Should EPA Prosecute Volkswagen to the Fullest Extent of the Law?

If the EPA chooses not to prosecute Volkswagen for its air toxins to the fullest extent of the law, then other automotive companies will violate the EPA’s standards continuously at the detriment of our health, Environment and morality.

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Executive Summary & Background

Volkswagen has recently become a ubiquitous conversation topic across global business following its massive scandal.The company not only programmed its emission system deliberately to pass their car’s failed emission metrics; it had done so by carelessly allowing their cars to produce Nitrogen Oxide (NOx; a fairly harmful biohazard affecting respiratory function) by an astounding 40 times the legal limit, and has gone unseen dating back to 2009. Volkswagen has caused virtually irreparable harm to the automotive industry’s transparency, its reputation and to the trust of its “valued” consumers. The EPA should make an example of Volkswagen and fully prosecute them for their negligible actions in order to fully reconcile with the industry they brought much scorn and suspicion to in addition to bringing justice to the public and environment that were negatively affected. Volkswagen should be prosecuted to the fullest extent of the EPA’s authoritative power to such a degree that this punishment serves as precedent that any company willing to pursue such deceptive and illegal measures will be deterred to do so by what VW will have to face. There is an abundance of compelling reasons that support the EPA to embark on these sanctions, penalties and lawsuits to ensure this never occurs again.

Widespread Current Trends of Eco-Awareness from the Public and Consumers Support this Action from the EPA

Often times it is emphasized in our world today that our generation (the youth), the millennial faction, represents and demonstrates the highest degree of activism and awareness in our country to battle and voice our opinions on the wrongdoings that should be brought to justice. We have an overwhelming amount of NGO’s (non-governmental organizations) currently ranging from a general petition-based group such as Change.org to RAN (Rainforest Action Network), which is spearheading the preservation and protection of our rainforests around the world.

With that said, there is a deeply ingrained prevalence of activism efforts in this nation that just so happens to involve a large ecological presence. If Volkswagen genuinely believes that in our current day in age with activism, their efforts won’t cause long-term sustained damage to their sales, reputation, brand-loyalty and stock price, they are surely mistaken because a majority of those aspects of their business have already been significantly impacted in the short-term and can potentially cause long-lasting implications to their bottom line among other negative effects. From a non-economic standpoint, the following intangibles will likely happen or have happened already.

• Brand Loyalty is not only put into jeopardy, it can also cause deter prospective VW buyers from ever becoming a customer as well as use word of mouth to ensure others don’t buy as well.

• Reputation not only was temporarily tarnished given that the executive management conspired to deceive the public and the EPA with its quality control of its emissions, but has likely been made to enable a cascading effect for generations to come hearing this story and seeing VW as a deceitful, negligent company.

• Recall: VW has already publicly stated 500,000 cars will be recalled for further inspection and correction of the programming and emissions. This alone will cost staggering amounts of capital. Luckily, VW set aside $7.4 billion to cover the scandal’s overwhelming amount of financial damage. That number recently was adjusted to 800,000 cars for recall.

• Stock Price: A substantial amount of investors reneged following the news of VW’s emission/programming scandals, and this will cause their market capitalization to decline greatly (dropped over 20 percent of its value directly after news came out), their stock price to suffer, and the likelihood of future investors to be deterred from investing.

This is a natural fact of life with how our civilization operates. Credibility is an integral part to our society and when that is compromised, it’s generally very difficult to regain that trust from whichever party or group was affected. The following elaborates on the financial aspect in greater detail of what their debacle has led to.

Economic Failures/Consequences

• Volkswagen recorded its first quarterly net loss ($1.83 billion) for at least 15 years after making great strides to cover the cost of the lawsuits, and vehicle recall expenses following the emission scandal that include nearly 11 million cars worldwide allegedly containing the deceptive software.

• $16.9 billion dollars according to the Economic Times was “wiped off the market value” of VW. Granted once the CEO, Martin Winterkorn, stepped down, the stock did recover incrementally, showing some positive signs.

• The EPA has indicated through their reports that Volkswagen faces fines that could total “more than $18 billion.”

With how interconnected our society is, injustices like theirs that are eventually debunked never really end well, and have grave consequences that cause even an established, goliath firm like Volkswagen to derail into a turbulent chaos. This is due to an unrelenting force, which is the rejection, litigation and disgust brought forth by the public and the market that they have successfully sold their products to since 1937. Despite this, companies still continue to engage in deceptive activities to deliberately deceive the EPA time and time again, and if the EPA doesn’t decide to place the highest penalties possible on VW, other companies won’t feel inclined to take them seriously which will create a cascading effect of dissent with the EPA.

