If you read the Civil Action they have 15 reasons for the jurisdiction, some of them are pretty boilerplate commerce ones, but several of them point out that it was specifically Volkswagon’s Auborn Hills Michigan office that was interacting with the EPA’s Office of Transportation and Air Quality which is in Ann Arbor Michigan.
I am sure that they are not unhappy to be bringing the complaint forward in Michigan, but it’s not comically blatantly political, it’s pretty sensible given the fact the location of the offices.
Well, sure. There’s always legit reasons to bring an action somewhere (there have to be, or it gets thrown out). But in the same way that securities fraud suits are brought in Connecticut if it’s at all possible, because it’s more friendly to investors than New York or London, there’s a practical reason this is being brought in Michigan rather than, say, DC, or Virginia where VW has its US HQ, or Tennessee where its factory is.
I’m not sure how much location matters any more, given that all cars are made with internationally sourced parts and often in factories far removed from their nominal homes. Hell, probably most of the “imports” sold in the US are made here in US factories by US workers–and if nominally domestic, they’re made in places like Mexico for companies like Ford. But I agree there’s some emotional resonance left I guess.
Oh, huh. It’s not $20bn. It’s more than double that. There are two separate claims for up to $37,500 per car (plus a smaller claim). That’s considerably more solvency-threatening, though in practice it’s a worst case number and they’d likely fight it for several years giving them some time to put together the money. Arguably the bigger issue is that they clearly have a toxic relationship with the regulators. The post-initial disclosure back and forth has been surprisingly hostile, and VW have been very slow to provide material information about what actually happened. The big investor briefing they did at the end of last year was pretty pathetic in terms of details. And that’s going to translate into political opposition and (even more) consumer opposition. They should be grovelling at this point, but it’s looking like they’ve basically lost the American market for a generation, at least as a material profit centre.
This is really ugly, for a lot of reasons. Selfishly, the GTI is about the best example of the niche of automobile that I prefer to inhabit (barring an infusion of wealth allowing me to jump up a notch or two), that is, performance-oriented, small, manual-transmission cars with front or all-wheel drive. Where I live, I can’t really have a RWD vehicle, unless I could afford two cars for myself, which I can’t. The GTI (I own a '12 at the moment) is far and away the best quality/performance/utility balance in this segment, a segment where the choices in the USA have been steadily diminishing. If VW’s woes translate into instability, less R&D, corner cutting, shrinking dealer network, or contracting market share, I’m worried even the GTI will become an endangered species. Without it, the choices are Ford’s ST (Focus and Fiesta, the former a bit cruder and the latter a bit too “boy racer”), the WRX (too expensive for what you get, questionable shifter and interior, seem to be the province of twenty-something slackers with backwards-facing ball caps exclusively, though the car does drive well enough), and the MINI (grossly overpriced and not nearly as refined as it should be for what they charge). Honda should have a new Si “sometime” soon-ish, but it’s not really known how that will shake out, and the previous generation did not leave a good taste in anyone’s mouth. A Mazdaspeed 3 is also possibly “on the horizon,” but little is known. The Civic R and Focus RS are coming, but pricing looks, for the Ford at least, north of 40k with options you want, and from what the dealer told me, if you haven’t bought yours a year in advance you’re not getting one.
VW needs to stay viable in this niche to keep the niche going, as the GTI forces everyone to up their game in terms of overall feel, quality of materials, and performance. If these legal issues hurt them, I worry that niche products (in the US at least) like the GTI will be the first to go.
VW of America sales in December seem to be all over the shop, but GTi is actually up year on year, remarkably. But Golf, Passat and Beetle are way down.
Not that surprising, maybe, given what I was talking about–the GTI is pretty much king of its niche. It’s a small niche in the USA, but big fish/small pond, I guess. There are tons of competitors for VW’s other vehicles, but the GTI doesn’t have that many challengers.
I’m just worried in general, though, as Audi and BMW, for instance, have been seriously paring down their manual transmission offerings. You can’t get an all-wheel drive version of the M235i, for instance, in a manual, only the RWD, and BMW has more manual options than most nowadays. The 2016 Audi S4 has a manual offering, but rumor has it the 2017 will not. As the upscale models often determine the downstream trends–and as, technically, modern automatics are arguable better in automotive/performance statistics and real-world numbers–the trend is definitely away from the shift yourself option.
Intellectually, I realize that a modern DSG or other hotshot slushbox is objectively better than a six speed manual, and often more so as cars are being designed for the former and not the latter, but I’ve driven a stick for the last thirty years and the two years I took off with a (very nice seven-speed automatic) only drove home for me that I need that clutch pedal to make me feel at home in the car. Given that I can’t own a RWD car, though, increasingly it’s harder to find nice options. Before, there were plenty at the high end, even if out of my price range, but now even that segment is dying.
