All language subtitles for Dirty.Money.2018.S01E01.Hard.NOx.1080p.NF.WEB-DL.DD5.1.H.264-SiGMA_track4_[eng]

[vehicle approaching]

[indistinct chatter on radio]

[Alex Gibney] I thought I had found
the perfect car.

The VW Diesel Jetta Wagon.
The ad sucked me in.

[announcer 1] Volkswagen has more
diesel cars on the road in the US

than every other brand combined.

[announcer 2] Boasting a two-liter
TDI turbo-charged clean diesel engine,

not only does it provide
excellent fuel economy,

but you'll love the performance, too.

[Gibney] It was the only car
that seemed to have it all.

Drove like a sports car...

Can the Green Car of the Year be fast?

[Gibney] Wasn't too expensive,
got great mileage,

and unlike diesels of the past,
it was clean.

[man 1] Volkswagen Jetta
TDI Clean Diesel.

[man 2] TDI Clean Diesel.

[woman 1] TDI Clean Diesel.

[Gibney] I was beaming with pride
as I drove around the suburbs

or commuted to New York City.

What I didn't know was
that I was driving a killing machine.

[man 3] What has VW been up to?

[man 4] We may be looking at
the largest systematic corporate fraud

in the history of the global corporation.

[man 5] Volkswagen has admitted
that their clean diesel cars

have been systematically, proactively
engineered to deceive emissions testing.

[man 6] It's called a defeat device.
It's designed to defeat the test.

[woman 2] The Volkswagen scandal
is widening.

[man 7] The news just keeps getting worse.

[man 8] VW share price down 31%.

[man 3] If you're a VW shareholder
or employee today,

the letters stand for Very Worried.

[Sally Yates] Volkswagen turned
over half a million American drivers

into unwitting accomplices
in an unprecedented assault

on our country's environment.

Our criminal investigation is active
and ongoing.

[brakes screeching]

[theme music playing]

[Yates] We can't undo the damage

that Volkswagen caused
to our air quality.

But what we can do is offset that damage
by reducing pollution from future sources.

Now, with respect to the agreement,
more specifically,

Volkswagen must offer to buy back
any car that's on the road.

That's nearly 500,000 two-liter
diesel vehicles

that are model years 2009 through 2015.

As part of the buyback, Volkswagen...

[Gibney] When I first heard
about the scandal, I was furious.

VW had lied to me.

They had pitched me
a vision of my dream car,

but sold me my worst nightmare.

A car that was polluting 50 times more
than advertised.

[Zoe Chace] It's not enough for VW
to just apologize.

They gotta use their folly
to actively make the world better.

Even before that, Kirk suggests...

[Gibney] Weirdly, I was listening to NPR
when my own name came up

in an interview with a PR expert,
on how VW could make things right.

[Kirk Souder] ...an investigative
documentarian group,

like a Frontline or an Alex Gibney,

who can come in
with the charge of discovering

what happens in a company

that actually leads
to this type of gross infraction.

[Chace] Kirk went ahead and made a promo
for this imaginary documentary.

[announcer] A new series
from Alex Gibney, the director of

The Smartest Guys in the Room,
Coming Clean: Inside Volkswagen.

Fuck Volkswagen.

[announcer] With unprecedented
and unlimited access from Volkswagen...

[Gibney] There was no way VW
was gonna give me access

to look at the scandal,
but the promo did get me worked up.

Angry as I was, it didn't begin
to describe the fury my wife felt.

She stopped driving the car entirely.

Though she had pasted "namaste"
on our bumper sticker,

a yoga term for
"bowing to the divine in others,"

she had visions of marching in

to the local VW dealership
with a chainsaw.

-[man] And the number.
-[Anne Gibney] Yes.

[man] These two documents...

-[Anne] Okay, so I sign right...
-[man] Seller signature.

Yep. There we go.
We're going to give you back the car.

I feel so badly because I love the car...

[man] Yeah.

[Anne] Um, but when you feel
you've been lied to,

it's really hard to feel okay
about the company, in general.

Sort of like, shame on you, Volkswagen.

-Yeah.
-Right?

[Gibney] Exactly.

[Gibney] Okay, my wife is way too nice
to think about killing the local dealers.

But she wanted the car out of our lives.

The question she was asking,
and I was, too,

was, "How could this have happened?

How could a company have lied
to its customers on such a massive scale?"

I decided to look into the scandal.

What I would discover was much darker

and more vast than anything
I had imagined.

[in German] I am pleased
that at the skilled hands

of a brilliant design engineer
and his staff,

preliminary designs for a German
Volkswagen have been completed,

and the first models will finally be
tested by the middle of the year.

Then you will understand why I was
utterly determined to lay the groundwork

for the invention of the German Volkswagen
and its ultimate conclusion,

and by that, dear gentlemen,
I mean a successful conclusion!

[Gibney in English] Okay, it's usually
a cheap shot to bring up Hitler,

but when it came to VW,

he's the man that jump-started the company
back in the 1930s.

[Jack Ewing] In the 1930s,

cars were still a rarity in Germany,
or relatively rare.

It wasn't something that most people had.

And in the United States, a lot of people
think Henry Ford invented the car

but he didn't, actually.
What he did invent was

how to build cars cheaply
that everybody could afford.

So in the United States,

there was far more middle-class people
who had automobiles than in Germany.

And that really bothered the Germans
and the Nazis, in particular,

because they were supposed to be superior.

So Hitler hooked up
with Ferdinand Porsche.

Porsche already had some designs
in his drawer.

This idea of a volkswagen, a people's car,
had been kicking around for quite a while.

And then he started developing the car
with Nazi money.

Porsche, himself, went to Ford

and looked around on several occasions.

He hired Germans
who were working at Ford, émigrés.

He brought them back to Germany
to help build the Volkswagen factory.

And it was very consciously
modeled on Ford,

but it was supposed to be even bigger.

They wanted it to be
the biggest factory in the world,

which it eventually became.

[reporter] There was
a celebration in Germany,

to mark the one millionth people's car
since the war.

Over 150,000 people were present
to take part in the jollification.

This included a...

[Ewing] The city of Wolfsburg,

it just doesn't get any more
"company town" than that.

There was nothing there
until they built the Volkswagen factory.

Everything that you see in Wolfsburg today

has really grown up
around that original factory.

[Walter Groth] Okay, so, here,
that's the main street in Wolfsburg.

[Gibney] So there was nothing here?

[Groth] Wolfsburg, as a city,
didn't exist.

[Gibney] It's a massive factory.

