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Caleb Allen
CST 373
Prof. Kevin Cahill
February 22, 2018
Dieselgate Analysis

I am Caleb Allen, a student at California State University: Monterey Bay. My studies

have primarily been science and engineering subjects. Within these fields it is common to

encounter a situation where an action is possible, but engineers ought not to engage in it. The

law, user privacy, and common decency must never be viewed as obstacles to be overcome.

Because, if they are, technology can often be bent toward destroying them. My personal ethic

could be described as the “Christian Ethic.” Self-control is key to Jesus’ teachings. Even though

we could engage in many bad actions, we ought, instead, to subjugate our desires. I have been

taught, and long believed, that methodologies and mediums are irrelevant to the moral value of

actions. Thus, engineers must consider the ethics of everything they create.

The ramifications of falsifying emissions data in Volkswagen vehicles has presented us

with a case study in the importance of ethical behavior. The actions of a team of engineers at

Volkswagen cost their company greatly. The German automaker has paid out billions of dollars

in fines, saw an acute decline in stock price, alienated their customers, and damaged their brand.

Meanwhile individuals involved are facing charges, fines, and jail time. In light of these events,

the public is left with a burning question: why did they do it? However, it is not enough to

understand the culprits’ mindsets. If they behaved in an unethical manner, what ought they have

done instead?

History
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Martin Winterkorn became the Chief Executive Officer of Volkswagen in 2007. Soon

after his promotion, Winterkorn embarked on his vision for the company. He called it “Strategy

2018” and part of this strategy was a plan to push sales until Volkswagen became the largest auto

manufacturer in the world (Schmitt, 2010). Pursuant to this, Volkswagen began competing more

strongly in the United States market. They were largely successful, partly because in 2008 the

Volkswagen Jetta TDI Clean Diesel won the Green Car of the Year award. An ebullient Stefan

Jacoby, CEO of Volkswagen Group of America at the time, proudly declared: “It’s a

breakthrough in this country…It brings fuel consumption down, it’s environmentally friendly,

and -- this is a difference with a Prius -- this is really fun to drive” (Groom & Krolicki, 2008). In

2008 Americans were suffering through the beginning of the Great Recession. Concern for the

environment, increased gas prices, and tougher emission standards were driving consumers

toward efficient and environmentally friendly vehicles. At this key period, Volkswagen debuted

their take on a green car: clean diesel. These Volkswagen diesel cars were built by a beloved

company, had good gas mileage, were touted as environmentally friendly, and used a ubiquitous

fuel source. However, unbeknownst to consumers, these “clean diesel” vehicles were a fraud.

Winterkorn’s sales goals meant that the Volkswagen engineers had to “conjure up a near

miracle” (Lynch & Santos, 2016). Volkswagen engineers tried and failed to create a diesel

system compliant with United States Environmental Protection Agency’s Tier 2 diesel standards

of 0.07 grams of nitrous oxide, NOx, per mile ("Emission Standards: USA," n.d.). Rather than

persevering, these engineers chose to cheat. One of these engineers, James Robert Liang, later

admitted to the Federal Bureau of Investigations, FBI, that “…when he and his co-conspirators

realized that they could not design a diesel engine that would meet the stricter U.S. emissions

standards, they designed and implemented software…to cheat the emissions tests” (Volkswagen
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Engineer Pleads Guilty, 2016). Using a system created by the Robert Bosch Company, the

engineers created an algorithm that could detect emissions testing scenarios and respond by

altering engine characteristics. This amounted to an emission test “defeat device” being installed

in millions of vehicles. As Drew Kojack, Chairman of the International Council on Clean

Transportation said, “When the vehicle was on the ‘test cycle’ it [the defeat device] maximized

low emissions, and when the vehicle was off the ‘test cycle’ it maximized fuel economy...” (How

VW cheated, 2015). Later in their development, Volkswagen came up with a method of actually

cutting emissions, with the addition of a liquid called “AdBlue,” but chose, instead, to stick with

their defeat device (Domonoske, 2015).

