a distance of up to 14 miles as an EV, although top speed is reduced from 127 mph to 75 mph. In E-mode, only the 114-hp rear electric motor propels the vehicle and the TDI engine is shut off and decoupled from the drivetrain. Even at speeds of up to 75 mph, the internal combustion engine is not engaged as long as the battery has sufficient charge. As soon as there is a need for TDI power, it is coupled to the drivetrain again, jolt-free, within fractions of a second.

    The CrossBlue's lithium-ion battery has an energy capacity of 9.8 kWh and is housed in the center tunnel. The power electronics unit integrated in the engine compartment operates at a level of around 370V and manages the flow of high-voltage energy to and from the battery and the electric motors. A DC/DC converter supplies the vehicle's electrical system with the 12-volt power it needs. The battery can be charged either by external power sources or by the TDI engine while the vehicle is in motion.

    The driver can intentionally switch over to a charging mode by pressing another button on the center console. The TDI engine charges the battery while driving in order to store enough electrical energy for EV operation later in the journey-for instance, in an urban area.

    There are also a number of other specific modes that automatically come into play, depending on the circumstances.

    Coasting: As soon as the driver releases the accelerator pedal, the engine and electric motors are decoupled from the drivetrain and the engine is shut off, provided that the battery is sufficiently charged. This is referred to as "coasting." No emissions are generated.

    Battery regeneration: Whenever the driver releases the accelerator pedal or applies the brakes, and the battery is insufficiently charged, the two electric motors act as generators and feed energy recovered from the brakes into the lithium-ion battery. In this case, the TDI engine is also shut off and decoupled from the drivetrain to ensure maximum regeneration.

    Boosting: When very sporty performance is required, the electric motors form an alliance with the TDI engine known as "boosting": in this mode, all four wheels are driven.

    Offroad ("propshaft by wire"): All four wheels are also driven whenever offroad mode is intentionally activated. In this case, however, the front electric motor-which is now supplied with energy by the TDI engine-operates exclusively as a generator and a power source for the electric motor at the rear. Since the energy for driving the rear wheels is electrical rather than mechanical, this is referred to as "propshaft by wire". Because the TDI engine drives the front wheels in off¬road mode, the four-wheel-drive system is still operational even when the battery doesn't have much charge.

    TDI only: When the TDI engine is the sole source for propulsive power, the CrossBlue is a pure front-wheel-drive vehicle. Thanks to the efficient turbocharged, common-rail, direct fuel-injection diesel engine, the concept car is still very fuel-efficient. Based on manufacturer estimates, the CrossBlue would attain 37 mpg highway and 33 mpg city, values that a gasoline-engined SUV would find hard to match.

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    This has grown on me, I am liking it more and more. Will still take a GMC Acadia over this, but it does have some nice features.

