Excepts from New York Times explaining the genesis of what fueled the VW scandal. Interesting read on
http://www.nytimes.com/2015/09/27/bu...a-scandal.html
"Volkswagen’s current crisis has its roots in decisions made almost a decade ago. In 2007, it abandoned a pollution-control technology developed by Mercedes-Benz and Bosch and instead used internal technology.
At the same time, the determination by Mr. Winterkorn, the company’s hard-charging chief executive, to surpass Toyota put enormous strain on his managers to deliver growth in America.
To capture market share, Volkswagen, which also makes such brands as Audi and Porsche, would need to build the larger cars favored by Americans. But it would also need to comply with the Obama administration’s toughening standards on mileage. All automakers developed strategies to meet the new mileage rules, and diesel was a big part of Volkswagen’s plan. But diesel engines, while offering better mileage, also emit more smog-forming pollutants than conventional engines, so Volkswagen’s strategy ran head-on into American air pollution standards, which are stricter than those in Europe.
Cheating on emissions tests solved several issues at once. Not only were drivers rewarded with better mileage and performance, but the automaker also avoided more expensive and cumbersome pollution-control systems.
In 2013, a nonprofit group, the International Council on Clean Transportation, proposed testing on-road diesel emissions from cars in the United States — something never done before.
California regulators decided to team up with the group. They had an attractive chip to offer: the state’s laboratory, where vehicles were tested for California emissions compliance.
The transportation council, staffed by a number of former E.P.A. officials, did not expect to catch Volkswagen, or anyone else, cheating. In fact, it assumed that American diesel cars would run much cleaner than their European counterparts, thanks to stricter United States emissions rules. The group felt that by promoting a success story for diesel, it could pressure — and perhaps shame — automakers in Europe into improving their own emissions.
“We thought we would be seeing some clean vehicles,” said John German, one of the project leads at the council. “That was the whole point when we started.”
It was only by chance that the group’s testing of three vehicles began with two Volkswagens. The researchers already had a BMW X5 and a Volkswagen Jetta — and then a Passat owner happened to see an ad seeking cars for the project and offered up his.
Researchers hit the road, traveling five routes with varying terrain and traffic. Almost immediately, the two Volkswagens set themselves apart from the BMW.
“If you’re idling in traffic for three hours in L.A. traffic, we know a car is not in its sweet spot for good emissions results,” said Arvind Thiruvengadam, a research professor at West Virginia University, which was hired to conduct the tests. “But when you’re going at highway speed at 70 miles an hour, everything should really work properly. The emissions should come down. But the Volkswagens’ didn’t come down.”
It was difficult to know what was going on: When the two Volkswagens were placed on a “car treadmill” known as a dynamometer, they performed flawlessly.
“It just didn’t make sense,” Mr. German said. “That was the real red flag.”
By 2014, the California regulators determined what to do next. First, they alerted their federal counterparts at the E.P.A. Then, they opened an investigation. “We brought in Volkswagen and showed them our findings,” said Stanley Young, a spokesman for the California Air Resources Board. “We asked them, ‘How do you explain this?’ ”
Volkswagen fired back. “They tried to poke holes in our study and its methods, saying we didn’t know what we were doing,” Mr. Thiruvengadam said. “They were very aggressive.”
The company offered many explanations: Weather conditions. Driving styles. Technicalities that it claimed the researchers and regulators did not understand.
“There was always some story, some reason they’d come up with each time,” Mr. Young said. “Meeting after meeting, they would try to explain it away, and we’d go back to the lab and try again. But we’d get the same results.”
The back-and-forth lasted for months. Finally, in April, Volkswagen made an offer: It would conduct a voluntary recall, or service campaign, to fix the problem in certain model year 2010 to 2014 diesel vehicles.
Regulators got the software update for their test vehicles and returned to the lab. The results were not good. “It didn’t solve the problem,” Mr. Young said.
Confronted again, Volkswagen continued to maintain that there was a problem with the testers, not the vehicles.
California regulators changed tack, examining the company’s software. Modern automobiles operate using millions of lines of computer code. One day last summer, the regulators made a startling discovery: A subroutine, or parallel set of instructions, was secretly being sent by the computer to what seemed to be the emissions controls.
Regulators were floored. Could Volkswagen be trying something similar to what the heavy-truck industry did to manipulate emissions tests in the 1990s?
Regulators set out to cheat the cheat, tweaking lab test parameters to trick the car into thinking it was on the road. The Volkswagens began spewing nitrogen oxide far above the legal limit.
……..The revelations were so stunning that some executives at Volkswagen Group of America were kept in the dark about the pending E.P.A. violation until just before it was announced, according to two people familiar with the situation who spoke on condition of anonymity.
This month, Volkswagen and Audi executives in Herndon, Va., began pressing executives in Germany for information about the delay in certifying the 2016 models for sale. The absence of details was already hampering plans for product introductions at United States dealerships.
But there was no explanation from Germany — until just before the E.P.A. announced the violation of the Clean Air Act…..
On Mr. Winterkorn’s watch, Volkswagen did become the largest automaker in the world, surpassing Toyota in July. He had two months to savor it. "