[Groth] It's a massive factory.

Nowadays, they are still employing
60,000 people.

[Gibney] Really?

[Groth] And the chimneys
you see over there,

-that's actually the paint shop.
-[Gibney] Uh-huh.

So, this is all employee housing in here?

Yeah. Basically everyone works, uh,

either directly or at least indirectly
for Volkswagen here.

How does it rank in terms of
the largest factories in the world?

-It's the largest one.
-It is.

There's no other factory, uh...

Right now, they are producing by day,

-round about between 3,000 to 3,500 cars.
-Wow.

[Gibney] VW declined
to give us a tour of Wolfsburg.

So, I sought out the help of Walter Groth,

a consultant on corporate culture,

who'd worked for 20 years
as an executive for Volkswagen.

You'd been at Volkswagen for a long time.

Twenty-four years.

[Gibney] When the news broke
about the cheating scandal,

what was your reaction?

My reaction, uh...
I was angry, actually. I was angry.

[stammering] I took that
very personal because, uh,

I was thinking about all the people
working for the brand

and really doing the hard work.

And when you imagine
that this is a company

with more than 600,000 people
working for Volkswagen worldwide,

and more than a hundred factories,

and you have to run this operation...
And all these people,

when you look at the production lines,
at manufacturing, what they do...

When you look at the people
developing a car,

starting with the designers, for example,

they all want to come up
with the best product possible.

[Gibney] For VW,
the road to global dominance

had always led through America.

In the '60s, sales hit new highs,

when VW flew the freak flag
for the counterculture.

The Bug was a real people's car,
mechanically simple and down-to-earth.

You could be high on mescaline

and still shift gears
or repair the engine.

And the Bus was a crash pad on wheels.

[Ewing] It was an amazing case
of rebranding

because this car was basically
designed for Hitler. [chuckles]

Then after the war, it becomes
the symbol of the counterculture.

[all laughing]

[Gibney] But VW didn't keep up
with the times.

As the counterculture
gave way to the Reagan era,

VW didn't innovate and its sales dropped
as fast as the quality of its cars.

[Groth] During all these years,
sales went down, losses were mounting.

Volkswagen was close to being insolvent.

I was asked to join the newly-formed, uh,
North American region

because we needed to do a turnaround
of the Volkswagen of America.

In 1993, Volkswagen sold roughly
38,000 cars a year in the United States.

That's a market with 16-17 million cars.
So 38,000 is, uh, ridiculous. [chuckles]

And, uh, you have to remember the times
when Volkswagen in the United States,

with the Beetle,
sold almost half a million cars.

[Gibney] The savior for VW
was Ferdinand Piëch.

The grandson of Ferdinand Porsche,

Piëch was professionally
and personally productive.

He sired 12 children
with four different women.

He also infused VW with a new DNA.

[in German] Whenever there is war,
fewer remain in the end.

There are always winners and losers.

And I intend...

along with our VW partners
around the world...

to emerge victorious.

Yeah, a little faster is more fun.

[Bertel Schmitt in English]
Piëch, he was the head of Audi before.

He's a brilliant man.

[stammers] It's brilliant,
but it's dangerous, okay? Kind of.

I mean, Piëch was a tough guy
and he knew what he was doing.

[in German] I don't feel
I can't communicate with others.

But there are individuals with whom
I don't want to communicate.

And they complain
about my lack of communication.

However, that's not unintentional.

[Schmitt in English] When Piëch started,
Volkswagen was down and out.

They were just about bankrupt
and their quality sucked.

It was a disaster.
Their value at the time was a disaster.

The average, uh, workshop visit
of an average car

was three to four times in the first year.

He had to turn the company around.
And it's tough.

[Groth] Dr. Piëch came just in time
to make that happen.

Before him,
Volkswagen was rather thinking small,

and with Piëch,
the big thinking really started.

Piëch, uh, he's the typical inventor.
He has the big product ideas.

He comes up with stuff that's just, uh...
Wow.

Where did he get that from?

[Schmitt] He has this idea of diesel.

[stammers] At the time,
diesels were something for tractors.

Maybe for, uh, big Mercedes.

And he said, "It's going to be diesel."

He made the diesel smaller, invented TDI.
People, they loved it.

[Gibney] The new TDI. It arrived
with a hip new ad campaign.

A diesel that was fun to drive,
powerful and clean.

[Groth] Volkswagen had huge success
with TDI engines.

In Europe,
people started to love the diesel.

But there was always the problem

that what comes out from the exhaust,
um... Not really healthy.

[Gibney] The basics of diesel
and gas engines are the same.

A series of explosions move the pistons,
which turn the drive shaft.

Diesel fuel is much more efficient
than gas

and produces much less carbon dioxide.

But diesel fuel exhaust
disgorges much nastier stuff.

Particulate matter and nitrogen oxide,
called NOx,

that causes air pollution
and damages human lungs.

This is personal for me.

When my family was living

in the NOx-filled smog
of Southern California,

my daughter developed
exercise-induced asthma.

When she was playing soccer
in high school,

she collapsed in front of me
from lack of oxygen.

[Gibney] NOx is not good.

[stutters] No. NOx, nitrogen oxide,
is very, uh, nasty stuff.

Elements of nitrogen oxides
mix with ozone,

and then chemically changes into
what we call smog.

It's a factor in acid rain.
It's damaging for plant life.

It causes asthma in children,
causes cardiac problems, cancer.

People will die prematurely.

[motor whirring]

[Gibney] To keep the efficiency of diesel,
but to cut down on NOx,

manufacturers like VW
tried to create NOx traps

that caught and burned the stuff
before it left the tailpipe.

But the special parts needed
were expensive,

and had to be replaced
every few thousand miles.

Yet, they were the only way to meet

the NOx pollution standards set in the US,

which were much more strict
than in Europe.

[George W. Bush]
Today, I'm directing the EPA

and the Department of Transportation,
Energy and Agriculture

to take the first steps
towards regulations

that would cut gasoline consumption
and greenhouse gas emissions

for motor vehicles.

We have set in motion a national policy

aimed at both increasing gas mileage
and decreasing greenhouse gas pollution

for all new trucks and cars
sold in the United States of America.

[Gibney] Solving that problem in the US
was critical

for the strategy of the man who would
eventually be tapped to follow Piëch

as the head of VW, Martin Winterkorn.

[Martin Winterkorn in German]
Dr. Piëch and I

have been working together
for almost 30 years.

And as you know, Dr. Piëch has always
regarded innovation as the top priority.

