Watching the Detectives

A friend of mine works for a large national testing lab in the U.S. Recently he put an account on heightened surveillance because he discovered the account was falsifying paperwork and misusing the certification marks in violation of their licensing agreement.

Upset at the sanction, the account took its business to a competitor. This, alone, is not a big deal. Companies win and lose accounts every day, but it highlighted the risk the testing lab faced in pressuring a customer to comply with inspection standards – business can be lost.

A short time later, the account returned to my friend’s lab but asked to be taken off of heightened surveillance as a new account. That could not be arranged. Then two strange things happened.

First, the owner of the company complained to my friend’s boss claiming that my friend was trying to extort his company by failing his inspections. And, second, the account had a female employee visit my friend and then later claim that sexual favors were sought in exchange for an inspection approval.

My friend’s employer did not immediately notify him of these direct customer complaints. And now, with two complaints, including a serious sexual allegation in play, my friend has become the suspect – rather than the rule-breaking account executive – in spite of a spotless decades-long history with the company.

This sordid tale, still playing out as I write these words, comes to mind in the context of the Volkswagen emissions cheating scandal now unfolding around the world and seemingly threatening the long-term viability of Volkswagen and the future use of diesel engines in passenger vehicles.

Rules were made to be broken and where you have inspectors you will find fraud and efforts to defeat inspections. Whether you are talking about buildings or cars or consumer products, fraud can take the form of hardware or software hacks, bribes, extortion, intimidation or simple deception.

The Volkswagen violation has opened a window on an entire industry devoted to defeating or evading emissions tests. In the automotive industry, from the OEMs to the aftermarket, the industry supports and even occasionally celebrates a broad-based culture of cheating.

Live driving tests of diesel vehicles from multiple car makers have been shown, in multiple regions and various driving conditions, to fail emissions tests. The Volkswagen tests in the U.S. were actually intended to better understand the secret sauce behind Volkswagen’s clean diesel. Unfortunately, there was an entirely different secret at work.

But the inspections are only as good as the oversight of the inspectors is reliable or, similarly, only as good as the degree of determination of those inspectors and their isolation from potential sources of corruption. Food, houses, electrical systems, these are all subject to inspection.

Further complicating the inspection process are competitive pressures and differing standards and testing equipment. The U.S. is itself a patchwork quilt of states some of which do and some of which do not test emissions.

In the wake of Volkswagen’s violation, emissions testing regimes throughout the world are being re-evaluated. There may be no substitute for a live driving test with sampling from the tailpipe even for gasoline-fueled cars.

Adding to the problem is the public perception that emissions are not that big a deal. Volkswagen Group of North America President Michael Horn captured this thinking in comments before a Congressional Committee last week:

“If you look at 100% of nitrous oxide emissions in the U.S. the car and truck industry is (contributing) 5%. Our group here in the U.S. has 4% of the 5%, which is .2%, and out of this 20% is TDI which is .05%,” he said. Then, as if suddenly realizing what he was suggesting he added: “Which is not belittling this and it is clearly unacceptable.”

Those words represented one of the few missteps in Herr Horn’s testimony before Congress. One has the sense that he simply couldn’t control himself. He desperately wanted to get those tiny percentages on the record, even if he sounded callous in the process.

He captured, with those words, the sentiments of many inside and outside the industry. The data suggests that the collective emissions impact of Volkswagen’s diesel vehicles is trivial …except for the fact that estimates place the number of deaths indirectly attributable to those emissions is approximately 150.

It is likely that Volkswagen will ultimately survive the shame and humiliation of this emissions cheating crisis, but diesel engines in passenger cars have suffered a black eye from which recovery will be impossible. The latest news from Volkswagen is that the company is laying plans to introduce electric vehicles.

As for my friend, he is keeping a stiff upper lip. He is also recording all of his conversations with clients and management and he has contacted an attorney. It’s not easy being an inspector, but someone has to do it. As a society we are all counting on that.