September 22, 2015

Dirty Diesel

Volkswagen and Audi have been caught cheating the American public. Big time. The scandal has shattered Volkswagen's populist image. Millions of cars are affected. Billions of dollars in fines are at stake. Car owners are furious. The German magazine Der Tagesspeigel reports that CEO Martin Winterkorn is out. Class action lawsuits, government penalties, and possibly criminal charges will follow. What, exactly, is going on?VW.jpg

Last Friday, the Environmental Protection Agency sent Volkswagen AG, along with its affiliates Audi AG and the Volkswagen Group, an official Notice of Violation concerning its use of an illegal "defeat device", used to evade emissions testing. You can read that letter here.

The EPA explains, "These cars contain software that turns off emissions controls when driving normally, and turns them on when the car is undergoing an emission test. Known as a “defeat device,” this design feature results in the cars emitting up to 40 times the amount of NOx emissions that the standards allow. NOx standards are in place to ensure public health is protected." The use of such a "defeat device" is highly illegal.

No sooner did this announcement hit the press than VW admitted its misconduct. That it is only now admitting its intentional and deliberate cheating practices is shocking. Although the scandal only just became public, VW knew it was caught as early as May 2014. And yet, it continued to install the devices on new cars being sold.

VW never thought it would get caught, and the fact that it did at all is a bit of a fluke.

Daniel Carder, a professor at West Virginia University's Statler College of Engineering, and team of five including two grad students, performed a study that found much higher on-road diesel emission levels for VW vehicles than what official U.S. testers were seeing. At first they couldn't believe the results, but confirmatory testing produced early evidence Volkswagen was cheating on U.S. vehicle emissions tests. That study was funded by the nonprofit International Council on Clean Transportation. They were actually looking for proof that diesel could be a clean fuel. The results caught even the testers by surprise. You can read more about the ICCT here.

"The testing we did kind of opened the can of worms," Daniel Carder, the mild-mannered West Virginia researcher who lead the investigative team, says. That is an understatement.

The study, completed in May 2014, was later corroborated by the United States Environmental Protection Agency and California Air Resources Board.

VW has been heavily marketing its small diesel cars as the Clean Green alternative for years. But even as it was launching a media campaign to lure environmentally responsible buyers, VW was brazenly equipping more than 11 million vehicles with the deceptive device over a period of more than 6 years. The affected diesel models include:

Jetta (MY 2009 – 2015)
Jetta Sportwagen (MY 2009-2014)
Beetle (MY 2012 – 2015)
Beetle Convertible (MY 2012-2015)
Audi A3 (MY 2010 – 2015)
Golf (MY 2010 – 2015)
Golf Sportwagen (MY 2015)
Passat (MY 2012-2015)

Consumers can get further information from the EPA here.

Consumers can get information about legal cases filed in California by contacting the law firm at

June 8, 2014

Students Deserve a Fair Shot

Few people in America know more about student debt than Elizabeth Warren does. Before being elected to the Senate from Massachusetts, she was a professor teaching bankruptcy law at Harvard Law School, and has written books on financial literacy, such as "The Two Income Trap." Now Senator Warren is writing legislation to improve the situation.

Commencement speakers may spout cliches and optimism, with their gushing words of advice. But the reality is not abstract or philosophical. Debt is real.

Americans collectively owe about a trillion dollars in student loan debt. It is hard even to grasp what that figure means, but it is useful to note that about 40 million current and former students carry some part of that crushing debt load. Student loan debt follows the borrowers for much of their lives, affecting their credit for years after graduation, affecting where they live, and even affecting what jobs they can take. obamawarren.jpg It is not just a personal hardship, but a national tragedy when students cannot afford to take an entry level job, apprenticeship, or intern opportunity in the very field they incurred debt in order to train for.

Democrats, lead by Senator Elizabeth Warren and supported by the Obama administration, have come up with the best practical solution offered in many years. The Warren proposal would allow students and alums the opportunity to refinance that debt at lower interest rates those commonly available for other types of loans. "When interest rates are low, homeowners, businesses and even municipalities refinance their debt. But right now the government doesn't offer a refinancing option to students," Senator Warren explained. "Allowing students to refinance their loans would help give them a fair shot at an affordable education." This kind of relief is long overdue, and could go far to help students and former students get their credit life back on track.

In a familiar refrain Warren said, "Student loan debt is a real and growing crisis that is crushing young people and dragging down our economy." That sounds familiar. What is new is that the government is stepping in. The student loan refinance proposal is part of a coordinated congressional agenda that Democrats label "A Fair Shot." Meanwhile, President Obama is not waiting for Congress to act. He is issuing a partial fix by executive order today, directing the secretary of education to ensure that certain federal student loans be capped at 10 percent of the borrower's monthly incomes. Hopefully, election year politics will encourage bipartisan support rather than partisan debate. You can read more about the Warren proposal here and more about Obama's executive action here.

November 28, 2012

Toyota Recalls Millions of Cars, Including Corolla and Prius Models

Toyota's problems continue to cascade through a series of announcements and news reports. In October 2012, media drew its attention to Toyota's world-wide recall of about 7.43 million vehicles, for defects in the power window switches causing a risk of fire. That was the manufacturer's largest single recall ever.

Now the popular Japanese brand has announced the recall of another 2.8 million cars, involving multiple model years. The latest announcement concerns problems in the steering system and electric water pumps.

The good news is that Toyota is owning up to defects and giving its broad fleet of consumers fair notice and an opportunity to have the problems fixed. The bad news is that Toyota might soon surpass its competition for the dubious distinction of being most-recalled auto maker ever. At the same time, it is important to note that the absolute number of vehicles recalled reflects Toyota's high global market share, and the recalls are not for the entire vehicle, but particular components. Toyota Prius owners, in particular, are notably loyal to the brand and Toyota's dominance among hybrids is likely to continue.

March 7, 2012

More Bad News For Nissan

Just as we finished reporting on a fuel sensor defect in certain Infinitis, the National Highway Traffic Safety Administration Office of Defects Investigation now announces two additional recalls.

Campaign number 12VO79 reports a side airbag recall in certain 2003-2005 Infiniti Q45 vehicles. A defect in the wiring connector may cause non-deployment in the event of a crash. Even though these vehicles are otherwise out-of-warranty, Nissan will modify the wiring connector free of charge. Affected owners can expect a notice from Nissan beginning March 12, 2012.

Campaign number 12VO76 draws attention to the 2011-2012 Nissan Quest. Certain vehicle of this make and model, manufactured from July 29, 2010 through February 21, 2012 have a stalling problem due to software programming.

Some manufacturers contend that stalling or sudden deceleration is merely a driveability, or performance, problem. This is not the case. Loss of speed can be a serious safety problem in many situations – heavy traffic, turning left, changing lanes, freeway entry, or normal freeway driving. Nissan and NHTSA are reporting this as a safety recall, scheduled to begin in mid-March 2012. Owners ay contact Nissan at 1-800-647-7261 for more information.