It may be too trite to call these engineers’ actions “cheating.” A great deal of effort went

into the deception they implemented. Employees were driving to work every day to fine tune an

algorithm specifically intended to break the law and generate fraudulent data. There seems to be

no indication that this defeat device failed to do its job. It was good software. They had tested it

and worked out the bugs. They trained their algorithm to detect testing scenarios so well that it

took four years and a third party to suss out.

Seen in that light, their actions would seem to be extraordinary and unprecedented.

However, examples such as the cancer-causing effects of tobacco and the heart damaging pain

medication Vioxx show that these situations are all too common (Berenson, Harris, Meier, &

Pollack, 2004; Heath, 2016). Sometimes companies are comfortable with causing harm. In

Volkswagen’s case, this was not even the first time they had used a defeat device. Volkswagen

was fined $120,000 for a defeat device that was discovered in 1974: “According to a March 13,

1974, account…VW didn't report to U.S. regulators that it had included temperature-sensing
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devices…that disabled systems that controlled emissions...” (Gardella & Brunker, 2015).

Volkswagen had a history of cheating.

Seven years after the Volkswagen Jetta won Green Car of the Year, in September of

2015, a shocked news media broke the story of Volkswagen’s deceit. The EPA filed a Notice of

Violation against Volkswagen on September 18th, 2015 (Brooks, 2015). Worth noting is that the

EPA did not discover the discrepancy. Instead, a Non-Government Organization named the

International Council on Clean Transportation (ICCT) reported the issue to the EPA, the

California Air Resources Board (CARB), and Volkswagen fifteen months before the Notice of

Violation was filed (German, 2015). The ICCT was hoping to convince Europe that tighter

emissions standards for diesel engines were possible to meet. Since the United States had very

tight standards at the time, they decided to test diesel vehicles there. ICCT Chairman, Drew

Kojack, explained in a CNN interview: “We set off to try to actually prove that diesels can be

clean in the United States” (How VW cheated, 2015). They tested Volkswagen cars in the lab and

obtained great emissions results. However, they found that when the Jetta TDI Diesel was tested

on the road its emissions increased up to 1.5 g/km NOx, which was 318% of the legal limit

(Jaffe, 2015).

John German (2015), Co-Chairman of the ICCT, claims, in an interview with the BBC,

that he suspected the presence of a defeat device before reporting the issue: “The words ‘defeat

device’ are not something you ever say unless you’re certain…we found high, very high,

emissions in the real world...While, we suspected it might be a defeat device, we never said

that.” Without anything definite, the team turned their data over to CARB and the EPA (German,

2015). Despite Volkswagen’s cheating, the ICCT ultimately proved that clean diesel is possible
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because the BMW X5 diesel car met the EPA’s Tier 2 standards (How VW cheated, 2015;

German, 2015).

The ICCT tried to give Volkswagen time to fix the problems with their cars:

“…we…turned over all the data and the report in May of 2014...I sent a courtesy copy

to...Volkswagen on May 28th, 2014” (German, 2015). There are reports that Volkswagen CEO

Martin Winterkorn was made aware of the ICCT findings, and ignored them due to the cost of

fixing the issue (Neate, 2016). Yet these reports contradict Winterkorn’s later statements before a

Parliamentary committee in Berlin where he claims he was not informed of the defeat device

(Matussek, 2017). In marked contrast to these confusing reports, the FBI claims that the

managers of Volkswagen were aware of the ICCT report, and made a conscious decision to

cover it up (Schmitt, 2017, p. 2). It is clear that Volkswagen thought something was wrong,

because in December of 2014 they sent out a “fix” that was later shown to be insufficient

(German, 2015).

It is at this point in the timeline that Oliver Schmidt comes into play. “Schmidt was

general manager of Volkswagen’s U.S. Engineering and Environmental Office…he was

responsible for managing relations with the EPA and the California Air Resources Board

(CARB)” (Schmitt, 2017, p. 1). Schmidt was accused of, and later pled guilty to, covering up the

ICCT report, which he had analyzed (Gonzales, 2017; Schmitt, 2017, p. 1). While he admitted to

breaking the law, Schmidt seems like the least powerful conspirator. If justice is to be served to

bigger players like the CEO Winterkorn, it must be the German government who convicts them.

