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com­pu­ter and ac­ces­ses the OBD’s soft­ware that con­trols the ex­haust sys­tem with a pass­word.

Thousands of li­nes of com­man­ds and num­bers ap­pe­ar on the mo­ni­tor.“Cust­o­m­ers of­ten want us to turn off the par­ti­cu­la­te fil­ter,” says the tu­ner. The­re are se­veral re­a­sons for this. The fil­ter eats away per­for­mance, costs ad­di­tio­nal fu­el and on­ly lasts a coup­le of ye­ars with hea­vy dri­ving. “So we de­ac­tiva­te the so­ot fil­ter with the elec­tro­nic con­trol.” The tech­ni­ci­an wri­tes a coup­le of com­man­ds and — pres­to — the par­ti­cu­la­te fil­ter is in­ope­ra­ble.

With this con­trol sys­tem, a car will now ac­ce­le­ra­te fas­ter. But it al­so emits si­gni­fi­cant­ly mo­re car­ci­no­ge­nic so­ot. Ho­we­ver, it could end bad­ly for the dri­ver at the car’s man­da­to­ry tech­ni­cal in­spec­tion. The­re would be an en­try in the OBD’s me­mo­ry about the no-lon­ger­func­tio­n­ing fil­ter. But that, too, can be re­sol­ved with a few clicks. “I will now ma­ke su­re that no er­ror mes­sa­ge about the fil­ter is stored in the OBD’s me­mo­ry,” says the tech­ni­ci­an.

A few mo­re com­man­ds, and the ma­ni­pu­la­ti­on is com­ple­te. The tech­ni­cal in­spec­tors won’t no­ti­ce a thing.

What the car me­cha­nic does on a small sca­le, the die­sel ma­ni­pu­la­tors at Volks­wa­gen we­re prac­ticing in gi­ant di­men­si­ons. Parts of the ex­haust con­trols of the ma­ni­pu­la­ted cars on­ly func­tio­ned pro­per­ly du­ring emis­si­ons tests. But out on the road, ex­haust con­trols are par­ti­al­ly de­ac­tiva­ted — good for the car’s per­for­mance but bad for the emis­si­on of ni­tro­gen oxi­de.

And what about the OBD sys­tem that is sup­po­sed to re­gis­ter such tam­pe­ring? The loo­p­ho­le is that the OBD on­ly con­ta­ins a di­gi­tal trace if the emis­si­ons con­trol is un­a­vail­able or 100 per­cent dys­func­tio­nal. If it is on­ly par­ti­al­ly de­ac­tiva­ted, the OBD dis­plays not­hing. It is pre­cise­ly this trick that the ma­ni­pu­la­tors at Volks­wa­gen used.

The fact that Volks­wa­gen ap­pa­r­ent­ly outs­mar­ted the go­vern­ment in­spec­tors is one scan­dal. The ot­her - and big­ger - scan­dal is po­li­ti­cal. Mer­kel’s co­ali­ti­on go­vern­ment of the cen­ter-right Christian De­mo­crats and the cen­ter-left SPD de­ci­ded in 2008 that ins­tead of ac­tu­al ex­haust mea­su­re­ments, on­ly the OBD, which is sus­cep­ti­ble to ma­ni­pu­la­ti­on, was to be re­ad from that da­te on. Car dri­vers no lon­ger had to fe­ar ex­po­sure of their ex­ces­si­ve emis­si­ons du­ring the mil­li­ons of in­spec­tions car­ri­ed out each ye­ar.

Tie­fen­see, now eco­no­mics mi­nis­ter in the sta­te of Thu­rin­gia, said that he could not re­con­struct the de­ci­si­on ma­king pro­cess from me­mo­ry. We would ha­ve to look at the fi­les in Ber­lin.

In Ju­ne, 2013, Czech Pre­si­dent Mi­los Ze­man was vi­sit­ing Mer­kel in Ber­lin. A de­ci­si­on on the Eu­ro­pe-wi­de CO2 li­mits for cars — to be en­forced be­gin­ning in 2020 - was on the agen­da for the fol­lo­wing day in Brus­sels. Mer­kel had se­rious con­cerns that the de­ci­si­on would not be ma­de in the in­te­rests of Ger­man car­ma­kers.

Le­a­ders of the Eu­ro­pean Uni­on’s 28 mem­ber sta­tes we­re to gi­ve the nod to the draft

the next day. For com­pa­nies who­se car mo­dels tend to be small – such as Fi­at, Peu­geot, Re­nault or To­yo­ta – the li­mits don’t tend to be a pro­blem. But they are for Ger­man au­to­ma­kers li­ke BMW, Daim­ler and Volks­wa­gen, which pro­du­ce a much hig­her sha­re of big­ger cars.

In the eve­ning hours, Mer­kel re­ached for the pho­ne. The Irish pri­me mi­nis­ter, En­da Ken­ny, an­s­we­red. The two had known each ot­her for a long ti­me. Mer­kel had sup­por­ted Ken­ny, a mem­ber of the cen­trist Fi­ne Ga­el par­ty, in the 2007 Irish elec­tions. For Ken­ny, lea­der of a coun­try that was de­pen­dent on in­ter­na­tio­nal aid du­ring Eu­ro­pe’s debt cri­sis, Mer­kel was “a good fri­end.”

