Cooper: VW brand on the line

Some Chattanooga-made diesels Passats are among the models Volkswagen will have to recall after an emissions cheat on them was revealed by the Environmental Protective Agency.
Some Chattanooga-made diesels Passats are among the models Volkswagen will have to recall after an emissions cheat on them was revealed by the Environmental Protective Agency.

The revelation that Volkswagen intentionally used software on some of its diesel models to deceive regulators in measuring toxic emissions is deeply disappointing.

The Passat, one of the models in which the software was used, is made in Chattanooga.

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But area residents, who have seen their local and state governments pour money into the automobile manufacturer's local assembly plant, which in turn has furnished several thousands jobs, aren't the only ones reeling from the news.

Shares abroad in the carmaker's stock plunged 20 percent early Monday, their biggest ever one-day tumble.

And that came despite Sunday's apology by VW CEO Martin Winterkorn, who said he was "deeply sorry" for the breach and ordered an external investigation.

Industry comments about the scandal were, understandably, harsh.

"This is bad stuff," London-based Arndt Ellinghorst of Evercore ISI told Reuters. "It smells of lack of control, hubris and denial."

"This is not your usual recall issue, an error in calibration or even a serious safety flaw," Bernstein analysts wrote on Sunday. "There is no way to put an optimistic spin on this - this is really serious."

"This disaster is beyond all expectations," Ferdinand Dudenhoeffer, head of the Center of Automotive Research at the University of Duisburg-Essen, told Reuters.

The Environmental Protection Agency (EPA), which revealed the manufacturer's deception Friday, said VW could face fines of up to $18 billion.

The models in question, an EPA enforcement officer said, "contained software that turns off emissions controls when driving normally and turns them on when the car is undergoing an emissions test."

When they are on the road, the supposedly "clean diesel" cars emit as much as 40 times the level of pollutants currently allowed under clean air rules, the officer said.

In addition to the fines, VW will have to recall some 482,000 Audi and Volkswagen cars with the diesel engines in the model years 2009 through 2015 and, according to Winterkorn, "do whatever is necessary to reverse the damage this has caused."

Volkswagen, which recently overtook Toyota for the title of biggest carmaker by sales worldwide, already has seen a slump in its North American business. However, VW has pegged a revival in the U.S. market with the introduction of several new sport utility vehicles, including the CrossBlue, which is to be made in Chattanooga.

Locally, the carmaker, in addition to jobs, has made numerous contributions to the community since announcing it would build a plant here in 2008. Chattanoogans and car buyers around the world should expect that one of those contributions is integrity in leadership and product manufacturing, but the cheating scandal has damaged the VW brand.

We hope and expect the company's response to this crisis is so overwhelming that the company sets new industry standards for transparency and speedy, effective resolution to this punch in the gut.