So, we agreed that he would focus
on innovation and I would safeguard it.

[in English] Winterkorn came and they did
this strategy called Strategy 2018.

[in German] We wanted to have
the most satisfied customers.

We wanted to have
the most satisfied employees.

We wanted to achieve good results
in order to invest in the future.

And we wanted to make the best cars.

The upshot of which will be
that by 2018 we are going to be

the preeminent car manufacturer
in the world.

[Schmitt] Volkswagen never
was great in America.

The Volkswagen Bug was kind of a fluke.

But America's a very important market.
At the time, it was the world's largest.

So, those Americans,
they have to buy our diesel cars.

That's what he wanted
for the United States, diesel,

which is incredibly hard to do
in the United States.

Everyone knew this.

[stutters] And that's how it all started.

The pressure on everybody

to increase sales became unbearable.

[Groth] Under pressure
and when people feel fear,

they might do things
you don't want them actually to do.

[Gibney] Determined to conquer
the American market,

VW built a new green factory
in Chattanooga, Tennessee.

To comply with
American pollution standards,

VW retooled its product line
and introduced a new clean diesel, TDI.

Its pitch to Americans was captivating.

Cars that were low-cost, low-pollution,
got good mileage and were fun to drive.

Perfect.

With its new green profile,
VW's CEO boasted

about its new-found commitment
to social responsibility.

And Chattanooga stands
for the Volkswagen way of life.

Sustainable, reliable and successful.

Now, more than ever,
Volkswagen has everything it takes

to win the hearts and minds
of American customers.

[Gibney] I was one those people
who stood up and cheered.

I was proud to own a VW.
Auto experts were cheering too.

Somehow, VW seemed to have
solved a problem no one else could:

how to clean up dirty diesel engines
in small, low-priced cars.

I was completely surprised
when I suddenly saw the clean diesel thing

in the United States.

[stutters] And first thought was,

"Great. That's great.
They solved the problem.

Wow. I'm really deeply impressed."

Then I looked at the price of the cars

and, hmm, well, it's actually
right in the market.

But I was asking myself,
"How did they do it?"

And I'm not an engine developer,
I'm not an engineer, so...

There might be a way nobody else
has ever seen. Uh, great, they did it.

[Gibney] VW's solution
to the diesel problem

caught the attention of a group
focused on clean transportation.

They studied VW diesels
not to see if they were bad,

but why they were so good.

And whether the US cars could
serve as a model for other companies.

The man in charge of the group
was an American named John German.

[John German] I describe myself
as a pragmatic environmentalist.

I spent about a decade each
with Chrysler, then EPA, then Honda

before I wound up at this non-profit,

International Council
on Clean Transportation.

The goal's always the environment.

We focus on working
with regulators worldwide,

not with legislatures.

So we're trying to help
the regulators do their job better.

The whole VW scandal started in Europe.

In 2011-2012, there's a report
from an organization called JRC.

It actually showed some anecdotal evidence
of high diesel emissions in Europe.

But the report was basically ignored.

We had this brainstorm
that there was a missing piece of data,

which is what's happening in the US.

And so, in 2013, we decided
to test some diesels in the US.

Primarily because
we expected them to be clean.

And then we would take that data
back to Europe and say,

"Look, they're clean in the US.
How come you can't do it in Europe?"

[engine starts]

[Gibney] German needed to find someone

to test what was coming out
of the tailpipes of the cars,

first in the lab and then on the road.

The contract went to a group
at the University of West Virginia.

Car geeks who wanted to see

if clean diesel was for real
in any kind of car.

[Arvind Thiruvengadam] This is
a portable emissions measurement system

that we use to measure emissions
from vehicles on a real-time basis.

It's a miniaturized version
of a laboratory-grade measurement system

where it's kind of
in a shoebox-size, uh, equipment,

where you can put it in the vehicle.

This is used for a very specific purpose,
which is in-use measurement.

So we tap into the tailpipe
and it measures two things.

It measures the exhaust flow rate,
how much exhaust is coming out,

and then what the constituents
of the exhaust are.

So it's just a simple math,
flow rate times the concentration,

which is going to give you
the, uh, the amount of, uh, pollutants

that are coming out of the tailpipe.
So that's...

[Gibney] Arvind Thiruvengadam
was part of the team

that did the diesel pollution test
for John German.

They focused on European diesels
being sold in the US.

[Thiruvengadam]
Whenever we do real-world testing,

we do expect certain deviations
from the certification number.

Conditions such as ambient temperature,
road grade, traffic and such,

which you always cannot
expect the manufacturer

to be at the lowest possible emissions.

But there is
an acceptable level of deviation.

Usually, five to six times deviation
is part of real-world activity.

But the kind of deviations
we were observing

from the VW passenger cars
were significantly higher.

[Gibney] During the road test,
the VW TDI was sending

up to 40 times more NOx into the air
than the VW lab test numbers.

West Virginia University,
then they came to us.

Once they said, you know,

"We have these high emissions
and we can't explain it."

And my first reaction was,

"There must be something wrong
with the vehicle."

Literally, a malfunction.
It wasn't operating properly.

But we tested these vehicles
at the California emission laboratory

and they passed the standards,

which meant there was nothing wrong
with the vehicle.

And at that stage, I was pretty darn sure
this was a defeat device.

There's a long history of defeat devices

and I worked at EPA during some of these
defeat device investigations.

The most recent major one was a 1998 case

for heavy-duty engine manufacturers,

in which almost every manufacturer
of heavy-duty engines

was calibrating them to increase emissions
when they ran down the highway.

That scandal cost them about $1 billion
in total fines and remedies.

And now with the VW case,
I knew I was sitting on a time bomb.

But the words "defeat device"
never would cross my lips,

'cause you just don't say that
about a multi-billion dollar company

when you're a little, uh, NGO
with 30 employees.

It was just too dangerous.

[stammering] We'd have been potentially
sued out of existence

if it had even been implied we were
accusing VW of having a defeat device.

[Gibney] To avoid retaliation by VW,

German first revealed
his findings in 2014

in San Diego,
in a small academic conference.

[people applauding]

[Gibney] In the audience
were a handful of VW executives.

They must've realized for the first time
that investigators were on their trail.

But German was careful not to call out VW
when it came to publishing results.

[German] The compromise
that we came up with

is that we did post the report publicly
on our website,

but it refers to vehicles A, B and C.
We did not identify them.

Now, two days before
we put the report online,

I sent a courtesy e-mail to VW, saying,
"This report's coming out. Here it is.