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      Following the ICCT study, CARB, in coordination with the EPA, attempted to work with VW to determine the cause for the higher NOx emissions in VW diesel vehicles when being driven on the road as opposed to on the dynamometer undergoing standard emissions test cycles. To do this, CARB, in coordination with the EPA, repeatedly asked VW questions that became increasingly more specific and detailed, and tested the vehicles themselves. In implementing their strategy of disclosing as little as possible, Neusser, Gottweis, Schmidt, Peter and their co-conspirators provided EPA and CARB with testing results, data, presentations and statements in an attempt to make it appear that there were innocent mechanical and technological problems to blame, while secretly knowing that the primary reason for the discrepancy was their cheating software that was installed in every VW diesel vehicle sold in the United States. The co-conspirators continued this back-and-forth with the EPA and CARB for over 18 months, obstructing the regulators’ attempts to uncover the truth.
      The charges in the indictment are merely accusations and each defendant is presumed innocent unless and until proven guilty.
      The case was investigated by the FBI and EPA-CID. The prosecution and corporate investigation are being handled by Securities and Financial Fraud Unit Chief Benjamin D. Singer and Trial Attorneys David Fuhr, Alison Anderson, Christopher Fenton and Gary Winters of the Criminal Division’s Fraud Section; Trial Attorney Jennifer Blackwell of the Environment and Natural Resources Division’s Environmental Crimes Section; and from the U.S. Attorney’s Office for the Eastern District of Michigan, Criminal Division Chief Mark Chutkow and White Collar Crime Unit Chief John K. Neal and Assistant U.S. Attorney Timothy J. Wyse. The Justice Department’s Office of International Affairs also assisted in the case. The Justice Department also extends its thanks to the Office of the Public Prosecutor in Braunschweig, Germany.
      The Civil Resolutions:
      The first civil settlement resolves EPA’s remaining claims against six VW-related entities (including Volkswagen AG, Audi AG and Porsche AG) currently pending in the multidistrict litigation before U.S. District Judge Charles R. Breyer of the Northern District of California. EPA’s complaint alleges that VW violated the Clean Air Act by selling approximately 590,000 cars that the United States alleges are equipped with defeat devices and, during normal operation and use, emit pollution significantly in excess of EPA-compliant levels. VW has agreed to pay $1.45 billion to resolve EPA’s civil penalty claims, as well as the civil penalty claim of CBP described below. The consent decree resolving the Clean Air Act claims also resolves EPA’s remaining claim in the complaint for injunctive relief to prevent future violations by requiring VW to undertake a number of corporate governance reforms and perform in-use testing of its vehicles using a portable emissions measurement system of the same type used to catch VW’s cheating in the first place. Today’s settlement is in addition the historic $14.7 billion settlement that addressed the 2.0 liter cars on the road and associated environmental harm announced in June 2016, and $1 billion settlement that addressed the 3.0 liter cars on the road and associated environmental harm announced in December 2016, which together included nearly $3 billion for environmental mitigation projects.
      A second civil settlement resolves civil fraud claims asserted by U.S. Customs and Border Protection (CBP) against VW entities. VW entities violated criminal and civil customs laws by knowingly submitting to CBP material false statements and omitting material information, over multiple years, with the intent of deceiving or misleading CBP concerning the admissibility of vehicles into the United States. CBP enforces U.S. customs laws as well as numerous laws on behalf of other governmental agencies related to health, safety, and border security. At the time of importation, VW falsely represented to CBP that each of the nearly 590,000 imported vehicles complied with all applicable environmental laws, knowing those representations to be untrue. CBP’s relationship with the importing community is one based on trust, and this resolution demonstrates that CBP will not tolerate abrogation of importer responsibilities and schemes to defraud the revenue of the United States. The $1.45 billion paid under the EPA settlement also resolves CBP’s claims.
      In a third settlement, VW has agreed to pay $50 million in civil penalties for alleged violations of FIRREA. The Justice Department alleged that a VW entity supported the sales and leasing of certain VW vehicles, including the defeat-device vehicles, by offering competitive financing terms by purchasing from dealers certain automobile retail installment contracts (i.e. loans) and leases entered into by customers that purchased or leased certain VW vehicles, as well as dealer floorplan loans. These financing arrangements were primarily collateralized by the vehicles underlying the loan and lease transactions. The department alleged that certain of these loans, leases and floorplan financings were pooled together to create asset-backed securities and that federally insured financial institutions purchased certain notes in these securities. Today’s FIRREA resolution is part of the department’s ongoing efforts to deter wrongdoers from using the financial markets to facilitate their fraud and to ensure the stability of the nation’s financial system.
      Except where based on admissions by VW, the claims resolved by the civil agreements are allegations only.
      The civil settlements were handled by the Environmental and Natural Resources Division’s Environmental Enforcement Section, with assistance from the EPA; the Civil Division’s Commercial Litigation Branch; and CBP.