Now Mer­kel had so­me­thing to ask of him — and the pri­me mi­nis­ter was glad to ob­li­ge. As of­fi­cia­ting pre­si­dent of the EU Coun­cil, he took the al­re­a­dy-ne­go­tia­ted CO2 de­ci­si­on off the fol­lo­wing day’s agen­da wi­thout fur­ther ado.

Thanks to Mer­kel’s in­ter­ven­ti­on, the car in­dus­try was gi­ven ano­ther ye­ar to work on mee­ting the li­mits. The chan­cel­lor’s ac­tion per­ple­xed ma­ny. An SPD mem­ber of the Eu­ro­pean Par­li­a­ment, Mat­thi­as Groo­te, who at the ti­me was chair­man of the en­vi­ron­ment com­mit­tee in the Eu­ro­pean Par­li­a­ment, still talks to­day of “the chan­cel­lor’s bru­tal in­ter­ven­ti­on.”

Be­si­des pres­sing Ken­ny to gain an ad­van­ta­ge for the Ger­man car in­dus­try, Mer­kel al­so of­fe­red con­ces­si­ons to Bri­tish pri­me mi­nis­ter Da­vid Ca­me­ron on ban­king re­gu­la­ti­ons if he, in turn, would re­pre­sent the Ger­man po­si­ti­on on cars and igno­re his own en­vi­ron­men­tal ad­vi­sors.

Volks­wa­gen’s co­zy re­la­ti­ons­hip with go­vern­ment has an es­pe­cial­ly long his­to­ry. The sta­te of Lo­wer Sa­x­o­ny, whe­re VW’s head­quar­ters and big­gest fac­to­ry are ba­sed, owns 20 per­cent of Volks­wa­gen stock. Lo­wer Sa­x­o­ny po­li­ti­ci­ans li­ke sta­te go­ver­nor Ste­phan Weil and eco­no­mics mi­nis­ter Olaf Lies, both from the SPD, sit on Volks­wa­gen’s su­per­vi­so­ry bo­ard. Na­tio­nal-le­vel po­li­ti­ci­ans with clo­se ties to Lo­wer Sa­x­o­ny in­clu­de

Volks­wa­gen’s co­zy re­la­ti­ons­hip to go­vern­ment has an es­pe­cial­ly long his­to­ry.

Mer­kel’s vice chan­cel­lor and eco­no­mics mi­nis­ter Sig­mar Ga­b­ri­el, as well as for­eign mi­nis­ter Frank-Wal­ter St­ein­mei­er, both SPD.

If the li­ne to the go­vern­ment should threa­ten to break, the people at Volks­wa­gen’s head­quar­ters in Wolfsburg would know what to do. Du­ring Mer­kel’s se­cond term, Volks­wa­gen hi­red a for­mer go­vern­ment spo­kes­per­son, Tho­mas Steg, as its chief lob­by­ist.

One is re­min­ded of the banks, who, on­ce they reach a cer­tain si­ze, can ex­pect to be sa­ved by tax­pay­ers be­cau­se their col­lap­se might risk even grea­ter costs. “Too big to fail sud­den­ly ap­pears to ap­p­ly to the au­to­mo­bi­le in­dus­try as well,” says Mar­tin Häus­ling, a mem­ber of the EU Par­li­a­ment for the Ger­man Gre­ens.

Häus­ling says he is se­eing Ger­man go­vern­ment of­fi­ci­als talk down the Volks­wa­gen scan­dal whi­le— be­hind the sce­nes — try­ing to ral­ly Ger­man EU par­li­a­men­ta­ri­ans be­hind the com­pa­ny.“They are say­ing in Ber­lin that what hap­pe­n­ed is of cour­se em­bar­ras­sing, but it is a mat­ter of jobs. That the Ger­m­ans ha­ve to stick to­ge­ther in this.” Whi­le Ber­lin holds no di­rect sway over EU par­li­a­men­ta­ri­ans li­ke Häus­ling, of­fi­ci­als in the Ger­man ca­pi­tal are sen­ding a cle­ar mes­sa­ge to Ger­man re­pre­sen­ta­ti­ves in Brus­sels. Tho­se who op­po­se Volks­wa­gen will fall from gra­ce. In ot­her words: Not sup­porting Ger­man car­ma­kers could be dan­ge­rous to your po­li­ti­cal ca­re­er.

Big in­dus­try: Ger­man chan­cellors ra­re­ly miss an au­to show or chan­ce to pro­mo­te car­ma­kers ab­road.

Volks­wa­gen is cut­ting costs as it girds for fi­nes and re­calls af­ter its emis­si­ons-chea­ting scan­dal.

VW sa­les plun­ged in the U.S. fol­lo­wing the car­ma­ker’s ad­mis­si­on of rig­ged emis­si­ons tests. This ar­ti­cle ori­gi­nal­ly ap­peared in the bu­si­ness ma­ga­zi­ne Wirt­schafts­Wo­che. Mar­tin Sei­wert, Re­bec­ca Eis­ter, Jür­gen Rees, Franz Ro­ther, Gre­gor Pe­ter Schmitz,...

Ex-chan­cel­lor Ger­hard Schrö­der (right) had clo­se ties to Volks­wa­gen‘s then-CEO Fer­di­nand Piëch (shown he­re with his wi­fe).

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