By the way, vehicles A and B are yours."

[woman] Raise your hand, sir.

Do you swear or affirm that the testimony
you're going to give in these proceedings

depicts the whole truth
under penalty of perjury?

-I do.
-[woman] Thank you.

[Michael Melkersen]
You are Stuart Johnson?

I am.

[Melkersen] Are you currently employed
at Volkswagen Group of America, Inc.?

Yes, I am.

-How long have you been employed there?
-Uh...

All together,
I've worked at Volkswagen 33 years.

In this e-mail, uh, it's true isn't it,

that you're talking about
the West Virginia University study. True?

Yes.

Second-to-last sentence:

"Some presenters indicated
they suspected cheating." You see that?

Yes, I do.

-That's something you wrote, right?
-That's correct.

So you were aware,
at least as of April 8, 2014,

that cheating
was one of the possible explanations

-for what was going on. True?
-Yes.

You state, quote,

"We will have to be careful with this
going forward."

-That's correct.
-Why did you say that?

Because I didn't like hearing that,
out in a public forum,

Volkswagen was being accused of cheating.

Well, what was it specifically that
you all would need to be careful about?

I didn't like the fact that there was a...
That that would, um, lead to

some kind of suspicion
against our company.

But how could you be careful
in order to alleviate suspicions?

You have no control over suspicions
third parties have, right?

Yes.

So what was it specifically
that you needed to be careful about?

My reason for writing that

was that I wanted to
try to manage the message

and part of managing that message
is engaging with the agencies.

[Gibney] The agencies Johnson
tried to manage

were the EPA and California regulators.

Following the San Diego presentation,
California did its own tests.

They confirmed the West Virginia results.

Inside the lab,
the pollution emitted by the cars

was well within government limits.

But on the road,
NOx levels were dangerously high.

That caught the attention
of Alberto Ayala

at the California Air Resources Board,
known as CARB.

What was different about this is,
how far off they were, the magnitude.

We're not talking about
just a little bit above the standard.

Forty times the limit was the average.

If you look at some data points
that we have, um,

[chuckles] in some cases,
it was 80 times the limit.

And now you have two data points.

We have two studies on our hands,
saying this just doesn't make sense.

At that point,
that's when we went from research

to, "Now we need to turn this into
a regulatory action."

What followed was 60 months
of intense interaction with the company,

back and forth, because it just escalated.

We would do some testing,
generate questions,

send them to the company.
They'd be expected to bring us answers.

They would bring answers,
we would go back to the lab

and try them
and then generate more questions.

[Gibney] CARB was asking tough questions,

and back in Wolfsburg,
executives were terrified

that honest answers
would reveal a long trail of deceit.

CEO Martin Winterkorn
received an urgent e-mail

from VW's head of quality management,
Frank Tuch.

"A thorough explanation
of the dramatic increase in NOx emissions

cannot be given to the authorities.

It can be assumed that the authorities
will then investigate

whether Volkswagen implemented
a so-called defeat device."

Rather than come clean, VW thought its
only alternative was to stall for time.

[audience applauding]

[Winterkorn in German]
Technological leadership

is not just defined anymore
by horsepower and torque.

The joy of economical and emissions-free
driving, ladies and gentlemen,

will be the currency in coming years.

The company was,
uh, unfortunately, uh, dismissive.

It's like, oh, you know, "Maybe
your instruments are not well calibrated,"

or, you know, "Oh, you have academics,
graduate students running around,

maybe they did it wrong
and, uh, you guys gotta go check in

because you gotta use experts
to make sure that..."

And we would do all of that, right?

'Cause, again, all along, we're thinking,
"This is not a defeat device.

This is just a technical problem."

[Melkersen] It's true, isn't it,
that these various reasons were given

in attempt to mislead the agency
into believing

there were technical explanations
for the high NOx level

as opposed to an explanation
that involved cheating? True?

In retrospect, yes, that's true.

Mr. Johnson, I've handed you
what's been marked as Exhibit 25...

[Ayala] The two company representatives
that we interacted with the most

were Stuart Johnson and Oliver Schmidt,
who at the time was actually based here.

So he represented the company
when it came to certification issues.

[Oliver Schmidt] Let's first have a look

at Volkswagen's history
of diesel in the US.

With this technology, we won, in 2009,
the Green Car of the Year.

Unfortunately, we got new emission
regulations in the US.

So, we had to comply with, um, with Bin 5
or ULEV standard all over the US...

[Melkersen] In May of 2014,
was Oliver Schmidt your boss?

Yes, he was.

When the West Virginia University
report came out,

did Oliver Schmidt express to you

that one of the possibilities
for the explanation of this report

-is that we were cheating?
-No.

We were able to increase
fuel economy by a lot,

and we reduced the NOx raw emission
of the engine by 40%

in order to comply with
future emission regulations...

[Gibney] Oliver Schmidt was not sharing
what he knew

with many of the US team,
including Stuart Johnson.

But the cheating and how to handle it
was an open secret

among many executives in Germany.

Schmidt wrote an e-mail posing
a fundamental question about strategy.

"It should first be decided
whether we are honest.

If we are not honest,
everything stays as it is."

Translation: Keep cheating
and conceal the defeat device

in a storm of obfuscating e-mails,

misleading technical reports
and endless diversionary meetings.

[Ayala] For every meeting
that Oliver and I had,

our technical teams probably
had another five, ten meetings.

There was so much going on
and it just got really convoluted.

That was a challenge here. It didn't
feel like we were making progress.

We were negotiating, holding meetings
with them, talking about...

[Gibney] As CARB turned up the heat on VW,
Stuart Johnson was suddenly promoted

and Oliver Schmidt was quickly
transferred back to Germany.

[Melkersen] Do you believe
that Oliver Schmidt

was transferred back to Germany

and you moved into that position
to allow plausible deniability?

[clicks tongue] No, I don't believe that.

Did you have a reputation at your company
for honesty?

Yes.

-Being forthright?
-Yes.

Did Oliver Schmidt share that reputation
that you had?

No.

[Gibney] Back in Wolfsburg,

Schmidt and the other German execs
came up with a plan.

VW would announce a recall
and pledge to fix the problem.

For the moment,
CARB and the EPA seemed satisfied

that VW was finally ready
to do the right thing.

They told us,
"Oh, while we do this recall,

we will put a fix to this issue
on the NOx."

Right? Uh, in the hope
that I would come back

and tell my team, "We're done."

[Gibney] They'd convince you
with their data

so you wouldn't bother
to keep testing the car.