      View full article
    • By William Maley
      Volkswagen will be cutting another big check. Today, the company announced that it had reached a settlement with Department of Justice over the criminal case on the diesel emission scandal. Volkswagen will plead guilty to three criminal felony charges and will pay $4.3 billion - $2.8 billion for the fine and $1.5 billion to settle civil cases. The settlement also requires an independent monitor to watch over the company for the next years. 
      Volkswagen's board still needs to approve this settlement, but the company says the approval could happen today or tomorrow. If they waited, the parties would have to do it all over again with new people coming as part of President-elect Trump's team.
      “Today’s actions reflect the Justice Department’s steadfast commitment to defending consumers, protecting our environment and our financial system and holding individuals and companies accountable for corporate wrongdoing. In the days ahead, we will continue to examine Volkswagen’s attempts to mislead consumers and deceive the government. And we will continue to pursue the individuals responsible for orchestrating this damaging conspiracy,” said Attorney General Loretta E. Lynch in a statement.
      In addition, six Volkswagen executives and employees have been charged with their involvement in the scandal. They include, 
      Richard Dorenkamp - In charge of Volkswagen’s Engine Development After-Treatment Department from 2003 to 2013. This department is where the cheat was developed. Bernd Gottweis - Volkswagen's supervisor responsible for Quality Management and Product Safety between 2007 to October 2014. Jens Hadler - Head of powertrain development from 2007 to 2011. Heinz-Jakob Neusser - Head of powertrain development from 2011 to 2013, suspended by Volkswagen back in 2015. Jürgen Peter - Worked in Volkswagen's Quality Management and Product Safety Group from 1990 to now. For a few months in 2015, he was a liaison for various regulatory agencies. Oliver Schmidt - Volkswagen's liaison with U.S. environmental regulators. He was arrested on Sunday in Miami as he was returning to Germany. Source: Department of Justice, Bloomberg, Reuters
      Press Release is on Page 2


