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VW, GM and Takata: the Case for Jailing Corporate Executives

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The Center for Auto Safety’s Clarence Ditlow wants executives at VW, Takata and General Motors jailed for corporate crime.

Ditlow says that the Volkswagen diesel case, for example, is one of the most egregious corporate crime cases in history.

“This is one of the most egregious corporate crimes I have ever seen,” Ditlow said on the Ralph Nader Radio Hour last week. “When the Environmental Protection Agency set tough new standards for diesel engines, Volkswagen quickly discovered that its technology wouldn’t meet the new standards. But, what they did is, instead of sending their engineers to work, designing a new system to clean up the diesel, they sent their engineers to work developing a computer program that would instruct the diesel engine to only work the emission controls during the test procedure. And, when the diesel is out in the real world on the highway, to turn off the emission controls. So, in order to do this you have to have engineers who deliberately programmed into the computer system a cheat device, which would turn off the emission controls. Clear knowledge. Clear intent. And they got caught.”

Ditlow said that “in the U.S. there are nearly 500,000 of these diesels with the cheat devices on them.”

“Across the world there are many millions, as many as 11 million vehicles in every country, polluting the atmosphere, causing adverse health effects. And, one study here in the U.S. said that there be as many as 60 deaths due to this corporate crime by Volkswagen.”

“I mean, we’re not talking about a petty crime here. What we’re talking about is a gross corporate crime. These diesels emit up to 40 times the amount of emissions that they are allowed to. And, it’s very fine particulates that are coming out of the diesel. It’s nitrogen oxides. And, it’s going into the lungs of individuals, and if you’re particularly sensitive you are quite likely to suffer disease and illness and ultimately death.”

“The government in the U.S. the government throughout Europe and the rest of the world should hit the Volkswagen over the head and send the responsible executives to jail,” Ditlow said. “This is not something that a rogue engineer did. This is something that management approved, because, you cannot sell a car unless you get it certified by EPA.

And, top management always looks at that. Because, if it can’t sell the car, you’re not going to make money. And, the way they made money this time was they cheated.

“If justice prevails there will be criminal penalties for all the Volkswagen engineers and management involved in this deception. But, the Justice Department has already filed a complaint. They’re only asking for civil penalties. The penalty is $37,500 per car on cap, which could be as much as 20 billion dollars. The only thing that’s fully clear is going to cost Volkswagen billions of dollars to get out. But, that’s an injustice in itself. Because, you shouldn’t be able to take out the corporate checkbook and say, ‘How big do you want this check to be to keep our executives out of jail?’”

Ditlow called the GM ignition switch case “a corporate crime too big to punish.”

“In 2001, General Motors was about to introduce the new Saturn Ion and then the Chevrolet Cobalt,” Ditlow said. “And, they wanted to design a new ignition system for that vehicle. And, the engineers came up with two designs. One that was reliable and safe but cost a few pennies more. And, one that cost a few pennies less but wasn’t reliable and wasn’t safe, because, it would turn off the ignition as you were driving down the road, hit a pothole and the key could joggle to the off position. Your knee could hit it and the key would go to the off position.”

“And, it wasn’t enough that just the engine was turned off the power steering was turned off. And, if you should hit an object the airbag was turned off. So, there have been, admitted by GM, at least 174 deaths to date due to this defect. The Center for Auto Safety believes that the true death count is at least twice that, well over 300 deaths. Management claimed they didn’t know about it until 2014. But, their lawyers were approving settlements for up to 5 million dollars in many of the lawsuits that were filed against the company. So, it’s very difficult to believe that once again management didn’t know about it, that it was some rogue engineer who came up with this design.”

“Once again, GM took out the corporate checkbook and said — How big a check do you want us to write to keep our executives out of jail?,” Ditlow said. “So, on Wall Street it was the banks were too big to fail. At GM, the corporation and the executives were too big to jail. It’s a corporate crime that went unpunished. A peanut butter manufacturer, who caused a few deaths, that individual the CEO is in jail. At GM nobody went to jail. That, in itself, is an injustice.”

Ditlow also wants to see Takata executives in jail for the airbag defect.

“Just take a look at Takata’s actions,” Ditlow said. “Up through the year 2000 almost every airbag inflator made worldwide, including by Takata, used sodium azide as a propellant. Very stable. If it broke down it just simply degraded and there was no adverse effects. If you had to replace it, you had to replace it. But, what Takata did in the beginning of 2001 was to change the propellant to ammonium nitrate, an incredibly powerful explosive. It’s what Terry McVeigh used to bring down the government office building in Oklahoma City. It’s what a lot of terrorists in the Mideast are using in the improvised explosive devises. And so, yet this propellant that Takata used, it was known to degrade, known to explode, they put it into the airbag inflator to save, once again, a few pennies per inflator. And so, they knew immediately, once these inflators were put into production that they were failing, they were exploding, and when they exploded they sent the shrapnel of the housing into the occupant compartment. And, if you’re behind the steering wheel and you had no other choice at that time, you are very likely to be killed or seriously injured.”

“The government investigated in 2009 and Takata said — Ohhh, we had one plant that wasn’t working well with the machinery. We had another plant that had moisture in it. And, so, we’re going to recall those and nothing else is wrong with it. And, it literally took 10 more years, really, to get the defect fully acknowledged. And, Takata should, you know, once again, have their executives who made these decisions sent to jail.”

Ditlow said that fewer than 30 percent of the nearly 30 million inflators that need to be replaced have been replaced.

“We have consumers who are afraid to drive their cars, because they can’t get a replacement inflator for them,” Ditlow said. “What needs to be done is to not only go to three shifts a day, seven days a week but go to additional suppliers. And, the government is just willing to, once again, impose civil penalties and not issue manufacturing orders, which they have the authority to do to force Takata and the auto companies to get a additional inflators and get this recall done in six months, not three years.”

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Russell Mokhiber is the editor of the Corporate Crime Reporter..

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