The Seven Biggest Auto Industry Scandals
The Seven Biggest Auto Industry Scandals
(Bloomberg) -- Ford Motor Co. has become the latest carmaker to reveal potential flaws in its exhaust testing systems, underscoring challenges faced by an industry pressured by increasingly stringent emission rules.
Ford reported the issues Thursday after workers raised concerns in September. The manufacturer has hired an outside firm to help conduct a probe that could stretch into the summer. Ford said it hasn’t yet found any of its fuel-economy ratings are inaccurate. Ford’s fessing up is a far cry from Volkswagen AG’s handling of its so-called diesel-gate scandal, which has haunted the German giant for years and cost it upwards of $32 billion.
Here’s a list of major debacles that roiled carmakers:
Volkswagen
The German automaker admitted in 2015 that it outfitted about 11 million diesel cars worldwide with a defeat device, embedded software that allowed the vehicles to recognize when they were being tested in laboratory conditions. Days after the revelations, Martin Winterkorn stepped down as CEO of the company and was later charged in a Michigan federal court with conspiring to defraud the U.S. and violating the Clean Air Act. The scandal also led to the detention of former Audi CEO Rupert Stadler for a few months in a Bavarian prison. Costs have topped 32 billion euros ($36 billion) as legal battles with customers and investors ensued.
The company also battled a corruption scandal revealed in 2005. VW managers bribed worker representatives, a powerful presence at German companies, with luxury trips and outings to brothels. A number of managers were convicted.
Daimler
Daimler AG admitted to paying bribes in some states in Africa and elsewhere and entered a settlement with the U.S. around 2007. The U.S also installed an external monitor.
The carmaker is also under investigation by U.S. and German authorities over its practices on diesel emission setups.
Fiat Chrysler
Earlier this year, Fiat Chrysler Automobiles NV agreed to pay about $800 million to settle U.S. Justice Department, California regulators and consumers’ lawsuits over allegations it used defeat devices in 100,000 vehicles. A motion to have the settlement approved will likely be granted in the first half. Repair and other costs will add to Fiat’s total costs.
Mitsubishi Motors
In 2016, a fuel-economy ratings scandal damaged the Japanese automaker’s brand, claimed two top executives, cut earnings and forced the company to turn to Nissan Motor Co. for a bailout. Mitsubishi Motors Corp. said it used “desktop calculations” instead of running actual field tests and falsified data on the models sold from 2006 to 2016.
Nissan
In 2017, Nissan found workers not authorized to certify Japanese vehicles approved the final inspection at the very end of assembly lines, and that process may have dated back to 1979 at its Tochigi plant. Further internal investigations found employees also falsified some test data, although the carmaker said it didn’t overstate fuel economy. The scandal led to a temporary shutdown of Nissan’s plants in Japan and a recall of over 1 million cars.
Subaru
The same year Subaru Corp. also found workers recorded data on fuel economy and emissions from final inspection tests that deviated from prescribed speeds and humidity levels. The carmaker started a more thorough self-check, helped by third-party auditors, and found more instances of non-compliance in the final car inspection process. Yasuyuki Yoshinaga stepped down as Subaru CEO after the scandal.
Suzuki, Mazda, Yamaha
Suzuki Motor Corp., Mazda Motor Corp., and Yamaha Motor Co. said in August 2018 they conducted fuel economy or emissions checks on cars that fell short of Japanese standards. During testing for emissions and fuel economy, the car speed deviated outside the prescribed range for longer periods than allowed, technically known as trace error, the carmakers said.
Suzuki was previously embroiled in a scandal over wrong fuel-economy testing methods in 2016, after which Chairman Osamu Suzuki gave up the title of Chief Executive Officer to take responsibility.
To contact the reporter on this story: Ma Jie in Tokyo at jma124@bloomberg.net
To contact the editors responsible for this story: Anand Krishnamoorthy at anandk@bloomberg.net, Sam Nagarajan, Elisabeth Behrmann
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