In September of 2015, Volkswagen confessed their use defeat devices. The FBI pinpoints

August 19th, 2015 as the first day someone from Volkswagen admitted what they had done

(Schmitt, 2017, p. 2). The admissions incited outrage and a flurry of media reports. Volkswagen
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had broken the law and lied to its customers. Martin Winterkorn resigned as CEO of Volkswagen

on September 23rd, 2015, though during the announcement he claimed to have done nothing

wrong: “I am not aware of any wrongdoing on my part” (Ewing, 2015). In the wake of the media

attention, Volkswagen’s stock price plummeted, class action lawsuits were filed, and employees

came under investigation for criminal activity.

It took over a year for Volkswagen and the US government to reach a settlement, but

other costs for Volkswagen continue to emerge. Unlike the 1974 fine of $120,000 dollars, this

time CNN Money reports that, so far, the scandal has cost Volkswagen $30 billion all told

(Riley, 2017). In the final tally, Volkswagen sold over 11 million cheat device equipped vehicles

(Kennedy, 2017). Only one of the engineers that worked to create the defeat device, James

Robert Liang, was charged (Lawrence, 2017). He was sentenced to 40 months in prison for his

crimes (Lawrence, 2017). Oliver Schmidt plead guilty to helping with the cover up, and he

received a $400,000 fine and 7 years in prison for it (Gonzales, 2017). However, he does not

seem to have had any part in creating the device itself. While Volkswagen has paid the price for

their actions, most of the engineers, and the German nationals in management, are still at large.

Media Views

Mass media outlets put a large emphasis on this event. It had all the elements of a good

story. “Dieselgate,” as some called the scandal, had lawbreakers and a cover-up conspiracy while

the ICCT were the plucky heroes of the drama. In the autumn of 2015 the United Nations

Climate Change Conference was on the horizon. The story of a German company falsifying

emissions test data in the United States reinforced the need for an international solution to

greenhouse gas emissions. The story also had an element of shock value: How could they do this

to us? Coupled with this feeling of betrayal, was a heavy emphasis on the defeat device
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methodology. How, exactly, did they circumvent the law? Questions like this one, asked by

Richard Quest, permeated reporting, “This defeat device...what’s the purpose of it” (How VW

cheated, 2015)? As if to illustrate what the lab conditions the defeat device was looking for were,

Fox news sent a reporter out to a CARB facility to show the audience how the testing was

conducted (Hunt, 2015). The media seemed to be trying to explain how a purely physical

process, the emissions testing, could possibly be falsified with software.

Early reporting followed a pattern. First, the reporter would break the story; usually

referring to Volkswagen’s actions as “cheating” on emissions tests. Next they would move on to

trying to explain the defeat device itself. The wrap up would be focused on the drivers of these

vehicles with a special emphasis on later compensation for them. Pundits wanted to know if the

management at Volkswagen knew about the problem. After all, maybe the engineers had been so

sneaky their bosses were fooled as well. Later in the cycle, after Winterkorn resigned, the media

began asking what the path toward reconciliation would be. Recent news coverage has been

mostly focused on the individuals who are pleading guilty to their roles in the crime.

Even though Volkswagen was strongly criticized by the news media, a distinctive pro-

Volkswagen bias could be detected throughout the reporting. Special emphasis was placed on

actions that Volkswagen could take to gain back the trust of their customers: “Volkswagen will

need to spend years getting back into the public's good graces” (Golson, 2015). In a report for

ABC News, TJ Holmes characterizes Volkswagen’s admission of guilt as a “mea culpa” (VW

emissions test scandal, 2017). The religious connotation suggesting the image of a person

begging God for forgiveness of sins committed. ABC News, through Holmes, seems to be

implying that Volkswagen must repent of their corporate sins. Thus, if Volkswagen will only

admit they did wrong, do their penance, and never sin again, they will be reconciled.
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Global warming impacts seemed to be downplayed in reports. Is not “cheating on

emissions” a euphemism for “conspired to cause the extinction of humanity?” Yet, only a

handful of references to climate change, like the following, materialized: “A lotta angry

customers…Volkswagen cheated and got caught, and millions of people have been putting out a

much bigger carbon footprint then they were lead to believe.” (VW emissions test scandal, 2017).

