When auto industry executives come together to party, the smell of exhaust fumes is far from disagreeable. It's also perfectly acceptable to exalt a past when cars were still allowed to stink and nobody much cared. As such, a classic car center in Berlin was the perfect place to hold the New Year's reception for the German Association of the Automotive Industry on Tuesday of this week. There was plenty of room and glittering old cars were everywhere, their motors roaring as bluish smoke poured out of their exhaust pipes.
The only thing that wasn't allowed to pollute the air was honesty.
Around 700 guests from the worlds of politics, industry and science attended the event. Germany's acting minister of transport, Christian Schmidt of the Bavarian Christian Social Union party, gave a speech and proved himself a master at dodging the elephant in the room. He said there are "things" that are "anything but petty," adding that "challenges" had arisen through "behavior" that had been "improper."
The minister knew exactly what the heads of German car companies wouldn't want to hear at a party hosted by their chief lobbying association. Unfortunately, he yielded to that sentiment. Schmidt didn't say anything about how the automobile companies had deceived and manipulated and tricked and cheated. And he didn't go anywhere near the fact that the products they produce are making the air in our cities toxic.
And there was one word that he took special pains to avoid: monkey. Instead, he said he could provide some advice on the issue "that had recently been added" to the list of problems facing the industry. "I am also the animal welfare minister, after all," he told the crowd.
The scandal surrounding dubious emissions tests on macaques commissioned by Volkswagen, BMW and Daimler can no longer be played down with tedious jokes and vague preaching. In recent days, we have witnessed a number of top German carmakers lose the last modicum of what little credibility they still possessed.
The list of scandals is long: visits to whorehouses submitted as company expenses, manipulation of diesel engines in millions of cars, cartel-style collusion between alleged competitors. Scandal after scandal has been exposed and condemned, with few lessons learned. Instead, improvements were promised, and the industry constantly conveyed that, "We've gotten the message." The company he runs will now "practice greater transparency and honesty," VW CEO Mathias Müller said a few months back. But things have neither gotten any more transparent nor particularly honest.
Next week, the presidium of the VW supervisory board is to meet to address the scandal and decide on steps to be taken in response. But members of the oversight body are getting tired of looking like fools to the outside world.
A source on the supervisory board of one of the German car companies says they are "pissed off." There is also talk of "hide-and-seek games" and "moral light-footedness." One board member rang the alarm, saying: "The automobile industry is well on its way toward destroying its reputation altogether." This time, it seems, there may actually be true consequences as a result of the scandal.
German politicians are using the affair to ratchet up pressure on automakers. They are threatening further recalls of suspicious diesel models and they are also demanding additional concessions. So far, German carmakers had only wanted to pay a portion of the capital for a planned special environmental fund for municipalities aimed at offsetting the harm caused by their motors. But this week, automaker CEOs caved in. After a crisis meeting with acting Transport Minister Schmidt on Tuesday, they indicated they were prepared to shoulder a total contribution of 250 million euros. The monkey tests are going to be expensive.
The scandal was exposed by an American lawyer who has never been involved in a case of this magnitude before. Michael Melkersen runs a small law firm in New Market, Virginia, a small town with only 2,000 residents. The most conspicuous things that stand out on his resume are his hobbies: poker and extreme sports. But during the diesel scandal, in which Melkersen represented VW customers seeking damages, he dug deeper than most of his colleagues.
He wanted to know from VW if the company had tested the effects the diesel emissions would have on humans. But Melkersen says he wasn't provided with a satisfactory answer. So he began spending nights sifting through files from the VW trial. At one point, he stumbled across a series of dubious emails. In them, executives at the company expressed concern that stricter health regulations could impede the success of its diesel models.
For example, a high-level Audi lobbyist offered VW management in the U.S. "guidance" on Dec. 6, 2012, on how "counter-messaging" could be formulated. The World Health Organization had recently classified diesel emissions as a carcinogen. It stated that other studies should be cited that might "contradict" the WHO report. The mail said that requests had also been submitted to Audi headquarters in Ingolstadt.
Such missives served as a clear clue to Melkersen that the company had manipulated not only its engines, but also public opinion -- with questionable expertise that had been generated by scientists who had been bought.