Correct, and of course that's not how
we do business here, right?

They did the recall
and we got some test vehicles.

We went back into the lab,

and it wasn't giving us in-use emissions
that match the in-certification test.

[Melkersen] Would it be a fair statement
that at the time that

Volkswagen Group of America
was telling CARB

that it would update its software

to more closely attempt compliance
with regulatory limits,

in fact, it was updating the software
to further its cheat?

[lawyer] Objection to the form
of the question.

[Melkersen] True?

I would say, yes, that's true,
knowing what I know today.

[Gibney] VW did not fix the problem.
Just the opposite.

The company fixed the defeat device
to make it even better at cheating.

Through VW's own test,

engineers discovered
that sometimes the pollution controls

would actually work
as advertised on the road.

But that caused wear and tear
on the exhaust system.

So to protect the cars,
VW engineers changed the software,

so pollution controls were shut off

as soon as the driver moved
the steering wheel.

[German] You strap a vehicle
onto a dynamometer

and the front wheels never turn.

So they looked for movement
of the front steering wheel

and deactivated emission controls
if they found that movement.

How could they possibly believe

that they could go out and just change
from one egregious strategy

to a different egregious strategy
and get away with it?

I still don't understand that.

That was without doubt
the stupidest thing VW did.

The time that we wasted
giving them the benefit of the doubt,

that's really what-- what, um,
what got me, that I was, um...

I was naïve thinking that the company
was operating, uh, in good faith

and trying to find a solution,
because it was all wasted.

They could've come clean from day one
and saved us a lot of trouble.

Very systematically, we were checking...

We thought it's this.
It's not, it's not.

You go down and eliminate
all other options.

The only thing remaining is
it's gotta be a defeat device.

I always thought that there was
a good explanation for what was happening

and that it wasn't cheating.

And the first time that I really...

had the feeling that something was wrong
and cheating was very possibly happening

was when we met with
the Air Resources Board on July 8th, 2015.

In my opinion, I would characterize it
as, uh, a pretty rough meeting.

Lots of strong talk from the agencies.

They said,
"We think you're recognizing the FTP.

We don't know how you're doing it,
but we're convinced you're doing it."

[Melkersen] Who above you,

as far as management's concerned,
did you discuss it with?

[clicks tongue]

Well, I've discussed it a lot
with the management in Germany.

Uh, Oliver Schmidt almost called me
immediately after the meeting,

within a day or so, saying,

"What went on at the meeting?
How did it go?"

I said, "It didn't go very well."
He said, "Yes, I heard that."

I'm gonna stop you there.

Did you ask anybody
whether or not you were cheating?

-No, I didn't.
-Why not?

To me, the people I was in contact with
were the people that were deceiving me.

[Gibney] When it was clear
VW's fog machine wasn't working,

VW agreed to a series of meetings
with CARB in August 2015.

[Johnson] Oliver Schmidt told me

that he was authorized to come to the US,

he was authorized
to meet with Alberto Ayala,

and he was authorized
to make an admission.

The reason VW finally came clean
is actually fairly simple.

EPA told them that
if they didn't come clean,

they would not certify any 2016 vehicles,
including their gasoline vehicles.

That means VW can't sell cars.

No sales of new cars.

There were comments made at the meeting
that this was a financial decision.

[Melkersen]
There was an intentional premeditated

cost-benefit analysis to cheat.

That's what was stated in the meeting.

So, it sounded like a pretty strong
confession to me at the time.

Stuart did approach me
and we went aside and had a conversation,

and that's when he admitted to me
that it was a defeat device.

That was the first time.

We told Mr. Ayala

the vehicle recognizes the dyno,
it recognizes the test cycle

and that this was a software gimmick.

That some software had been developed

by somebody who thought
they were smarter than you.

I was very upset.
I mean, I was probably very, um...

not very polite,

and I think that Stuart probably took
most of the brunt of it

simply because he was the company
at the time.

But I was very upset.

[Melkersen] Read for me, if you would,
into the record,

what the quotes were
that you're quoting Dr. Ayala saying

to your conversation, if you would.

So, his quotes are,

"You played us. You tried to put
a pillow over our head.

You wasted a lot of our time and money.
We will come after you hard on this.

This has taken too much time
and raised expectations.

Now it's just going to confirm
what NGOs have been saying all along.

We will write a nasty press release.
I don't believe your company anymore.

This is going to be a lot of money
and you better not fight it.

And don't give me any shit
on the midterm review

when I ask for more stringency."

[Melkersen] Thank you.

There was tremendous pressure
that the company was putting on itself

to really get to that point where
they wanted to be number one,

and they basically wanted to get there
at whatever cost, and...

now, here we are.

[man] Ladies and gentlemen,

please welcome president and CEO

of Volkswagen Group of America,
Michael Horn.

[audience applauding]

So, let's be clear about this.

Our company was dishonest with the EPA
and the California Air Resources Board,

and with all of you.

And in my German words,
we've totally screwed up.

[in German] The irregularities found
in our diesel engines

are the antithesis of everything
Volkswagen stands for.

Even I, at this point,
don't have answers to all the questions.

But we are working diligently
to find out exactly what happened.

[Gibney] Is it conceivable

that Winterkorn didn't know about
the cheating devices? Is that conceivable?

If you believe in the tooth fairy,
then it's conceivable.

[in German] To our employees,
I'd like to say,

I know with how much dedication,

honesty and integrity you pursue your work
day after day.

I am well aware that much of it
has been thrown into question.

But it would be wrong
to cast general suspicion

on the hard and honest work
of 600,000 people

because of the terrible mistake
made by the few.

[in English] Dr. Winterkorn,
this happened under your watch.

You own it.

Don't tell me that some engineers
at some place did something wrong.

Don't tell me that.

[in German] You have my word,

we will do all of this with the greatest
possible openness and transparency.

[Gibney] Winterkorn denied any knowledge

of the defeat device
or the cheating scandal,

but he was forced to resign
the day after giving the statement.

The US Congress began to investigate,
with one question in mind:

how high did the deception go?

[Joe Barton] Raise your right hand
and I'll swear you in.

[Gibney] Michael Horn was the CEO
of Volkswagen Group of America.

[Barton] Do you swear
the testimony you're about to give...

[Gibney] One of the company's
best salesmen,

he'd worked at VW for 25 years.

I'm told that this was a decision made
in Germany at the corporate level.

Is that correct?

Two answers to this.

Um, first of all,
the investigations are ongoing,

but this was not a corporate decision.