Couldn’t VW just refuse to comply and withdraw from the US market instead? I suppose the US govt could pursue then overseas but that would be a harder thing.
I mean just from a practical POV, if it’s a choice between insolvency and losing the US…
They might as well liquidate if they did that. Not necessarily from a global revenue perspective, but as a rogue multinational based in Europe. Even if the US couldn’t pursue them (which they probably could) I bet the Germans would put them in receivership if they tried it.
I’m not sure they could survive as a global car company–and that’s what they are and position themselves as–without the US market. It would shatter investor confidence perhaps worse than actual financial blows. But I’m no financial analyst, who knows?
That makes intuitive sense: afficionados are still interested in the GTI, but the general public is less enthusiastic about the brand.
“All over the shop” is right. Sales of the Tiguan compact SUV were way up, too. That category is up across the whole industry, but not 42%. Weird. Were they selling them at a loss or something?
I’m due to replace my '08 Wolfsburg in the next year or two. I like it a lot, but I’ll be looking at Honda/Acura first. Maybe by then they’ll come up with something I actually want to drive every day.
I’m guessing the Tiguan appealed to the sport/performance SUV niche, which at that price point is grossly underserved. But that’s a guess; the car is not that good looking and IMO a bit overpriced for the segment.
I’ve had two Acuras, a 1987 Integra RS and and a 1999 Integra GS-R. Both were fabulous cars, but they no longer make anything remotely like them, and you can’t get a manual tranny in an Acura at all I don’t think. I loved the GS-R in particular, but it was one of only two cars I ever leased (never again!) and I couldn’t keep it. We just sold our CR-V, after 108,000 miles and twelve years. Great vehicle, boring as hell, like pretty much most of Honda’s line up. The big-ish Accord coupe is nice but, well, big, and the new Si–whenever it gets here–should be nifty, as should the fabled R, but since they ditched the S2000 nothing they’ve sold has really rattled my cage.
Yeah, I’m not too optimistic. Acura hasn’t offered a stick shift for years, and there’s always something about the Civic Si that just doesn’t fit. I drove the much-maligned '04 Si hatchback for several years—liked the hatch, loved the dash-mounted shifter—but power and handling were both sub-par.
It did know what to do when it was t-boned by an inattentive teenage redneck in a rebuilt '84 pick-up, though.
Freakin’ Honda. They’re all either definition-of-boring people-movers or plastic boy-racer Transformers with moronic Knight Rider digital speedos. I’ve never not been too old for that. CLONE ME A BMW, dammit!
I’ve actually come to love my digital speed read out in my GTI. Yeah, the main speedo is good old fashioned analog, but the middle MFI shows a number, and as I get older, that registers more easily I guess. I like having both.
Supposedly the new Si is going to be very nice, with a turbo, and a lot more aggressiveness. But I agree, while it’s a great marque in many ways Honda in the USA has a lineup that is becoming or has become as boring as Toyota’s–and that’s pretty damned boring.
Acura used to be a Japanese BMW in many ways but even BMW has moved to the luxury side of the equation more than anything else. Up here where I live the most popular Bimmers are xDrive AWD versions of the 3-series, driven by people who have zero interest in recreational driving but a lot of status anxiety.
Except there, too, you can’t get AWD with a manual. You can get a manual in the coupe, but only in RWD. Which is my problem with BMW too (that and, um, money); I can’t have a rear-wheel drive in a place where you put on snow tires in November and keep them on until April, and where it’s hilly as hell and the roads suck balls.
BMW most definitely has AWD options with a manual transmission. I admit the cost is a nuisance, which is why I buy used ones to let someone else eat the first 10k of depreciation.
I’m thinking of this bit from the last article: Finally, US officials are demanding "up to $32,500 per day of violation occurring before January 13, 2009, and up to $37,500 per day of violation occurring on or after January 13, 2009 for violations of Section 203(a)(2) of the [Clean Air] Act.
If that $37,500 is per day until they resolve the problem for every violating vehicle in the US then that whole “offering a new car at discount” idea seems like it is for total suckers, right? Eventually it’s going to be more economical for VW just to fix your car or give you a new one unless the Justice department thinks offering customers a coupon is a good faith solution.
Eh, maybe that penalty is only up to a certain date (filing date?), but it does seem like the sort of thing you would leave to dangle over a company’s head until they fixed the problem. Is that how things usually work? Keeping accumulating fines until the mess gets cleaned up so people don’t drag their feet?