Starting in 2007, BMW, Daimler, Volkswagen and Bosch maintained a joint lobby organization that was disguised as a research institute. The European Research Association for the Environment and Health in the Transportation Sector (EUGT) purported to dedicate itself to the "environmental-medical effects of road traffic."
But the staff in leadership posts alone shows that the institute was in no way interested in independent research. EUGT head Michael Spallek, for example, had previously spent years employed as a leading company doctor at VW. He retained his VW email address, even after his move to EUGT.
The results of the institute's research were accordingly one-sided. The efficacy of low emission zones in cities that place restrictions on driving cars with high emissions? There's no proof, according to one essay the lobby group managed to place in a trade publication for respiratory medicine. Nighttime noise pollution from cars? It's no problem, as long as it's continuous. Do diesel emissions cause cancer? Can't be proven.
A short time later, former VW manager and EUGT head Spallek approved the tests with the monkeys. "We have finished our discussions with the company lawyers," Spallek wrote in an email dating June 14, 2013. The lawyers had given the green light for the study to be carried out, but with one restriction: Non-human primates were to be used instead of human volunteers.
Several VW executives at the time were copied in the message, including Stuart Johnson, the head of the company's Engineering and Environmental Office in the United States.
Pressure from Wolfsburg
But it doesn't appear as though any critical questions were asked. The aim of the experiment with the monkeys had been to deliver definitive proof of how clean "German diesel" really is. The case files compiled by attorney Melkersen illustrate the zeal with which VW's people organized the test. Nothing was left to chance when engineer James Liang began his journey with a bright-red VW Beetle from California to New Mexico at the beginning of October 2014.
The engineer from company headquarters in Wolfsburg, Germany, was already under pressure, even at that point. The U.S. environmental authorities had expressed their doubts about the emissions values of the allegedly squeaky-clean car. VW Chairman Martin Winterkorn had been breathing down his staff's necks, too. The new diesel models needed to provide the company with a breakthrough in the important U.S. market. As such, anything that might possibly preserve diesel's environmentally friendly façade had priority.
Which is where the monkeys came in. As of Oct. 2, all final preparations had been made for the test. The VW man moved assiduously around the red Beetle, which had been placed on a chassis dynamometer. The experiment would be led by Jacob McDonald, an athletic young biologist who had quickly risen in his career at the Lovelace Respiratory Research Institute (LRRI).
McDonald found it strange that an engineer from Volkswagen would be present for the test. "It's the first time that I've experienced that," he would later say. And what he really couldn't grasp was why the VW people wanted to transmit the entire test data in real-time to their research center in California. Engineer Liang had even brought along a transmission device especially for the task.
It's likely that McDonald ultimately understood the odd behavior on Sept. 18, 2015, when news emerged that VW had been manipulating the exhaust systems of its diesel cars in the United States. During the tests on the Beetle in McDonald's lab, the VW engineer had to ensure that the vehicle was operating in cheat mode -- the ultra-clean test mode that was at the center of the diesel scandal two years ago.
The next shock for McDonald and his client VW came three weeks later. The first results from the monkey tests were in and they showed exactly what the auto executives didn't want: The monkeys whose cages had been pumped full of exhaust from an old, red Ford pickup showed no significant inflammatory reaction, neither in their lungs nor in their upper respiratory tracts. Their condition contrasted sharply with those monkeys that had been exposed to the Beetle emissions, which showed signs of irritation resulting from the poisonous gas mixture.
Eager to please their client, the scientists tried to figure out how to massage the results. "You may want to refine the final statement and remove the word 'great' in front of inflammation," one assistant suggested. McDonald wrote that he would feel uncomfortable sending out the results. They are "clearly not what was expected." The situation was absurd: VW still wanted the results even though the entire sham had already been exposed -- and the scientists wanted to submit their report. That, after all, was the condition for receiving the final payment of $71,000.
But it never happened, because the whole farce took a rather bizarre turn. Contrary to the agreement, the researchers had used female monkeys for the study, a fact that the EUGT researchers and VW had learned of. But female monkeys menstruate and are thus unusable for experiments in which inflammation parameters are to be measured. Publishing the study would have been "a no-go," as McDonald contritely admitted during his court testimony.
In other words, the entire experiment was doubly pointless: both because the wrong monkeys were used and because the emissions were manipulated. The entire episode was extremely embarrassing for the largest carmaker in the world. Not only was the study acutely amateurish, but it was also ethically reprehensible.