      Volkswagen AG Agrees to Plead Guilty and Pay $4.3 Billion in Criminal and Civil Penalties; Six Volkswagen Executives and Employees are Indicted in Connection with Conspiracy to Cheat U.S. Emissions Tests
      VW to Pay $2.8 Billion Criminal Fine in Guilty Plea and $1.5 Billion Settlement of Civil Environmental, Customs and Financial Violations; Monitor to Be Appointed to Oversee the Parent Company Volkswagen AG (VW) has agreed to plead guilty to three criminal felony counts and pay a $2.8 billion criminal penalty as a result of the company’s long-running scheme to sell approximately 590,000 diesel vehicles in the U.S. by using a defeat device to cheat on emissions tests mandated by the Environmental Protection Agency (EPA) and the California Air Resources Board (CARB), and lying and obstructing justice to further the scheme, the Justice Department announced today.
      In separate civil resolutions of environmental, customs and financial claims, VW has agreed to pay $1.5 billion. This includes EPA’s claim for civil penalties against VW in connection with VW’s importation and sale of these cars, as well as U.S. Customs and Border Protection (CBP) claims for customs fraud. In addition, the EPA agreement requires injunctive relief to prevent future violations. The agreements also resolve alleged violations of the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA).
      The Criminal Case:
      VW is charged with and has agreed to plead guilty to participating in a conspiracy to defraud the United States and VW’s U.S. customers and to violate the Clean Air Act by lying and misleading the EPA and U.S. customers about whether certain VW, Audi and Porsche branded diesel vehicles complied with U.S. emissions standards, using cheating software to circumvent the U.S. testing process and concealing material facts about its cheating from U.S. regulators. VW is also charged with obstruction of justice for destroying documents related to the scheme, and with a separate crime of importing these cars into the U.S. by means of false statements about the vehicles’ compliance with emissions limits. Under the terms of the plea agreement, which must be accepted by the court, VW will plead guilty to all these crimes, will be on probation for three years, will be under an independent corporate compliance monitor who will oversee the company for at least three years, and agrees to fully cooperate in the Justice Department’s ongoing investigation and prosecution of individuals responsible for these crimes.
      In addition, a federal grand jury in the Eastern District of Michigan returned an indictment today charging six VW executives and employees for their roles in the nearly 10-year conspiracy. Heinz-Jakob Neusser, 56; Jens Hadler, 50; Richard Dorenkamp, 68; Bernd Gottweis, 69; Oliver Schmidt, 48; and Jürgen Peter, 59, all of Germany, are charged with one count of conspiracy to defraud the United States, defraud VW’s U.S. customers and violate the Clean Air Act by making false representations to regulators and the public about the ability of VW’s supposedly “clean diesel” vehicles to comply with U.S. emissions requirements. The indictment also charges Dorenkamp, Neusser, Schmidt and Peter with Clean Air Act violations and charges Neusser, Gottweis, Schmidt and Peter with wire fraud counts. This case has been assigned to U.S. District Judge Sean F. Cox of the Eastern District of Michigan.
      Schmidt was arrested on Jan. 7, 2017, in Miami during a visit to the United States and appeared in federal court there on Monday. The other defendants are believed to presently reside in Germany.
      Today’s announcement was made by Attorney General Loretta E. Lynch, EPA Administrator Gina McCarthy and Assistant Administrator Cynthia Giles, Deputy Attorney General Sally Q. Yates, FBI Deputy Director Andrew McCabe, Acting Deputy Secretary Russell C. Deyo for the Department of Homeland Security, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Assistant Attorney General John C. Cruden of the Justice Department’s Environment and Natural Resources Division and Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division.
      “Volkswagen’s attempts to dodge emissions standards and import falsely certified vehicles into the country represent an egregious violation of our nation’s environmental, consumer protection and financial laws,” said Attorney General Lynch. “Today’s actions reflect the Justice Department’s steadfast commitment to defending consumers, protecting our environment and our financial system and holding individuals and companies accountable for corporate wrongdoing. In the days ahead, we will continue to examine Volkswagen’s attempts to mislead consumers and deceive the government. And we will continue to pursue the individuals responsible for orchestrating this damaging conspiracy.”
      “When Volkswagen broke the law, EPA stepped in to hold them accountable and address the pollution they caused,” said EPA Administrator McCarthy. “EPA’s fundamental and indispensable role becomes all too clear when companies evade laws that protect our health. The American public depends on a strong and active EPA to deliver clean air protections, and that is exactly what we have done.”
