WASHINGTON (CN) - It was just 10 days before regulators exposed emissions-cheating software in Volkswagen's diesel cars that the automaker's top executive learned about the problem, president and CEO Michael Horn told Congress Thursday.
Horn's appearance in Washington comes about a month after the Environmental Protection Agency revealed that certain Volkswagen's diesel cars contained emissions-cheating software that sprang into action when the vehicles were undergoing emissions tests.
Such tests triggered a function that lowered the car's nitrogen oxide emissions by up to 40 percent, allowing the cars to pass the tests despite not actually meeting emissions standards.
Though Horn said he was aware of possible problems with Volkswagen diesel cars' emissions in spring 2014, he insisted that he did not know about the so-called defeat device until Sept. 3, just 10 days before the EPA announced the finding.
A study by West Virginia University published in 2014 revealed the noncompliance, but not the presence of the defeat device, Horn told the committee.
Expressing remorse for the company's use of the software, Michael Horn told the House Energy and Commerce Subcommittee on Oversight and Investigations that Volkswagen has withdrawn its applications to certify its 2016 vehicles.
The software was present in roughly 480,000 Volkswagens, a figure Rep. Tim Murphy, R-Pa., pointed out represents 0.2 percent of the cars on the roads in the United States.
"At root, the behavior to which VW admitted represents a fundamental violation of public trust," Murphy said in his opening statement. "And the reverberations of this violation can be seen across the United States and across the world as people grapple with the implications. We need to develop a clear understanding of the facts and circumstances surrounding this case. And this hearing will be a first, important step towards that goal."
Horn insisted upper management in Volkswagen was not aware of the scheme, and that it was only certain people knew about the work-around. Volkswagen has suspended three people during its initial investigation, Horn confirmed without naming names.
He assured lawmakers that an internal investigation was underway, and that the company would soon know how the defeat devices ended up in the cars.
"What I've learned is some people have made the wrong decisions to get away with something that wouldn't be found out," Horn told the committee
Members of the committee were not convinced, however, such a large-scale event could be the doing of a couple of rogue software engineers.
"Either your entire organization is incompetent when it comes to trying to come up with intellectual property, and I don't believe that for a second, or they are complicit at the highest level in a massive cover-up that continues today," Rep. Chris Collins, R-N.Y., told Horn.
Horn said the company has considered a number of ways to compensate dealer-owners of cars with the defeat devices, including refunding people who bought the cars and giving them rebates for lost value. He insisted, however, the company would not be willing to buy back dealers' inventories, and that Volkswagen plans to fix the cars.
He also said the company has prepared to pay 6.8 billion euro as part of an expected fine. Collins warned him this would not be enough, and that his estimates were off by an "order of magnitude."
Representatives on both sides of the aisle criticized Volkswagen's use of the defeat devices as dishonest deceptions of consumers.
"We are here today because Volkswagen lied," Rep. Frank Pallone, D-N.J., said. "They lied to regulators, they lied to its customers, and they lied to the American people."
After two-hour recess during which time House Majority Leader Kevin McCarthy surprisingly dropped out of the race for speaker, the Volkswagen hearing resumed with EPA representatives laying out their plans to investigate and punish Volkswagen.
"As part of the investigation, we intend to assess the scope of VW's liability under the Clean Air Act, and whether there are additional vehicles with defeat devices," Chris Grundler, director of the EPA Office of Transportation and Air Quality, told the committee in a prepared statement. "We intend to assess the economic benefit to VW of noncompliance and pursue appropriate penalties, as well as assess the excess pollution from VW's violations and appropriate ways to mitigate that harm."
Murphy told reporters after the hearing he expected more hearings on the topic in the near future. When asked if he would support changes to the Clean Air Act to help better enforce standards and punish companies that break them, Murphy would not commit.
"I don't know yet, let's see where the facts take us," Murphy said.
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