It's amazing what a little software can do – turn a portable phone into a computer, put a man on the moon, destroy the reputation of a German car company. Yes, all it took to send the Love Bug into the ditch was a few lines of code.
Volkswagen has been accused by the United States Environmental Protection Agency of hiding software in its popular line of diesel cars in order to circumvent emissions standards. The company isn't denying the charge and has stopped selling the models in question in the States. Volkswagen Canada also pulled those models off the floor on Monday; the same thing is happening in European countries.
The software was evil ingenuity incarnate. It adjusted the engine's output in order to reduce emissions when a car was hooked up to testing equipment, then increased the emissions above legal levels when the car was on the road, giving the engine more power to go along with the extra smog.
Volkswagen's CEO, Martin Winterkorn, apologized over the weekend. The company's stock dropped 20 per cent on Monday, partly because the EPA says the fine for this alleged deception could rise as high as $18-billion, and partly because the company is now faced with recalling 482,000 cars in the U.S. alone.
This is a disaster for Volkswagen. The company struggled after the U.S. brought in new emissions standards in 2007 that forced it to stop selling its diesel models. It has made a comeback since 2009, when it introduced bestselling "clean diesel" models that we now know were not especially clean at all.
That comeback is now over. Beyond the damage from the fines and stock drop lies the prospect of multiple class-action lawsuits. One has already been filed in Seattle; expect many more.
The most unsavoury part of this business is that Volkswagen deliberately deceived consumers, who were told they were buying one thing but were sold another. There was no way for the consumer to beware, because the treachery was hidden deep in the computer chips that operate modern vehicles, and the cars had the EPA's stamp of approval.
Volkswagen played its customers for fools. Its slogan is "Das Auto," but it will be a long time before anyone associates Volkswagen with something so straightforward again.