      “This wasn’t simply the action of some faceless, multinational corporation,” said Deputy Attorney General Yates. “This conspiracy involved flesh-and-blood individuals who used their positions within Volkswagen to deceive both regulators and consumers. From the start of this investigation, we’ve been committed to ensuring that those responsible for criminal activity are held accountable. We’ve followed the evidence—from the showroom to the boardroom—and it brought us to the people whose indictments we’re announcing today.”
      “Americans expect corporations to operate honestly and provide accurate information,” said Deputy Director McCabe. “Volkswagen’s data deception defrauded the U.S. government, violated the Clean Air Act and eroded consumer trust. This case sends a clear message to corporations, no matter how big or small, that if you lie and disregard rules that protect consumers and the environment, you will be caught and held accountable.”
      “Blatant violations of U.S. customs and environmental laws will not be tolerated, and this case reinforces that,” said Acting Deputy Secretary Deyo. “These actions put our economy, consumers and citizens at risk, and the Department of Homeland Security and U.S. Customs and Border Protection will continue to take every step necessary to protect the American people.”
      According to the indictment, the individuals occupied the following positions within the company:
      Heinz-Jakob Neusser: from July 2013 until September 2015, Neusser worked for VW as head of Development for VW Brand and was also on the management board for VW Brand. From October 2011 until July 2013, Neusser served as the head of Engine Development for VW. Jens Hadler: from May 2007 until March 2011, Hadler worked for VW as head of Engine Development for VW. Richard Dorenkamp: from 2003 until December 2013, Dorenkamp worked for VW as the head of VW’s Engine Development After-Treatment Department in Wolfsburg, Germany. From 2006 until 2013, Dorenkamp led a team of engineers that developed the first diesel engine that was designed to meet the new, tougher emissions standards in the United States. Bernd Gottweis: from 2007 until October 2014, Gottweis worked for VW as a supervisor with responsibility for Quality Management and Product Safety. Oliver Schmidt: from 2012 through February 2015, Schmidt was the General Manager in charge of the Environment and Engineering Office, located in Auburn Hills, Michigan. From February 2015 through September 2015, Schmidt returned to VW headquarters to work directly for Neusser, including on emissions issues. Jürgen Peter: Peter worked in the VW Quality Management and Product Safety Group from 1990 until the present. From March 2015 until July 2015, Peter was one of the VW liaisons between the regulatory agencies and VW. According to the charging documents and statement of facts filed with the court, in 2006, VW engineers began to design a new diesel engine to meet stricter U.S. emissions standards that would take effect by model year 2007. This new engine would be the cornerstone of a new project to sell diesel vehicles in the United States that would be marketed to buyers as “clean diesel,” a project that was an important strategic goal for VW’s management. When the co-conspirators realized that they could not design a diesel engine that would both meet the stricter NOx emissions standards and attract sufficient customer demand in the U.S. market, they decided they would use a software function to cheat standard U.S. emissions tests.
      VW engineers working under Dorenkamp and Hadler designed and implemented a software to recognize whether a vehicle was undergoing standard U.S. emissions testing on a dynamometer or it was being driven on the road under normal driving conditions. The software accomplished this by recognizing the standard published drive cycles. Based on these inputs, if the vehicle’s software detected that it was being tested, the vehicle performed in one mode, which satisfied U.S. NOx emissions standards. If the software detected that the vehicle was not being tested, it operated in a different mode, in which the vehicle’s emissions control systems were reduced substantially, causing the vehicle to emit NOx up to 40 times higher than U.S. standards.
      Disagreements over the direction of the project were articulated at a meeting over which Hadler presided, and which Dorenkamp attended. Hadler authorized Dorenkamp to proceed with the project knowing that only the use of the defeat device software would enable VW diesel vehicles to pass U.S. emissions tests. Starting with the first model year 2009 of VW’s new “clean diesel” engine through model year 2016, Dorenkamp, Neusser, Hadler and their co-conspirators installed, or caused to be installed, the defeat device software into the vehicles imported and sold in the United States. In order to sell their “clean diesel” vehicles in the United States, the co-conspirators lied to the EPA about the existence of their test-cheating software, hiding it from the EPA, CARB, VW customers and the U.S. public. Dorenkamp, Neusser, Hadler, Gottweis, Schmidt, Peter and their co-conspirators then marketed, and caused to be marketed, VW diesel vehicles to the U.S. public as “clean diesel” and environmentally-friendly.