From my point of view,
to my best knowledge today,

the corporation in no board meeting

or no supervisory board meeting
has authorized this.

[Gibney] But Michael Horn knew
about the defeat device.

A year and a half before
his testimony to Congress,

Horn had received an e-mail
from Oliver Schmidt.

Schmidt told Horn about the defeat device
and the likely consequences.

"Intentional conduct equals penalties."

[Johnson] In a conversation
I had with Michael Horn,

he had mentioned that he had received
a report from Oliver in May of 2014.

[Melkersen] Did he tell you
what it was about?

Not in detail. No.

-Or did he tell you in summary?
-He just said that it, uh...

raised the possibility of cheating
at that point in time.

At that point of time, I had
no understanding what a defeat device was

and I had no indication whatsoever

that a defeat device
could have been in our cars.

This was a couple of software engineers
who put this in for whatever reasons,

and I would also like to find out...

That story of a small group
of engineers at Volkswagen

doing something on their own
is unbelievable, okay?

It's unbelievable, okay?

At Volkswagen, if you want a pen,
you need three signatures.

[Gibney] New York state took up the fight

and launched a civil suit,
proclaiming fraud by VW.

Today's suit and the nine-month
investigation that led to it

are designed to hold Volkswagen
accountable for their actions

and to make sure that no car company again

ever considers
this type of widespread deception.

The individuals
who purchase cars are victims.

Those who suffer
from this extra pollution are victims.

So is every other company
that followed the rules

and was trying to produce a car
complying with the law

to meet these emission standards.

To have these folks cheating and
programming their cars to commit fraud,

in a way, their competitors
are also victims.

We're trying to establish
a level playing field,

that everyone has to follow the rules,

no one is above the law

and no level of corporate cover-up
can excuse this.

[Gibney] Did you come up with evidence
that indicated

that Winterkorn knew what was going on?

Yeah. Going back to, I think, 2006,

it's clear that things at least
came to his attention.

We've reviewed millions of pages of
documents, thousands of internal e-mails.

It is clear that there had been
a very frantic effort to cover this up.

They had phony recalls,

they looked at other penalties
against carmakers and said,

"We can survive this sort of a penalty."

There were signals sent, "We may be
putting a document holdout,"

which sends a signal, maybe
you wanna destroy some documents.

Hundreds of very high-level executives
and engineers knew about this.

We didn't find one e-mail
from anyone saying,

"We shouldn't do this,"
or, "This is against the law,"

or trying to put the brakes
on this system.

So this was a corporate culture
permeated by fraud.

Now, all of these cars are
out of the legal compliance, clearly.

[Johnson] I had a phone conversation
with Michael Horn

after I'd heard from Oliver Schmidt,

that he's authorized to make an admission.

Things were looking bad,
you know, dire outcome.

So, um...

Michael Horn called me.

I told Mr. Horn,

"It looks like we've been cheating
and we've been caught."

[Melkersen] And did Mr. Horn then
immediately issue a stop-sale order,

to stop selling these cars that Volkswagen
had been cheating to sell?

Not that I'm aware of, no.

Would it be fair to say that
Michael Horn's primary focus is

increasing sales?

[lawyer] Objection. Calls for speculation.

[Melkersen] In respect to his position
at Volkswagen Group of America?

[lawyer] Calls for speculation.

I would say yes.

You know what's really great

about the all-new 2012 Volkswagen Passat
TDI Clean Diesel?

Not only does it provide
excellent fuel economy,

but you'll love the performance, too.

Delivers turbo-charged performance
and great mileage.

[man] Passat TDI Clean Diesel
with up to 814 highway miles per tank.

Just one reason Volkswagen

is the number-one selling diesel car brand
in America.

If you want a look into the psyche,
into the thinking of a company,

you should look at
the advertising campaign.

The old wives' tale is funny.

How do you like my new car?

Isn't diesel dirty?

Oh, say it's beautiful, for Christ's sake.

I think it's beautiful,
but aren't diesels dirty?

Yeah, that's true.

Oh, that used to be dirty. This is 2015.

No, no, no. Listen to me, Terry.

-Diesel in Latin means dirty.
-I'll prove it to ya.

[woman] You're gonna ruin your scarf.
Oh, look what she's doing.

See how clean it is?

[woman] It's not dirty,
but you still have a dirty mind.

The audience is like, "It's very funny.
That's the way it is." But it was a lie.

Every time one of those ads ran,

the executives of these companies knew
that they were telling a lie,

and they'd sold, uh, ultimately about
11 million of these cars around the world.

That's a lot of cars,
a lot of excess pollution.

They seemed to have a culture
in the company,

a feeling as though
they were above the law.

[Gibney] Between state
and federal sanctions,

VW was forced to pay
over $25 billion in fines,

and to buy back
over 550,000 vehicles from angry owners.

Through lawsuits and investigations
by government regulators,

more details would be revealed about
VW's vast cheating campaign in the US.

And across the ocean,

a journalist named
Hans Koberstein uncovered

a much more pervasive problem in Europe.

Our main question was
is Volkswagen the only one?

What about all the other diesel car
manufacturers in Germany?

World leaders in diesel technology.
Do they use illegal defeat devices, too?

My colleagues and I decided to do a test

to measure the emissions on the road
of German cars.

BMW, Mercedes and a Volkswagen
with a defeat device.

[man in German] Do they poison
the air more than allowed?

When we tried to get
the portable emission measurement system

to do the testings,

in this time
there were just four companies

that offer this service in Germany.

We called all of them
and they all of them told us,

"Mmm. [clicks tongue]
Mmm, we don't want to do it with you."

Or they had no time, or they said,
"Oh, you can't do this testing."

"Why not?"

"You can't do this testing." [chuckles]

They just didn't want to do it with us.

Those service agencies that offer
the mobile measurements

depend on the car industry,
so they didn't want to harm their clients.

And so, we had to go to Switzerland
to do this testing.

[man in German] We did the same test
on the street that we did in the lab.

[Koberstein] We compared
how is the car acting in the lab

and how is the same car acting
on the road.

And it was amazing to see
that it is dirty.

Not just a little bit.
It is extremely dirty.

The Volkswagen with
an illegal defeat device

and the BMW and the Mercedes

emitted up to 400-500% higher
than during the laboratory test.

That shows clearly
that those cars have a defeat device.

[Gibney] When Hans asked the car companies
for comment,

they responded by threatening to sue
for hundreds of millions of dollars

to prevent the broadcast.

But Hans pushed forward and exposed

not only the cheating but the way
the German government enabled it.

