As VW Scandal Unfolds, Ripple Effect Extends Through Entire Auto Industry

Volkswagen’s unfolding diesel emissions-fixing scandal, which is now known to affect 11 million cars worldwide and is causing the company’s stocks to plummet, could turn out to be just the tip of the iceberg, as the U.S. Environmental Protection Agency (EPA) and officials from Germany, France, the U.K., and beyond widen their probe to include other car makers.

“We need to ask the question, is this happening in other countries and is this happening at other manufacturers?” declared John German of the International Council for Clean Transportation (ICCT), a European-based NGO that is among those raising the alarm.

According to Reuters on Monday, the EPA and California officials said they would test diesel vehicles from other manufacturers for similar violations. In addition to Volkswagen, Reuters noted, automakers including General Motors and Fiat Chrysler sell diesel cars and SUVs in the United States.

Meanwhile, the Wall Street Journal reported Tuesday that regulators around Europe are beginning “to ponder whether such deception is widespread.”

The WSJ wrote:

“The artificial gaming of emissions tests threatens to become the car industry’s LIBOR moment,” Stuart Pearson, an analyst at Exane BNP Paribas, told the Financial Times, referring to the massive financial scam uncovered among London banks in 2012.

Adding to the speculation, the Guardian reported Tuesday:

Meanwhile, the UK’s Telegraph declared on Tuesday: “Every major car manufacturer is selling diesel cars that fail to meet EU air pollution limits, according to a report released this month.”

The Telegraph continued:

There is no shortage of U.S. stakeholders looking into the corporate malfeasance. In addition to the EPA and California’s Air Resources Board, the U.S. Congress is also investigating the debacle. New York and other state attorneys general are forming a group to probe the scandal, a spokesman for New York Attorney General Eric Schneiderman said.

And the U.S. Justice Department (DOJ)—which recently restated its intent to hold white collar criminals accountable—has reportedly taken the preliminary steps to open a criminal investigation into VW.

In a statement on Tuesday, consumer watchdog group Public Citizen called on the DOJ to follow through on its promises.

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“Justice demands a sharp break from the kid-glove, coddling treatment that the U.S. Department of Justice has shown to corporate criminals over the past decade,” said Public Citizen president Robert Weissman. “Assuming the allegations are true, this is a premeditated, intentional act designed to circumvent the law, with callous disregard for the fact that the vehicles were poisoning people and the planet in the process.”

“Volkswagen must be made to plead guilty for its crimes with no deferred prosecution agreement, regardless of whatever cooperation it now provides,” he continued. “Individuals inside Volkswagen must be prosecuted and should be sent to jail.”