      Around 2012, hardware failures developed in certain of the diesel vehicles. VW engineers believed the increased stress on the exhaust system from being driven in the “dyno mode” could be the cause of the hardware failures. In July 2012, VW engineers met with Neusser and Gottweis to explain what they believed to be the cause of the hardware failures and explained the defeat device. Gottweis and Neusser each encouraged further concealment of the software. In 2014, the co-conspirators perfected their cheating software by starting the vehicle in “street mode,” and, when the defeat device realized the vehicle was being tested, switching to the “dyno mode.” To increase the ability of the vehicle’s software to recognize that it was being tested on the dynamometer, the VW engineers activated a “steering wheel angle recognition feature.” With these alterations, it was believed the stress on the exhaust system would be reduced because the engine would not be operating for as long in “dyno mode.” The new function was installed in existing vehicles through software updates. The defendants and other co-conspirators falsely represented, and caused to be represented, to U.S. regulators, U.S. customers and others that the software update was intended to improve durability and emissions issues in the vehicles when, in fact, they knew it was used to more quickly deactivate emission control systems when the vehicle was not undergoing emissions tests.
      After years of VW selling their “clean diesel” vehicles in the United States that had the cheating software, in March 2014, West Virginia University’s Center for Alternative Fuels, Engines and Emissions published the results of a study commissioned by the International Council on Clean Transportation (ICCT). The ICCT study identified substantial discrepancies in the NOx emissions from certain VW vehicles when tested on the road compared to when these vehicles were undergoing EPA and CARB standard drive cycle tests on a dynamometer. Rather than tell the truth, VW employees, including Neusser, Gottweis, Schmidt and Peter, pursued a strategy to disclose as little as possible – to continue to hide the existence of the software from U.S. regulators, U.S. customers and the U.S. public.
      Following the ICCT study, CARB, in coordination with the EPA, attempted to work with VW to determine the cause for the higher NOx emissions in VW diesel vehicles when being driven on the road as opposed to on the dynamometer undergoing standard emissions test cycles. To do this, CARB, in coordination with the EPA, repeatedly asked VW questions that became increasingly more specific and detailed, and tested the vehicles themselves. In implementing their strategy of disclosing as little as possible, Neusser, Gottweis, Schmidt, Peter and their co-conspirators provided EPA and CARB with testing results, data, presentations and statements in an attempt to make it appear that there were innocent mechanical and technological problems to blame, while secretly knowing that the primary reason for the discrepancy was their cheating software that was installed in every VW diesel vehicle sold in the United States. The co-conspirators continued this back-and-forth with the EPA and CARB for over 18 months, obstructing the regulators’ attempts to uncover the truth.
      The charges in the indictment are merely accusations and each defendant is presumed innocent unless and until proven guilty.
      The case was investigated by the FBI and EPA-CID. The prosecution and corporate investigation are being handled by Securities and Financial Fraud Unit Chief Benjamin D. Singer and Trial Attorneys David Fuhr, Alison Anderson, Christopher Fenton and Gary Winters of the Criminal Division’s Fraud Section; Trial Attorney Jennifer Blackwell of the Environment and Natural Resources Division’s Environmental Crimes Section; and from the U.S. Attorney’s Office for the Eastern District of Michigan, Criminal Division Chief Mark Chutkow and White Collar Crime Unit Chief John K. Neal and Assistant U.S. Attorney Timothy J. Wyse. The Justice Department’s Office of International Affairs also assisted in the case. The Justice Department also extends its thanks to the Office of the Public Prosecutor in Braunschweig, Germany.
      The Civil Resolutions:
      The first civil settlement resolves EPA’s remaining claims against six VW-related entities (including Volkswagen AG, Audi AG and Porsche AG) currently pending in the multidistrict litigation before U.S. District Judge Charles R. Breyer of the Northern District of California. EPA’s complaint alleges that VW violated the Clean Air Act by selling approximately 590,000 cars that the United States alleges are equipped with defeat devices and, during normal operation and use, emit pollution significantly in excess of EPA-compliant levels. VW has agreed to pay $1.45 billion to resolve EPA’s civil penalty claims, as well as the civil penalty claim of CBP described below. The consent decree resolving the Clean Air Act claims also resolves EPA’s remaining claim in the complaint for injunctive relief to prevent future violations by requiring VW to undertake a number of corporate governance reforms and perform in-use testing of its vehicles using a portable emissions measurement system of the same type used to catch VW’s cheating in the first place. Today’s settlement is in addition the historic $14.7 billion settlement that addressed the 2.0 liter cars on the road and associated environmental harm announced in June 2016, and $1 billion settlement that addressed the 3.0 liter cars on the road and associated environmental harm announced in December 2016, which together included nearly $3 billion for environmental mitigation projects.