Every manufacturer in Europe
is using calibration strategies

that, in the US,
would be considered defeat devices.

Every one of them.

And what's really interesting here

is that if you read the language
for what a defeat device is,

in Europe and the US,
they're almost identical.

Almost word for word.
So, what's going on here?

What it really comes down to is that
there are three exceptions

for cases in which calibration changes
are allowed.

And one of them is for safety
and protection of the engine.

In Europe, the manufacturers just claim,

"Oh, I need this
for protection of the engine."

Or, "I need this for protection
of the after-treatment system."

And those claims go unchallenged.

[Koberstein] The understanding
of the German government

is defeat devices are generally allowed

because there's an exemption
to protect the engines.

Any engine must be protected,

so all the defeat devices we know
in diesel cars are allowed.

That's the interpretation of
the German government and it is absurd.

[Gibney] It seems crazy that
the German government cares more

about protecting engines
than human beings.

-Is it this way throughout Europe?
-Well, the primary issue in Europe

isn't so much their requirements
which, for the most part, are world-class.

But Europe does tend to have a problem
with enforcement.

The standards are set at
the European level for all the countries.

But enforcement is done
at the individual country level.

Further, every country agrees to accept
enforcement in every other country.

So this leads to a situation
which the manufacturers go shopping.

Which country is going to do
the least enforcement?

[Gibney] In Europe,
it's a game of musical chairs.

If enforcement is too strict
in France or Finland,

try Luxembourg or Malta.

They may need the money
or factories that might be built,

so they're willing to look the other way
when companies cheat.

Companies often claim they can't improve
safety or pollution controls

or they'd go out of business.

For VW, the situation is even more prone
to corruption.

The German province of Lower Saxony
actually owns 20% of VW's voting stock.

Given that fact,

is it likely that Lower Saxony
will conduct a thorough investigation

of its biggest profit center?

[Schmitt] The government covered
the car companies.

Why? Because of its jobs.

They're very worried
if people are out of a job

because then they're lining up
outside of the agencies

and collect money
and they vote them out of power.

Any national government in Europe
has the problem

if it has a national car industry.

"Oh, how are we going to deal
with this problem?"

They all think, "Mmm, better not to harm
our national car industry,"

because they can only enforce the law
for their own car industry,

not for the German or French one,
just for the British one.

And so, any national government
is thinking,

"Should I harm my national car industry
if others won't?

No, I will not do this. I am not stupid."

And they are still selling dirty cars.

[Gibney] To this day,
despite the VW scandal,

car manufacturers are selling dirty cars
throughout Europe and the world.

It always sounds good to say,
"We need the jobs."

But what if you were offered a job
at an assembly line

to make products that killed people?
Would you take that job?

[train horn blowing]

[German] What's going on in Europe?

They have these plans for how
they're going to reduce air pollution,

and they've had these for 10, 20 years.

They made projections about
what's gonna happen in the future.

They have not been meeting
their projections for ambient air quality.

The pollutants in the air are higher
than they've always projected,

and now we finally know why.

The one thing that the governments
in Europe did after the VW scandals,

they did a lot of testing.

So we have in-use tests
on over 150 vehicles in Europe now,

and it's clear.

The diesels in Europe
are six or seven times dirtier

than the standards allow.

So the ambient air quality
in every city in Europe

is worse than it should've been,

and this is having health impacts
and premature deaths.

In Germany, it's more than
10,000 premature deaths per year

only due to nitrogen dioxide.

That's much more than we have

in losses and deaths
due to traffic accidents.

I am living in Berlin
for almost 20 years now,

and I am living in a zone
where it's green.

Lot of trees, parks.
There's a lake, there's little traffic.

We did measurements
on the road where I live

and those measurements showed
that the levels of nitrogen dioxide

are much higher than the average
annual limit that is legally allowed.

I wouldn't have ever expected that.

That's really a huge problem.

We think we have an air pollution problem
wherever we see many cars

and wherever many cars are driving
at the moment.

But the problem of nitrogen dioxide is

that's even there where
you do not expect it to be in the cities.

We did measurements in a kindergarten
that's very close to where I'm living.

The levels within the kindergarten
were above the legal limits.

[Gibney] The German car companies
didn't want their customers to know

how harmful were their diesel cars.

VW, in particular, wanted to fight back.

To show the benefits of clean diesel cars,

VW embarked on a plan
to do their own tests on human beings.

Step 1: Establish a phony
research company called EUGT,

funded by VW, Mercedes and BMW,
to study the effects of diesel exhaust.

This secret plan to fool the public

was uncovered by a lawyer representing
angry American consumers.

[Melkersen] So, EUGT, the fake nonprofit,
pays approximately $730,000

to a company called Lovelace Respiratory
Research Institute, LRRI,

to conduct a study.

The purpose of the study, purportedly,
was to attempt to show

that the new diesel
technology represented

by these Volkswagen TDI
Clean Diesel vehicles

was much more environmentally friendly
than the old diesel technology.

It would not result
in the type of health problems

that diesel exhausts
from old diesel technology would create.

And the person
that was in charge of that study

was a guy
by the name of Dr. Jake McDonald,

whose deposition I just recently took.

Did you ever have any information that

any of the monies that you all received
to do the study came from Volkswagen?

I presumed that because Volkswagen
was a contributing member of EUGT

that they contributed money to the study.

But I didn't know...

I had no details in terms of
who contributed what amount.

All I knew was the contract was with EUGT.

So, the setup happens
in Lovelace's laboratory

in Albuquerque, New Mexico.

They procure a dyno to run these cars on.

That dyno was selected
by none other than Stuart Johnson,

and personally delivered there
to the LRRI facilities.

You had involvement
in assisting with this study.

True?

Limited involvement.

[Gibney] Stuart Johnson wasn't
the only VW executive involved.

James Liang, a German engineer

who helped with the development
of the defeat device,

also helped shape the study.

[Melkersen] James Liang personally
delivered a TDI 2013 red Beetle

for purposes of doing this testing.

Volkswagen USA insisted

that James Liang be given real-time access
to LRRI's data.

Is it unusual for a manufacturer
to require

real-time monitoring
of what is happening in your study?

[lawyer] Objection. Vague.

Calls for speculation.

Um...

It's the first time
that I've experienced that.

In your entire career,
this has never happened previously?

Correct.

That was necessary to ensure

that these so-called clean diesel vehicles
would run in test mode

and produce the fraudulent emissions for
purposes of this fake scientific research.