What the EPA has done Thus Far in Managing the Emissions Scandal

The EPA has officially issued two notices of violation against Volkswagen adding 10,000 additional affected cars under the Porsche and Audi family, which only escalates the scandal, further denoting that three car companies, all under VW, were affected by the scandal. Not surprisingly, VW officially refuted these claims that the scandal had proliferated to the other two car brands. An assistant administrator of the EPA’s Enforcement and Compliance Assurance department by the name of Cynthia Giles commented, “VW has once again failed its obligation to comply with the law that protects clean air for all Americans.” This is clearly a current issue in our society that companies feel the right or need to cheat the system repeatedly. She goes on to say, “all companies should be playing by the same rules. EPA, with our state, and federal partners, will continue to investigate these serious matters, to secure the benefits of the Clean Air Act, ensure a level playing field for responsible businesses, and to ensure consumers get the environmental performance they expect.” Unfortunately, automotive companies like this that engage in highly illegal and immoral behavior show no remorse or shame in failing to satisfy our expectations and hopes, when we, the public, are the ones purchasing and supporting their company making it financially possible to continue their operations. All the second notice does is add the 10,000 affected vehicles to the massive list, which could spell subsequent fines for VW to pay. Is sending petty fines truly enough to resolve this issues reflecting the entire industry and beyond. It is not just VW that has been caught failing to comply with EPA emission standards and regulations. Regulators and NGOs fear European groups (BMW, GM) are doing the same kind of thing.

The EPA should make a concerted effort to publicly make an example out of VW by restricting their operations, fining them to the fullest extent allowed by law, and try to somehow prohibit them from releasing cars to the entire country if they continue to pollute excessively and defy all standards enacted to prevent health and environmental hazards in the first place. By doing this, the EPA will make a bold statement that they are a federal force not to be trifled with, and that those defectors of these regulations will face intense public scrutiny, enormous financial loss, a tarnished reputation, and endless legal battles that will ensue if companies in this industry follow VW’s example and try to deceive the system put in place. All it is meant to do is to ensure quality for our society and for our environment, and to make sure that we as a civilization are good stewards of the environment and its inhabitants along with genuinely caring about our actions reflecting our values. Unfortunately, this case is just another example of defiance to these basic human values that indicates the EPA must take greater, more drastic actions to mitigate these disasters created by companies like VW.

In contrast, The EPA might be asking too high of standards, making automotive companies feel tempted and even inclined to cheat

In our age, the environmental movement has taken off full steam ahead, leaving the companies that are unable to swiftly adapt to their regulations obsolete and unfit to perform their daily operations. The efficiency, fuel-economy, carbon emissions, and smog tests have been regulated stringently, leaving no room for added pollution in our time of a great anthropogenic crisis of global climate change. Critics of the EPA say the regulations are unrealistic and not generous enough with extending adequate time to these companies being forced to comply with their constantly changing legislation and pollution control mandates.

David Morotta from Forbes magazine argues that the EPA’s general solution to solving issues “must not only solve the problem at hand, but it also must not create a new problem as a result.” He argues that they shouldn’t try to solve the “original” problem, implying an ineffective solution. He goes on to say that “distributed natural systems respond faster, better and smarter than government regulations.” He ends his argument by saying that “further empowering the EPA is a move in the wrong direction. EPA’s nameless and faceless bureaucrats are completely disconnected from any dependence on the people. Delegating regulatory authority to a concept as legislatively vague as sustainability ensures no control can ever be exercised.”

However, what VW did was short-lived, and 6 years after they started this habit of cheating the system, they were eventually caught, exposed, brought to justice and faced numerous business, legal and environmental implications where they are paying a tremendous total amount (exceeding $30 billion) in order to mitigate and reconcile with those affected. These types of scandals in this industry at all costs must come to a screeching halt because if emissions are being mishandled that greatly, who’s to say the other companies aren’t doing this as we speak.

Going the cheating route does cut costs significantly and enhance the company’s main objective; maximize the bottom line. But what about the true external costs of this horrendous event that remain to be seen if they emitted their vehicle’s gases by 40 times the legal amount allowed? Global warming exacerbation, habitat loss due to increases in temperature, health defects, ecosystem contamination and so much more are the result of this irresponsible wasting/pollution. This action that the EPA can make against VW must be done in order to achieve some progress so that the industry doesn’t allow scandals like this to become normative and have the industry and the public become so incredibly used to this that we become desensitized. For the sake of our present and future generations, we cannot allow that to be the case. Forget the politics of it and think about the well-being of us, our children, and future generations, who will have to somehow endure this atrocity.

Citations:

• “Volkswagen Pushed Into Loss By Emissions Scandal- BBC News.” BBC News. N.P., n.d. Web. 05 Nov. 2015.

• Marotta, David. “EPA: Green Gone Wild.” Forbes. Forbes Magazine, 13 Jan. Web. 05 Nov. 2015.

• Nasr, Reem. “Porsche, More Audi Models Pulled into VW Scandal.” CNBC. N.p., 02 Nov. 2015. Web. 05 Nov. 2015.

• Boston, William. “Volkswagen Emissions Investigation Zeroes In on Two Engineers.” WSJ. N.p., 05 Oct. 2015. Web. 05 Nov. 2015.