The same report mentions that 11 million cars were falsifying emissions data. That literally

meant multiple metric tons per kilometer of excess NOx were being spewed into the atmosphere.

Yet, where were the pictures of Los Angeles smog? Where was the video of that polar bear

trapped on a shrinking section of ice pack? News reports were filled with bland images of the

Volkswagen logo above their corporate headquarters and stock footage of cheerful Germans

putting the finishing touches on cars in the factories. Even with Volkswagen’s missteps, media

reporting showed it remained a beloved company.

Other Views

Harvard University streamed a forum discussing the issue in March 2016. Dr. David

Keith, who is a Professor of Applied Physics and one of Time Magazine’s “Heroes of the

Environment,” spoke about the dilemmas these car manufacturers face. The hotter they run their

engines the better their carbon dioxide, CO2, emissions and gas mileage (Ethics, Engineers, and

Emissions, 2016). However, the hotter the engine, the more NOx pollution is produced (Ethics,

Engineers, and Emissions, 2016). Keith describes the relation to emissions limits as: “[a]ll of the

automakers are kind of like a limbo artist, just barely getting under the wire” (Ethics, Engineers,

and Emissions, 2016). He further claims that Volkswagen’s excess emissions killed between 10

and 150 people (Ethics, Engineers, and Emissions, 2016). Dr. Keith has an interest in

atmospheric pollution, and he seems primarily concerned with reducing it to a sustainable level.
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Keith’s estimates present a vista from which to view the harm inflicted by Volkswagen. Not only

were laws violated, but accumulated air pollution can, and likely did, cause the deaths of

innocent people.

Everyday Ethics, a National Public Radio podcast that discusses ethical issues of the day,

devoted an episode to the scandal. The three hosts criticized Volkswagen’s actions. Kelly

McBride lamented, “This is Volkswagen, right? Farfegnugen. I’m so sad about this. I mean VW

is a beloved company” (Hapli, 2015). They tried to equate the situation to other scandals where

companies discovered defects in their products and then covered them up. Though the host,

Craig Kopp, felt there was no comparison: “This is a company literally scamming not only their

customers but the governments that control the emissions on those cars” (Hapli, 2015). This

panel also displayed the pro-Volkswagen bias the media seemed to hold, as evidenced by Kelly

McBride’s statements above. Their short podcast is a clean specimen of general thought. Even

though most of the panel was related in some way to mass media, they were free to share

personal opinions in this forum.

The fluidity of social media makes for difficult analysis ex post facto. There are now a

treasure trove of “opinions of the day” being shared regularly. Yet most social media outlets are

tailoring feeds to specific social circles, and it is, thus, difficult to get a full breakdown of

attitudes. However, the Harvard Business Review made an attempt by studying Twitter reactions

during this period. They found that tweets focused, first, on the crisis. Then focus shifted toward

who was at fault. Finally, as Volkswagen began moving toward reconciliation, the conversation

shifted to the company’s future and how they should improve (Swaminathan & Mah, 2016). It is,

perhaps, coincidental that the Twitter cycle seems to mirror the mass media cycle.

Ethical Perspectives
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Where did the engineers and management at Volkswagen go wrong? They did not

properly apply ethical reasoning to their decisions and stumbled as a result. Even if the group of

engineers who created the defeat device had gone rogue, the Volkswagen management still

shares in the fault. Oliver Schmidt has plead guilty to participating in a cover-up, likely

involving management, after the ICCT report was presented. For the sake of argument, let us

assume the following course of events. An interpretation of the convicted engineer James Robert

Liang’s story would show that: first, a rogue group of engineers created and installed a defeat

device in Volkswagen clean diesel vehicles. Next, according to the FBI’s accusations of Oliver

Schmidt and John German’s statements: six years later, around April of 2014, Volkswagen

management was informed of the issue after the release of the ICCT report. By inference and

FBI accusation: between April of 2014 and September of 2015, Volkswagen management

actively participated in efforts to hide the device.

From a Contractarian point of view, the actions of both parties were unethical.

