The headline is a bit misleading: it’s nitrogen oxides, not carbon, that were masked. In fact the post points out later that increasing the nitrogen allowed the company to reduce carbon output. What VW did is terrible, but not quite as bad as the headline implies.
Perhaps they should be made to pay the maximum fine. Then the EPA would have $18bln to put directly into something that would reduce future pollution.
That seems like you’re punishing an awful lot of innocent investors (many of them normal middle class folks) for crimes that they had absolutely nothing to do with. I mean, not that your plan would ever come to fruition any way, but still.
It’s all about the clicks! Gotta get more clicks!
If I’m a TDI owner, what’s the EPA going to give me in return for my now-shitted on car?
Nothing. You’re going to have to get the firmware re-flashed before you can renew the registration. And once that is done, you can expect a noticeable decline in horsepower. (Mileage should still be fine though)
As I understand it, the $18bln is the EPA fine. Presumably there will be a class action lawsuit to settle damages against consumers. In other words, the EPA owes you nothing. However, VW certainly does.
Well, for crimes that they funded.
I’m not saying people who invest in VW or invest in funds that invest in VW are responsible for what happened, but maybe if we had a system where investing in criminal enterprises lost you your money then people wouldn’t want to invest in criminal enterprises. And then the whole “responsibility to stockholders” thing would not be a responsibility to do whatever underhanded, illegal, horrible thing possible to rake in a few extra dollars, but would instead be a responsibility to not do horrible things.
The system, as it is, encourages things like what VW did. The system, as @doctorow would like it to be, discourages things like this so strongly that we would actually be surprised when they happened instead of shrugging and saying, “Yeah, but what can we do?”
So what’s the EPA doing with that $18B? Into the general funds to repair some roads? Help pay down the debt? Because the $2,000 rebate on VW accessories I’ll get from a class action is pretty cold comfort.
For those who believe VW should be dismantled, here, then: http://wh.gov/iQ53E is where you can register your opinion.
The EPAs job isn’t consumer protection.
The fine and damages are two separate things.
The EPA is concerned with the fine part of it.
Damages are your problem.
As you point out, you will probably not receive fair compensation there.
Not only was the general investor (who could be anyone who had a couple hundred or thousand bucks and trusted the company) not responsible, but they were almost 100% completely unaware.
I didn’t want to invest in a criminal enterprise, but I’ve sure lost my money.
Right on, Cory! We can hope that the reaction of the rest of the press and the public outcry would have the reaction you proposed. Unfortunately tho, the corporations, as usual will find ways to weasel out of their responsibilities to the rest of the planet! And those responsible for the ‘mess’ will all quietly retire with nice golden parachutes, and quickly go hide away somewhere safe…we could hope that it’s a jail, but…
I’m asking real questions, and NOT trolling you:
if the investors share in the profits of the corporation, and those profits are not a result of direct shareholder action, why shouldn’t they share in the losses in the event of massive wrongdoing by said corporation? How would you punish the corporation WITHOUT impacting shareholders?
But the general, completely unaware investor got their cut of the profits of the enterprise. If you invest in a company that fails because the executives make terrible business decisions you might lose your money. If you invest in a company that fails because their chief accountant was embezzling then you might lose your money. But if you invest in a company that commits a massive fraud you ought to be protected? Why is criminal activity a special category that we need to protect companies from because we have to think of the investors?
Like I said, if you don’t want to invest in criminal enterprises then you should support what Cory is saying, because in the world he is proposing, very few large companies would be committing crimes like this one. You’d be able to invest knowing that the executives making the decisions for the company have incentives to prevent their companies from committing crimes instead of incentives to have the company commit crimes.
I’m pretty sure some murderers have gone to jail despite the terrible financial impact on their completely innocent children.
Well, for crimes that they funded.
I’m not saying people who invest in VW or invest in funds that invest in VW are responsible for what happened, but maybe if we had a system where investing in criminal enterprises lost you your money then people wouldn’t want to invest in criminal enterprises.
Except a lot of those investments are bundled into mutual funds and other instruments where the consumer/investor is generally abstracted away from the actual corporate entity. Now, the goal of such instruments is to mitigate the risk of a particular stock going south, but trashing VAG’s market value would still have a potential discernible effect on the financial status of those who invest via 401k and IRA funds, or manage pensions that hold those investments.
According to the linked article, one million tonnes is estimated to be the total annual worldwide emissions assuming the cars’ abysmal emission performance isn’t merely limited to the US. The US vehicles’ estimated annual emissions are 10,000 to 40,000 tonnes. (Actual EPA-compliant emission levels would have been about 1,000 tonnes annually.) So if they had extended it to all countries where the car was sold – which seems likely – then it wouldn’t be “orders of magnitudes worse” than one million tonnes, because it would be one million tonnes.
(If they didn’t extend it to any other countries, then you’d probably be looking at annual emissions of between 30,000 & 60,000 tonnes worldwide based on a very rough back-of-the-envelope calculation using the EPA emissions standards as an estimate. However, this seems unlikely, and I expect the worldwide emissions of 240,000 to 950,000 tonnes to be the more realistic.)
There’s "The company gets fined a bagillion dollars, stock price drops, investors lose X% of their money ", and then there’s “SHUT IT ALL DOWN, EVERYBODY NOW HAS ZERO DOLLARS” as Cory proposed, which I have a bit of a problem with. Because I disagree that it would suddenly become a disincentive for other companies to try to do the same thing… It would simply become incentive for other companies to be even sneakier, I would think, since when it comes down to it - they still are going to do their damnedest to maximize their profits at the cost of just about everything else. Or maybe that’s just the cynic in me.
I used the example of children financially suffering for the crimes of their parents. I’m not sure that you can paint investors in mutual funds as more innocent.
Woah woah woah now. While I agree that everyone who was directly involved should be investigated for criminal acts, that those doing this should be culpable and need to pay to fix the harm done; but killing the company will cause problems for all of the over 190,000 people who work there. Being forced out of your job is no good, and this action will cause problems for roughly 189,000 of those people who aren’t involved in this scandal.
Losing a job is rough, it’s always rough. Many of these people it could potentially ruin their lives if they were forced out of their jobs. This was an awful thing, and I hate the idea of “too big to fail”, but dissolving a company has real consequences for real people. Please keep that in mind.