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VOLKSWAGEN’S “DEFEAT DEVICE:” UPDATE AND IMPLICATIONS FOR CALIFORNIA
Senate Transportation and Housing and Environmental Quality Committees Joint Oversight Hearing

Full testimony by CALPIRG on March 8, 2016: 

My name is Emily Rusch and I am the Executive Director of CALPIRG, the California Public Interest Research Group. We have a long history of working to protect consumers in the marketplace. 

We were as shocked as anyone to learn that Volkswagen had intentionally misled air regulators and its customers, advertising their cars as “clean diesel” when in fact these cars were emitting as much as 40 times the legal limit of smog-forming pollutants.

Days after news reports came out about VW’s deliberate lies, we launched a national campaign with other state PIRGs calling on VW to offer to buy back all affected diesel cars from their customers at the full original purchase price. 

VW cheated customers in selling them a product that was different than advertised. These cars were illegal. There is no easy fix to the problem. They should offer to buy the product back. Over 20,000 people have signed onto our petition to Volkswagen.  

The consequences of the defeat device are very personal for consumers, including many of our members who bought these cars. In fact, two members of CoPIRG in Colorado, Elisabeth Caspari and Marcus Moench, saw our campaign in the news and contacted us – they, like many others we’ve heard from, purchased their 2011 Jetta Sportwagen TDI because of VW’s promises of a low carbon emitting, high performance vehicle. They were so outraged and dismayed to learn that their car was not the clean air vehicle that they thought it was, that they made a cross country road trip to VW’s corporate headquarters in Herndon, VA to return their car and deliver our petitions this January. 

VW would not take back their car, nor have they responded to petitions from our members, in particular our call for full buybacks. All VW has done is offer $1000 in gift cards. This is insulting to consumers.

If a company produces a product that is defective, it should buy it back. If a company lies about what is in its product, it should buy it back. If a company tricks its customers into unwittingly polluting our air, it should make up for that pollution. It has been more than five months since the scandal broke and VW still hasn’t made any of these commitments to the cutomers it lied to. Nothing is stopping the company from offering right now to buy back any cars from consumers. 

We commend CARB and the EPA for their work pushing the company to fix the vehicles, but want to underscore that fixing the cars alone is not good enough. VW not only admits it broke the law. They ripped off hundreds of thousands of consumers who thought they were buying clean vehicles. And they put our health at risk — emitting as much as 40 times the legal limit of smog-forming pollutants. Recalls would likely decrease performance and fuel efficiency, and their bluebook value is likely to further decrease. The only way to make customers whole again is for VW to buy back all affected cars at full original purchase price. If CARB and the EPA determine a viable fix that complies with our laws, VW should still offer full buybacks to all of its affected customers that want one.

In addition to demanding that the company offer to buy back the cars, we have the additional following policy recommendations: 

1) The EPA and CARB should demand the maximum penalties allowed by law, based on the very real public health consequences of VW’s actions. 

2) Auto industry lobbyists have won and defended a loophole in the law that makes it harder to prosecute their executives for intentionally violating the law and putting the public at risk. Congress must close the auto industry’s "get out of jail free" loophole.

3) The Department of Justice should make sure there are no tax write-offs in any settlements related to this wrongdoing. Paying for misdeeds should not be a tax write-off, but that’s what has happened with the financial industry, BP, and many other high profile settlements. 

4) The Department of Transportation should enforce strong federal fuel efficiency standards.

Thank you for allowing the opportunity to speak before you today. We hope that you will join us in the call to make sure VW pays for their illegal behavior and makes their customers whole. 

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