Volkswagen had willingly entered the United States market and, thereby, agreed to an implicit

contract to abide by the will of the United States as Sovereign. The defeat device was tuned,

tailored, and intended, specifically, to break the law. As such, the social contract between these

Volkswagen engineers and the United States was broken. These engineers did not seek to

dissolve their contract with the United States, instead they broke it. In Contractarian ethics,

morality lies in strict adherence to explicit and implicit contracts (Muller, 2016). By that

reasoning, these engineers engaged in unethical behavior because they purposefully violated a

contract while pretending to adhere to it. Volkswagen management were complicit in their

engineers’ crimes, because they attempted to cover them up. They were made aware of the defeat

device and chose to violate the social contract themselves. As such, both the engineers and
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Volkswagen management showed contempt for the rule of law, and, therefore, did what they

ought not to have done.

Both the engineers and management behaved unethically from a Deontological

perspective. They violated two of Immanuel Kant’s formulations: the formulae of universal law

and of humanity. According to the formula of universal law, to see if an action is moral, one

must create a maxim that describes their actions and then attempt to apply it to all of humanity

(Johnson & Cureton, 2018). The act is immoral if applying it universally leads to a contradiction

(Johnson & Cureton, 2018). In this case the engineers showed that the maxim they wished to

apply to all humanity was: ignoring regulatory standards. If everybody should ignore regulatory

standards, then food product standards should be ignored. If food product standards should be

ignored, then food products that poison people would be produced. It is very unlikely that the

engineers who created this defeat device wished for the food they eat to be poisoned. As such,

they would be unable to universalize their actions without contradiction. Therefore, they acted in

an unethical manner. The same logic would hold true for Volkswagen management. The maxim

management could have considered might have been: ignoring regulatory standards when it is

expensive to meet them. There would be cases where food standards would be expensive to

meet, thus the same logic holds.

The formula of humanity states that “…we should never act in such a way that we treat

humanity, whether in ourselves or in others, as a means only but always as an end in itself”

(Johnson & Cureton, 2018). More explicitly, we are not to treat people as mere means, or as

tools to get what we want. These engineers treated Volkswagen’s customers as mere means to an

end. The “ends” being to keep their jobs or to gain money or promotion. The engineering team

knew that the customers who purchased these vehicles were being deceived. They did not see
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their customers as ends in and of themselves, or else they would have been compelled to provide

the truth to each person before purchase. Thus the actions of the engineers violated Kant’s

formula of humanity and were unethical. When Volkswagen management found out about the

devices, they did not choose to immediately halt all sales of the product. Thus, they used their

customers as a means to the following ends: 1) to continue making a profit and 2) to continue the

cover-up of their own crimes. Volkswagen management also treated each customer as a mere

means and, therefore, acted unethically.

According to the Greatest Happiness Principle of Utilitarianism “actions are right in

proportion as they tend to promote happiness, wrong as they tend to produce the reverse of

happiness” (Mill, 1863). For a time, Volkswagen engineers had made themselves and their

customers very happy. The engineers got to keep their jobs and, perhaps, received bonuses

because of their acts. Clean diesel customers got to drive powerful, high gas mileage cars that

came up green every time their emissions were tested. Utilitarianism, however, does not consider

only a few people at a time, nor does it look only at intermediate results. The ultimate results of

an action determine if it was moral. If Dr. Keith is correct in his assertions, then in exchange for

this happiness provided to Volkswagens engineers and customers, between 10 and 150 people

died (Ethics, Engineers, and Emissions, 2016). On top of that unhappiness and pain, must be

added the misery of all those Volkswagen customers upon learning that they had been deceived.

Now two employees are going to jail, investors in Volkswagen lost money, the company has

been heavily fined, and a myriad other bad outcomes have come from this decision. Examination

of the outcome of the engineers’ actions show that their choice lacked utility. Furthermore, the

choice of Volkswagen’s management lacked utility because they failed to prevent any pain by

their cover-up, while allowing more people to be poisoned by pollution. The results show that
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their best option would have been to immediately act and limit the damage to their company,

their customers, their investors, the environment, and themselves.

Future Challenges

Western society has begun a concerted effort to get greenhouse gas emissions under

control. Auto manufacturers other than Volkswagen managed to comply with emissions

standards and their techniques will solidify within the industry. If there is a lesson to be learned

from the push towards emission controls, it is that good engineering can meet the challenge. As

has been shown, the actions of Volkswagen did not merely break the law but may have also cost

the lives of innocent people. However, pollution and greenhouse gases are a problem that far

exceed the scope of Volkswagen’s offenses.

