New York state has field suit against Volkswagen claiming that not only did someone at Volkswagen designed a system to bypass emissions tests (for which VW has already agreed to pay over $15 billion), but that upper management actually performed a benefit cost analysis on what would happen if they got caught:
Executives even carefully evaluated what the cost would be to the company if they were caught. Reviewing previous cases of violations of environmental regulations by auto manufacturers in the U.S. they predicted that the likely fines posed “only a moderate cost risk.” They cited the highest fine, imposed against Hyundai/Kia as amounting to “barely $91 per vehicle” and added “fines in this amount are not even remotely capable of influencing the share price of a globally operative company such as Volkswagen.”
Oops...and then they apparently tried to cover it up:
The most senior VW officer listed in the indictment is Martin Winterkorn who was CEO of Audi from 2002 to 2007, when the original defeat device was developed, and CEO of VW from 2007 until resigning on September 23, 2015. The day before he resigned, Winterkorn made a video statement that referred to “irregularities” in the diesel engines and said the company would act with “the greatest possible openness and transparency.”
A few weeks earlier, according to the complaint, a senior VW attorney advised multiple employees that a litigation hold was about to be issued, making it impossible to destroy or delete documents. A team of at least eight employees, all in the departments involved in designing the defeat devices, then deleted or removed data from the company records.
“Some, but not all, of the data has been recovered,” the lawsuit said.
At the same time VW’s Management Board, the nine men who had presided over the perpetration of fraud, the cover-up and then a public relations debacle that followed its exposure, were awarded $70 million in executive compensation for 2015 alone.
Oops.