What they're doing at the same time
is they're attempting to compare

their so-called new technology
with old technology.

So they are running
a 2004 Ford F-250 on the dyno also.

In the original draft,
the original proposal, the study,

they were actually going to have
a human sitting on an exercise bike.

There's actually a diagram of this
in the proposal

where a human participant
would sit riding an exercise bike.

They would then be exposed to gas
directly from the diesel vehicles.

And then, they would poke and prod
that person later to determine, uh,

what type of health effects

they would see
from this person being gassed.

Were you involved in discussions about
doing this study on humans?

-Yes.
-In retrospect, does that seem...

ridiculous?

[lawyer] Objection. Calls for speculation.

In retrospect,
the optics aren't very good.

Obviously, one cannot help to think back

throughout history
of another series of events

involving individuals being gassed

by a person who was actually
at the opening

of the very first Volkswagen factory

and gave a speech there
in connection with that opening.

Did you recommend against
doing this study on humans?

[clicks tongue] Um...

I don't recall.

I know that, um, David Geanacopoulos
was involved in the discussion,

and he didn't like the idea.

[Gibney] But VW did not abandon
the idea of the experiment.

Someone suggested
that the test be performed on NHPs.

Non-human primates.

[animal screeching]

[chittering]

[Melkersen] They set up tubing

from the back of the tailpipe
up through the ceiling.

The gas would then come down
into the chamber.

These monkeys have been trained
to watch TV,

and so what they would do

is they would actually play
for them cartoons

and have them watch cartoons.

[Melkersen] After they would've been
exposed to the TDI Clean Diesel gases,

they're then subsequently exposing them
to the Ford F-250 gases.

[engine starts]

The nitrogen oxide
and other particles of exhaust

that would be coming out of this F-250

are very, very dirty,
and very noxious, very harmful.

[music playing on TV]

[voice on TV] Wake up!
Where's everybody going?

[Melkersen] The monkey
would be exposed to that gas

for a three- or four-hour period of time,

after which time they would take
the monkey back to a separate facility

and test it, taking blood samples.

They would stick a tube
down the monkey's throat,

in order to scrub samples
from inside of the monkey's lungs.

[whimpering]

[maniacal laughter on TV]

[Melkersen] Do you know
what happened to the monkeys

after the testing was completed?

We didn't ship them to Volkswagen,
if that's what you're asking. [chuckles]

[stammering] They... We...

I don't recall. My... We...

It was a non-terminal study,
so the animals were not euthanized

to be able to look at any sort of
more invasive responses. So...

[Melkersen] When Dr. McDonald realized

that these emissions that he tested were,
in fact, fraudulent,

and that he had been duped and set up
to be used by Volkswagen as a pawn,

he said that
this report cannot be published.

You know, there is a concern, obviously,
amongst Volkswagen that,

if a jury were to ever hear
about any of this stuff,

that could really impact
the verdict in this case,

and, in fact, Volkswagen
has filed a motion with the court,

specifically asking the court to exclude
any mention of any of this.

[monkey screeching]

[Loretta Lynch]
Today, the Department of Justice,

the Environmental Protection Agency

and the US Customs and Border Protection

have reached a global resolution
with Volkswagen

that carries both criminal
and civil penalties.

As part of this resolution, Volkswagen is
pleading guilty to three felonies.

Conspiracy to defraud the United States,
to commit wire fraud,

and to violate the Clean Air Act,
obstruction of justice,

and importation of goods
by false statements.

[Gibney] In January 2017,
James Liang pled guilty to fraud

and was sentenced to 40 months in prison.

Oliver Schmidt was arrested in Miami
after a Caribbean vacation,

just as he was about to board
a flight to Germany.

In August of 2017,

he pled guilty to conspiracy
to defraud the government.

He was one of six VW executives
indicted by the US.

[Melkersen] Did anybody ever instruct you
during this timeframe

to basically keep your mouth shut?

[clicks tongue] I don't recall that.

He said that's not a "no."

I don't remember.

[Melkersen] You're aware that
Oliver Schmidt recently pled guilty

to a felony in federal court in Michigan,
are you not?

I'm aware of that.

[Gibney] As of September 2017,

Stuart Johnson has not been charged
with a crime.

There are indications that
he may be a cooperating witness

for the ongoing federal investigation.

Michael Horn resigned from VW in 2016
and returned to Germany.

Martin Winterkorn remains untouched
by the criminal investigation.

Outside of Germany, other carmakers,

including GM and Fiat Chrysler,
have been accused of using defeat devices.

But even after all the fines,
the criminal charges and the scandals,

VW realized its dream of becoming
the world's largest carmaker.

[crowd applauding]

At the same time,
with the election of President Trump,

the federal government declared

that corporate profits
would now be more important

than protecting the environment.

In order to fulfill my solemn duty
to protect America and its citizens,

the United States will withdraw

from the Paris Climate Accord.

[applause continues]

[cheering and applause]

Thank you.

[Gibney] This announcement made
the US, Syria and Nicaragua

the only three nations on Earth to abandon
the effort to prevent global warming.

The Trump administration
has also threatened

to undermine CARB in California,

because of CARB's
strict air-pollution controls.

[Ayala] When you look
at a state like California,

we have goals for 2030 and 2050.

You know, long-term goals.

We need to start thinking now

and laying out ideas
for how we're gonna get there.

[Schneiderman] It's hard for people
to remember now, New York,

when the smog problem, caused by NOx...

It's exactly the stuff that was
being emitted from these cars.

It was really bad
back in the '60s and '70s.

It was a city where people would get sick,
people would die from the smog.

So, this is something we spent decades
in the United States trying to clean up.

We've had great success.

The American people don't want
to undo the regulations.

State environmental laws
are a very important backstop.

The federalist system was designed

so that states can fill in
if the federal government does not.

That's why we're pushing so hard
on some of these policies,

because this is really
about impacting on people's lives.

[Gibney] When my wife turned in our car,

it was sent to an asphalt graveyard
for VW's dirty diesels

in the shadow of
the old Detroit Lions stadium.

From here, according to the company,

they will either be fixed,
recycled or destroyed.

Every car in the lot represents

the sum of an economic calculation
made by the company

between risk and reward.

In that way, VW is not so different
from other companies.

They see themselves
as financial abstractions,

pressured by competition to build models
on profit, loss and market share.

But when many of us think
of the lungs of our children,

scarred by NOx fumes
that could have been contained,

we wonder if the equation is missing
an important variable.

How to balance the cost of a car
with the value of a human life?

[music playing]