Economy In Gear

Bosch agrees to pay $327 million for helping VW cheat on emissions

The German supplier has been implicated in the Volkswagen 'Dieselgate' scandal. 

A Volkswagen diesel vehicle is tested in a test facility in Ann Arbor, Mich.
Carlos Osorio/AP/File

Publicists for Bosch have been working overtime for more than a year. The German supplier has been heavily implicated in the Volkswagen Dieselgate scandal, and yesterday, it agreed to shell out $327.5 million for its role in rigging hundreds of thousands of Audi, Porsche, and VW diesels to cheat on U.S. emissions tests. 

Unlike Volkswagen's recent settlement with the federal government, Bosch's agreement doesn't require the company to admit wrongdoing. However, it's clear that Bosch was instrumental in developing the software that was ultimately installed on 11 million 2.0-liter diesels worldwide, as well as some 85,000 3.0-liter Audi, Porsche, and VW diesels in the U.S. 

Not that it was Bosch's idea. By all accounts, Audi developed an early defeat device way back in 1999. Bosch became embroiled later, in 2006, after tougher emissions guidelines were imposed by the U.S. As Volkswagen's board chair Hans Dieter Poetsch explained in December 2015, Volkswagen's engineers "could not find a way" to meet those regulations, and so, they decided to create a "workaround".

That workaround required Bosch's involvement, because Volkswagen staff didn't know how to write the necessary code. Documents show that Bosch was initially reluctant to take on the project unless Volkswagen could promise to indemnify it if/when the cheat (code name: akustikfunktion) was discovered. However, money eventually won out, and Bosch did the deed, as requested. The whole story is well worth a read--we hope Leonardo DiCaprio includes it in the Dieselgate movie

Yesterday's settlement with U.S. vehicle owners and officials still has to be approved by a judge. And of course, Bosch continues to fend off lawsuits and investigations in Europe. Stay tuned. 

This story originally appeared on The Car Connection.

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