Soon after the emissions scandal came to the public’s attention, developed countries of

the world negotiated the Paris Climate Agreement in 2015. The agreement was designed as a

world-wide effort to get production of greenhouse gases under control. The challenges to

business are great but humanity has no choice. The evidence for the scope of the problem is

shown by consecutive years of record heat throughout the world. “Last year was the third hottest

on record in the United States, with an average temperature of 54.6 degrees Fahrenheit—2.6 F

above average. Only 2012 and 2016 were warmer than 2017…” (Waldman, 2018). The future is

bleak for humanity if global warming is not prevented.

Current warming trends serve only to alert us to the problems humanity will face in the

future. Earth’s average temperature has increased by 2° F in the last 1¼ century, the oceans alone

are 0.302° F warmer, the ice caps of our planet are melting, and the ocean has risen 8 inches

(“Climate change evidence,” 2018). These small changes are measurable but most people are
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unable to really feel the effects. As time goes on, if this problem is not addressed, we will begin

to face landmasses disappearing under the sea, drought, and massive ecological damage. The

most terrifying possibilities are those in the far future. For instance, Stephen Hawking recently

predicted, while commenting on President Donald Trump’s decision to pull out of the Paris

Climate agreement: “[w]e are close to the tipping point where global warming becomes

irreversible…Trump's action could push the Earth over the brink, to become like Venus, with a

temperature of two hundred and fifty degrees, and raining sulphuric acid” (Simon-Lewis, 2017).

Fortunately, global warming is a slow process and we have a real chance to prevent the worst

cases from happening.

There is a solution to the problem of runaway greenhouse gas emissions, and the

destructive effects of global warming. That solution is international cooperation. The Paris

Climate Agreement is an excellent example of the type of direction the world should be moving.

Those who signed agreed to work toward keeping global temperatures at 2° Celsius under their

pre-industrial levels (Simon-Lewis, 2017). Since every country resides on the same planet, the

effort can only succeed with everyone’s cooperation. Imagine every person on earth sailing a

vast ocean in the same boat. If one country drills holes in the bottom of the boat, the whole craft

sinks. In the same way, the atmosphere is shared among all and we need a world-wide solution to

climate change.

My Reflection

Volkswagen should be punished, severely, for this infraction. However, I believe the $30

billion cost so far to be sufficient; it encompasses multi-year profit margins for the company.

This scandal has set a strong precedent and shown that the costs of cheating are huge. Employees

that looked previously on small fines for these type of infractions, must now look not only
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toward corporate ruin, but also personal jail time. Therefore I believe that the path followed by

the United States government has been a prudent one and should reinforce the rule of law for

many years to come.

My initial attituded toward the Volkswagen emissions scandal was one of profound

disinterest. I have been very successful at ignoring such depressing stories in recent years.

During this study, however, I found the engineers actions ominous. One day I may also be asked

to produce software intended for illegal acts. Nietzsche (2009) famously wrote, “[a]nd if thou

gaze long into an abyss, the abyss will also gaze into thee.” This scandal and the Volkswagen

engineers’ actions are like an abyss; one that we are all forced to look upon. While these

engineers were changed in a negative way by it, I believe that I, instead, have been strengthened.

It was so easy for them to look at their problems and think that their defeat device was the

perfect solution. I am profoundly thankful to study this subject because, as a result, I will be

better able to face such choices in the future.

I believe that new vehicle testing needs to be reexamined by EPA and CARB. They must

examine vehicles in the lab and on the road. One possible solution to the worldwide emissions

problem would be the carbon tax system, where companies could be taxed for their contributions

to global warming. Then, if they falsify emissions, whoever arbitrates the carbon tax system

would simply charge them for the overage; the arbiter should also add on a strong penalty for

cheating. This system would give companies like Volkswagen a way to pay for their mistakes by

engaging in environmental programs that could, quantifiably, remediate the damage they caused.

Finally, ethical considerations must be made by people within companies; especially, now that it

has been made abundantly clear that everyone must not only ask themselves “can I do this,” but

also “ought I do this.”

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