VOLKSWAGEN HAS A PROBLEM

[BUSINESS ★★]

VOLKSWAGEN HAS A PROBLEM

Volkswagen

(P1) Volkswagen is confronted with a MONUMENTAL challenge.

(P2) The company has admitted that 11 million of its cars used illegal software to cheat EMISSIONS STANDARDS.

(P3) Now, many owners are demanding that the OFFENDING cars be fixed.

(P4) That’s EASIER SAID THAN DONE, and Volkswagen has already tried — and failed — twice.

(P5) Here’s the issue, according to the US Environmental Protection Agency: Cars with Volkswagen’s 2-liter TDI TURBO-DIESEL FOUR-CYLINDER ENGINES include software that detects when the car is UNDERGOING emissions testing and turns on a suite of pollution-control systems.

(P6) But as soon as the test ends, the controls switch off, leaving the engine free to emit up to 40 times the legal limit of nitrogen oxide, a highly polluting gas. According to the California Air Resources Board, Volkswagen admitted to using a defeat device during a September 3 meeting with the agency and the EPA.

(P7) The problem for Volkswagen is that getting the engine’s emissions IN LINE WITH pollution standards probably means SACRIFICING something else.

(P8) “Building an engine involves balancing four factors — performance, emissions, DURABILITY, and fuel economy,” explained Jake Fisher, Consumer Reports’ director of automotive testing.

(P9) Right now, VW has sacrificed emissions to create an engine that offers great performance, incredible fuel economy, and solid RELIABILITY.

(P10) “Whatever the fix is, it will likely sacrifice fuel economy and probably durability as well,” Fisher said.

(P11) So fixing the cars won’t be as simple as changing the software to turn on all of the vehicle’s emissions-control systems.

(P12) “We aren’t sure what the exact fix will be,” expert Matt DeLorenzo told Business Insider. “We also don’t know what kind of performance or fuel economy the car will return when the emissions control is turned on.”

(P13) Volkswagen actually tried to fix the problem using a software patch in December 2014 and then again in April 2015.

(P14) Neither attempt was successful.

(P15) As DISQUIETING as the recent REVELATIONS have been, Fisher claims that Consumer Reports research shows that many owners are still happy with their TDI diesels.

(P16) But this is not the case with everyone.

(P17) Those who purchased their TDI with the belief that they were taking ownership of an environmentally friendly vehicle feel deceived.

(P18) On the other hand, those who appreciate the performance, reliability, and fuel economy of the TDI will likely not accept a fix that would materially change the characteristics of the car they purchased.

(P19) This could lead to the NUCLEAR OPTION — a buyback of all the offending cars.

(P20) “Buybacks and forced buybacks enforced through a judgment are highly unusual,” attorney Eric Gibbs, who has filed a lawsuit against Volkswagen, told Business Insider.

(P21) Buybacks are EXCEEDINGLY rare in the automotive world because they call for the car company to spend millions if not billions to “buy back” defective cars from owners.

(P22) Manufacturers typically avoid this route due to the EXORBITANT costs and the negative publicity generated by the action.

(P23) According to DeLorenzo, there’s a 50-50 chance a buyback happens in this case, and it all depends on the fix VW comes up with.

(P24) “If the change in performance after the fix is MINIMAL, then it’s not a problem,” DeLorenzo said. “But if the change in performance is great, the LIKELIHOOD of a buyback increases.”

(P25) If there is a buyback of the 482,000 cars in the US, it would be the largest in industry history and cost VW billions of dollars.

(P26) VW owners aren’t standing IDLY by. They’re taking action through the legal system in the form of CLASS ACTION LAWSUITS.

(P27) “Volkswagen owners feel like they’ve been MISLED and deceived,” Gibbs told Business Insider. “They thought they were getting a clean diesel and paid a PREMIUM for it.”

(P28) Gibbs, founding partner of Girard Gibbs, is one of the many lawyers representing owners of the 482,000 cars in the US affected by VW’s emissions scheme.

(P29) According to Gibbs, more than 50 class-action lawsuits have been filed around the country, and that number could reach into the hundreds.

(P30) In the suit, owners are demanding a buyback or a repair that would not compromise performance, emissions, and fuel economy.

(P31) But the likely outcome of these suits isn’t going to be a buyback.

(P32) “Typically, settlements involve REBATES and certificates that would give owners a discount on a new VW or protection from a drop in resale value,” DeLorenzo said.

(P33) Either way, there’s no easy fix to this problem.

WORDS: 719

SOURCE: http://www.businessinsider.com/volkswagens-cheating-engines-cant-be-easily-fixed-2015-9

DISCUSSION QUESTIONS:

If you found the passage difficult to read or had problems understanding specific words or idiomatic expressions, please discuss them with your tutor. The following discussion questions should be answered in your own words and with your own arguments.

  1. Briefly summarize the content of the article in your own words.
  2. Do you think that the kind of deception that Volkswagen engaged in is typical or unusual corporate behavior?
  3. The US Justice Department could bring legal charges against Volkswagen executives. Do you think that any of them will go to prison?
  4. If you owned one of these cars, how would you feel about this situation? What outcome would you want to see?
  5. Is it important to you to own a “green” car?

EXPRESSIONS TO PRACTICE:

What do the following expressions mean? Practice using each expression in a sentence; extra points if you can use it in conversation.

  • Easier said than done
  • In line with
  • Nuclear option
  • Class action lawsuit

Cambly Practice Button

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