FRANKFURT — When Volkswagen executives decided in 2006 to use software to evade emissions rules, they needed help. No one inside Volkswagen knew how to write the software.
So the company turned to one of its most trusted partners: the German supplier, Robert Bosch. Working from Volkswagen specifications, Bosch developed code that instructed computers in diesel engines to fully deploy pollution controls only when the cars were being tested in laboratories, according to lawsuits in the United States and Germany.
The code would form the basis for the so-called defeat devices, the illegal software installed on 580,000 Volkswagen, Audi, and Porsche vehicles in the United States that has forced the carmaker to plead guilty to fraud and pay more than $20 billion in fines and settlements.
The involvement of Bosch, one of the world’s largest auto suppliers, underscores the broad nature of the diesel deception, which stretched beyond the carmaker and involved dozens if not hundreds of people for nearly a decade. Bosch, on Wednesday, agreed to pay consumers in the United States $327.5 million as compensation for its role in devising the software.
Bosch did not admit wrongdoing as part of the settlement with Volkswagen owners and the Federal Trade Commission, which must be approved by a judge. The supplier still faces a criminal investigation by German prosecutors in Stuttgart, as well as multiple civil suits by Volkswagen owners in Europe.
Bosch said Wednesday it would “continue to defend its interests in all other civil and criminal law proceedings and to cooperate comprehensively with the investigating authorities in Germany and in other countries.”
Volkswagen held powerful sway over Bosch, based on the accounts in the lawsuits. The carmaker was one of Bosch’s biggest customers, with a relationship dating from the early days of the Volkswagen Beetle in the 1930s.
Bosch appears to have been profoundly nervous about its role supplying the Volkswagen software. In June 2008, Bosch wrote a letter demanding that Volkswagen agree to pay any penalties if they were discovered using a defeat device.
Software modifications requested by Volkswagen provided “yet another path toward potential input of data as a ‘defeat device,’” said the letter, which was submitted as part of an ongoing lawsuit by a Volkswagen owner in Germany. The letter went on to quote verbatim from United States and European laws prohibiting the devices.
“A supplier has practically no possibility to say ‘no,’ or they lose business from the biggest carmaker in the world,” said Kai Borgeest, a professor at the University of Applied Sciences in Aschaffenburg, Germany, who has testified as an emissions expert at the European Parliament.
Bosch argued that the letter was misinterpreted and applied to different engines than the ones programmed to cheat, according to a court document filed Wednesday as part of the proposed settlement.
In 2006, when Volkswagen began planning a push to sell fuel-efficient “clean diesel” in the United States, Bosch provided an innovative fuel injection system known as common rail, as well as a newly developed onboard computer called the EDC17. Bosch advertised in trade magazines that the new engine computer “makes an important contribution to observing future exhaust gas emission limits.”
But Volkswagen developers soon found that their catalytic converters and other pollution control equipment could not meet stricter emissions standards in the United States. The equipment would wear out too quickly if it operated continuously.
At a meeting in November 2006, Volkswagen managers and engineers developed a plan for how they could use software supplied by Bosch to recognize the telltale driving pattern used by regulators when they measured emissions inside special labs, according to the lawsuits and US authorities’ case against the carmaker. The software would instruct the pollution control equipment to fully deploy only when a test was underway. It dialed back the controls under normal driving conditions, causing the car to spew more toxic nitrogen oxides than a heavy-duty diesel truck.
Volkswagen did not have anyone at the time who could make the necessary changes to the software. So the company turned to Bosch to do the programming, according to the class-action lawsuits in the United States. Volkswagen engineers provided detailed specifications to Bosch, which wrote the necessary code.
Later, Bosch helped conceal the software from authorities, according to the class-action suits. It altered an onboard diagnostic system so it would not provide warnings that the emissions system was malfunctioning.
Denner said Wednesday that Bosch agreed to the settlement so it could focus on the transformation sweeping the auto industry.