      A second civil settlement resolves civil fraud claims asserted by U.S. Customs and Border Protection (CBP) against VW entities. VW entities violated criminal and civil customs laws by knowingly submitting to CBP material false statements and omitting material information, over multiple years, with the intent of deceiving or misleading CBP concerning the admissibility of vehicles into the United States. CBP enforces U.S. customs laws as well as numerous laws on behalf of other governmental agencies related to health, safety, and border security. At the time of importation, VW falsely represented to CBP that each of the nearly 590,000 imported vehicles complied with all applicable environmental laws, knowing those representations to be untrue. CBP’s relationship with the importing community is one based on trust, and this resolution demonstrates that CBP will not tolerate abrogation of importer responsibilities and schemes to defraud the revenue of the United States. The $1.45 billion paid under the EPA settlement also resolves CBP’s claims.
      In a third settlement, VW has agreed to pay $50 million in civil penalties for alleged violations of FIRREA. The Justice Department alleged that a VW entity supported the sales and leasing of certain VW vehicles, including the defeat-device vehicles, by offering competitive financing terms by purchasing from dealers certain automobile retail installment contracts (i.e. loans) and leases entered into by customers that purchased or leased certain VW vehicles, as well as dealer floorplan loans. These financing arrangements were primarily collateralized by the vehicles underlying the loan and lease transactions. The department alleged that certain of these loans, leases and floorplan financings were pooled together to create asset-backed securities and that federally insured financial institutions purchased certain notes in these securities. Today’s FIRREA resolution is part of the department’s ongoing efforts to deter wrongdoers from using the financial markets to facilitate their fraud and to ensure the stability of the nation’s financial system.
      Except where based on admissions by VW, the claims resolved by the civil agreements are allegations only.
      The civil settlements were handled by the Environmental and Natural Resources Division’s Environmental Enforcement Section, with assistance from the EPA; the Civil Division’s Commercial Litigation Branch; and CBP.
    • By William Maley
      This would have been my fourth Detroit Auto Show (or North American International Auto Show as some would like you to call it) for Cheers and Gears. But due to a leg injury sustained a couple of weeks before the show, I was unable to make it. Maybe that was a blessing in disguise as I would miss out on dealing with individuals who break out tape measures and clipboards to note every little detail, along with journalists complaining about why the show isn't held during a warmer month. But it would turn out this year’s show would be a bit disappointing.
      That isn't to say there were not any breakouts. The new Kia Stinger GT looks very intriguing as the new Lexus LS. I'm interested in checking out the new Toyota Camry (bet you weren't expecting that). Volkswagen's I.D. Buzz concept could bring something new in terms of electric vehicles (if it ever gets built). Plus Ford's announcement that the Bronco and Ranger were coming was some excellent news. But everything else landed with a bit of a thud. 
      So how did we end up here? A lot of this comes down to the past few years at Detroit being very bountiful with vehicles that caused jaws to drop and excitement levels to rise. The likes of the Acura NSX, Buick Avista concept, Chevrolet Bolt, Ford GT, and Lexus LC made our souls stir and revel in this magical time. But sooner or later, the well was going to dry up and leave a show that was lacking in spark. 
      At first, I thought it was part of a cycle. You have your high points before falling back down and then rising back up. But the more I thought about it, this might be a sign that the auto show is beginning to fade.
      The past few years have seen a number of automakers hold events off site before the kick-off of the show. Looking at the various social media feeds on Sunday, I was able to count seven different events. Holding something offsite give an automaker a way of controlling the message. It also gives a bit more time in the spotlight, not having to fight with other automakers for it during a packed press day.
      There are also more outlets for automakers to show their wares. The week before the Detroit Auto Show was the Consumer Electronics Show. The past few years have seen more and more automakers take part in regards to electric vehicles and autonomous driving. It has also been home for a small number of debuts; Volkswagen Budd-e, Chrysler Portal concept, and Faraday Future. 
      The combination of these two, along with some manufacturers pulling out of Detroit over the past few years resulted in this year's show. 
      Does this mean the Detroit Auto Show is doomed? Not at the moment. This year, organizers took a page from the LA Auto Show by doing more in terms of talking about the future of the automotive industry and mobility with press conferences and talks from various industry folks from Sunday to Tuesday.
      But the writing is beginning to appear on the wall. Down the road, it seems the auto show will not be the place where news is made. Instead, it will be the place where vehicles are gathered for all to look at.
      Before that day comes, we might get a couple more high points.

      View full article
  • Recent Status Updates

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