The scandal over Volkwagen’s illegal scheme to sell diesel vehicles equipped with software designed to cheat US air pollution limits is widening.
The estimated number of affected vehicles was upped this week from almost 500,000 sold in the US since 2008 to 11 million worldwide. Both the US Environmental Protection Agency and the Justice Department have launched investigations of the German automaker, and hearings are being planned by the US House Oversight and Investigations Subcommittee and the Tennessee legislature. Germany’s transit ministry is investigating, and officials in France, Italy and South Korea are also looking into the matter.
Volkswagen could reportedly face a fine of as much as $18 billion as well as criminal charges. The company’s stock price fell 31 percent over two days amid a sell-off, and on Wednesday its CEO resigned.
Meanwhile, anger is growing over the scandal in Tennessee, where taxpayers in the state with the nation’s 11th highest poverty rate have spent hundreds of millions of dollars on incentives to lure and keep a $1 billion Volkswagen plant in Chattanooga. The plant makes the Passat, one of the four-cylinder diesel models found to have the cheating software. The other affected models, all with the same engine, are the Audi A3, Beetle, Golf and Jetta.
On Monday, Tennessee Gov. Bill Haslam (R) said he was “very concerned” about the cheating revelations, which he first learned about in a courtesy call from EPA head Gina McCarthy late last week before the agency’s public announcement. Tennessee Lt. Gov. Ron Ramsey (R) called the news “depressing” and “hard to believe.”
“We’ve made a huge investment,” Ramsey noted.
How huge, exactly?
* In 2008, VW got $577 million in incentives from federal, state and local governments to open the plant in Chattanooga, which now employs more than 3,200 people.
* Last year, state and local governments offered VW incentives valued at $230 million to expand its operations in Chattanooga rather than Puebla, Mexico, the site of the company’s other major North American auto plant. Combined with other tax breaks, credits and incentives, the package could add up to more than $300 million over the next decade.
* Earlier this month, Tennessee’s State Building Commission approved $168 million in state incentives to help VW add SUV production at its Chattanooga plant. The expansion is expected to add about 2,000 workers.
“I am very concerned as to the financial impact these violations could present to the state of Tennessee,” state Sen. Bo Watson (R), who has criticized VW as a “magnet for organized labor,” wrote in a letter to the state Senate Finance Committee chair. “Any action that threatens the stability and sustainability of the investment should be reviewed by the finance committee, without delay.”
The state portion of the latest incentive package would be subject to a “clawback provision” if VW fails to meet its spending and hiring goals at the Chattanooga plant, The Commercial Appeal reports. But the original incentive package given to VW is not subject to such a provision.
Help us Prepare for Trump’s Day One
Trump is busy getting ready for Day One of his presidency – but so is Truthout.
Trump has made it no secret that he is planning a demolition-style attack on both specific communities and democracy as a whole, beginning on his first day in office. With over 25 executive orders and directives queued up for January 20, he’s promised to “launch the largest deportation program in American history,” roll back anti-discrimination protections for transgender students, and implement a “drill, drill, drill” approach to ramp up oil and gas extraction.
Organizations like Truthout are also being threatened by legislation like HR 9495, the “nonprofit killer bill” that would allow the Treasury Secretary to declare any nonprofit a “terrorist-supporting organization” and strip its tax-exempt status without due process. Progressive media like Truthout that has courageously focused on reporting on Israel’s genocide in Gaza are in the bill’s crosshairs.
As journalists, we have a responsibility to look at hard realities and communicate them to you. We hope that you, like us, can use this information to prepare for what’s to come.
And if you feel uncertain about what to do in the face of a second Trump administration, we invite you to be an indispensable part of Truthout’s preparations.
In addition to covering the widespread onslaught of draconian policy, we’re shoring up our resources for what might come next for progressive media: bad-faith lawsuits from far-right ghouls, legislation that seeks to strip us of our ability to receive tax-deductible donations, and further throttling of our reach on social media platforms owned by Trump’s sycophants.
We’re preparing right now for Trump’s Day One: building a brave coalition of movement media; reaching out to the activists, academics, and thinkers we trust to shine a light on the inner workings of authoritarianism; and planning to use journalism as a tool to equip movements to protect the people, lands, and principles most vulnerable to Trump’s destruction.
We’re asking all of our readers to start a monthly donation or make a one-time donation – as a commitment to stand with us on day one of Trump’s presidency, and every day after that, as we produce journalism that combats authoritarianism, censorship, injustice, and misinformation. You’re an essential part of our future – please join the movement by making a tax-deductible donation today.
If you have the means to make a substantial gift, please dig deep during this critical time!
With gratitude and resolve,
Maya, Negin, Saima, and Ziggy