Volkswagen Pleads Guilty, FCA Accused of Cheating

A short time ago, Volkswagen executives in Germany were warned about travel to the United States. Doing so could result in arrest for criminal charges stemming from the company’s massive defrauding of the U.S. government.

Perhaps Oliver Schmidt, the former head of VW’s environmental engineering office in charge of communicating with U.S. regulators, didn’t get the memo.

The FBI pounced when Schmidt was in Miami, arresting him to face criminal charges over doctored diesel engines in more than 500,000 cars, which emitted up to 40 times the limit for nitrogen oxide under U.S. pollution standards.

Volkswagen has pleaded guilty to three felony charges and now the EPA has accused another automaker of a similar cheating scheme.

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EPA Asks Volkswagen to Build Electric Cars

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Volkswagen is like the kid who got caught lying to his parents.

When a kid lies, his parents may punish him by taking away his allowance, making him apologize, and possibly making him pay back the people to whom he lied.

If those punishments don’t work, or if the lie was particularly heinous, a parent might ask his or her child to contribute to solving the problem that caused the lie in the first place.

We all know that VW got caught lying to the government (and its customers) by using technology to cheat emissions tests on nearly 600,000 cars. We’re about five months into the scandal and there still isn’t a plan in place to compensate customers or fix the affected vehicles. Volkswagen will undoubtedly be fined billions of dollars for the lie and face lawsuits, but now the U.S. government has also asked the carmaker to go a step further and build cars that make lying about emissions impossible.

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Volkswagen Sued by the United States

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I can’t imagine anything much scarier than finding out your business is being sued by the United States of America.

Of course, to avoid that from happening, all you have to do is play by the rules and not intentionally deceive the government while taking home millions of dollars in profit. Pretty easy, right?

Volkswagen is learning that lesson the hard way. The U.S. Department of Justice has filed suit against the automaker over the emissions scandal that saw the German car giant install software in hundreds of thousands of cars to cheat emissions tests.

The allegations in the lawsuit, which accuse Volkswagen of intentionally violating the Clean Air Act by installing illegal devices to impair emission control systems in 600,000 vehicles, carries penalties that could cost Volkswagen billions of dollars. Yes, the wrath of the U.S. government will finally rain down on VW.

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Now’s the Best Time to Buy… a Volkswagen?

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All automakers in September saw their average transaction price increase.

Well, all but one.

Volkswagen is the only major automaker to see its average transaction price drop in the month of September. This could be just the beginning of the fallout of its diesel scandal, but it could also mean good deals for savvy shoppers.

There’s no question that Volkswagen is now in a full-blown crisis situation. In fact, one prominent VW exec illustrated just how bad things are by saying he thinks his company could pay the ultimate price:

Volkswagen AG’s designated Chairman Hans Dieter Poetsch warned managers that the diesel-emissions scandal could pose “an existence-threatening crisis for the company.”

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