Meanwhile, the scientists on the EUGT research advisory council also saw their academic integrity evaporating. In October 2015, members of the council assembled for a meeting in Berlin. One of them, the epidemiologist Peter Morfeld, remembers the uproar. Half of the council wanted to write a statement for publication on the EUGT website. "We wanted to clearly distance ourselves from the monkey experiment," Morfeld recalls. They were eager to avoid a situation where their own studies would be cast in doubt.
But EUGT director Spallek and VW's man on the council Helmut Greim, who chaired the group, were opposed to such a statement. They likely realized how explosive the situation could become if the cynical experiment parameters from the U.S. became public. "Our statement was blocked," Morfeld says today.
The researchers from EUGT, who have done work for the carmakers for years, now find themselves bemused by the protestations of auto industry executives, who insist they knew nothing and have blasted the studies as "unethical and abhorrent" (Müller) or who profess to be "appalled" (Daimler). Research council chairman Greim says he believes the "revulsion" to be "overstated." Of course, the carmakers knew about the tests on monkeys and people, he says. "Their representatives were sitting at the table with us."
Several scientists left the EUGT research advisory council in the wake of the turmoil over the experiments and, with the outbreak of the diesel affair, VW likewise began to grow increasingly uncomfortable with the institute. In November 2015, a VW representative said that the diesel scandal could affect the company's support for the institute, adding that all expenditures were being closely examined. But it would be another one-and-a-half years before the organization was dissolved. Finally, in June of last year, a liquidator was quietly engaged who wrapped up EUGT for good.
In autumn 2015, Matthias Müller had just taken over as the new CEO of Volkswagen, saying he "wanted to regain customers' trust." But the company missed the opportunity to clarify and disclose all of its past transgressions. And this despite the fact that there must have been internal knowledge of the embarrassing episode.
VW attorneys have already spent months addressing the monkey experiments. According to U.S. court documents, company lawyers are trying to prevent the study from being presented in court, arguing that Melkersen, the attorney for the plaintiffs, is only interested in triggering an emotional response from the jury.
Other Animal Experiments
This is not the first time that VW has dealt with experiments on animals. Back in the 1990s, the company supported an LRRI research project that examined the effects of diesel emissions on monkeys. In the report that resulted, VW was listed as a sponsor along with the U.S. Department of Energy. For the study, the American scientists used the lung tissue from monkeys that had been part of a different experiment in the 1980s, which involved shutting 30 macaques into cages and forcing them to breathe in diesel fumes for seven hours per day, five days per week for 24 months. At the end of that period, the monkeys were killed so that the animals' lungs could be examined under the microscope.
The samples from those monkey experiments were then examined again a decade later by the VW-supported scientists from LRRI and compared with lung tissue from rats, which had also been made to inhale diesel exhaust for two years. According to the study's VW-friendly conclusion, diesel is likely not as harmful to people as earlier experiments on rats had indicated.
The article you are reading originally appeared in German in issue 6/2018 (February 2nd, 2018) of DER SPIEGEL.
VW says that it had no direct involvement in the project, noting that it hadn't commissioned the study nor did the company have direct contact with LRRI. The company only reached "a financing agreement with the U.S. Department of Energy," VW said in a statement. It was not involved in the animal experiments in question. The company has completely distanced itself from experiments on animals, as have BMW and Daimler. All three corporations have transferred or put on leave those employees who were responsible for the EUGT lobby group. Top executives, however, have not felt it necessary to admit any wrongdoing, though BMW has allowed that the company was slow in reacting.
VW has blamed the fiasco on "mistakes made by individuals," a standpoint the company has maintained throughout "dieselgate." And precisely that is VW's problem -- the constant attempts to dodge responsibility by blaming insignificant characters like the lobbyist Steg.
Company executives should be fully aware that this strategy is insufficient. In summer 2017, the U.S. Department of Justice appointed Larry Thompson as corporate monitor for VW. He and his team of around 60 people are keeping an eye on the company to ensure that both VW and Audi exhibit the appropriate diligence when it comes to clearing up the diesel affair.
Thompson has already presented some VW managers with guidelines for effective leadership. "In cases of misconduct," the guidelines say, then it is up to the company "to take responsibility."