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Green Suicide: German Car-Makers Face Existential Crisis After Betting On ‘Green’ Diesel

The Daily Telegraph

“Against the backdrop of the diesel scandal, illegal agreements amount to a nuclear meltdown for the German car industry’s credibility.”

At the Mercedes-Benz museum in Stuttgart, the prize exhibit is the Benz Patent-Motorwagen of 1885, the first car ever made. It is a potent symbol for a car industry that is not just the jewel in the crown of Europe’s biggest economy, but which remains a source of deep national pride in modern Germany.

But behind the carefully maintained facade, all is not well in Stuttgart. Urgent meetings are underway at Mercedes and at its rival Porsche on the other side of town. Similar discussions are underway across Germany at BMW, Audi and Volkswagen. Because it became clear this week that the German car industry is facing its worst crisis of modern times.

In the US, lawyers filed a case against Germany’s “Big Five” carmakers this week, accusing them of breaking US competition laws in what could become a class action lawsuit. Legal experts are already talking about billions of dollars in potential damages.

The carmakers are already under investigation by European Union and German authorities over allegations they operated a cartel and colluded over what technology to offer their customers, leaving them facing potential fines running into billions of euros.

The five companies — Audi, BMW, Daimler, Porsche and Volkswagen –  are accused of holding regular, secret meetings at which they are alleged to have fixed standards and prices of components for in order to gain competitive advantage.

The cartel investigation comes at the worst possible moment for the German car industry, just as the diesel emissions scandal which hit VW two years ago has suddenly spread and engulfed several other leading brands.

The German transport minister ordered the compulsory recall of 22,000 Porsche diesel cars on Thursday, after it emerged their engines had software fitted to cheat emissions tests.

Daimler, the company which makes Mercedes, announced the voluntary recall of 3m cars last week over diesel emissions, while Audi recalled 850,000.

Most damaging of all are allegations that it was an agreement by the cartel to limit real clean emissions technology which led to the companies cheating tests.

The series of events has left Germany’s carmakers facing a perfect storm. “The beginning of the end of our car industry”, Bild, Germany’s highest-selling newspaper, asked in a headline this week.

Fritz Esser, a leading columnist, compared the crisis facing the industry to the collapse of coal mining in Germany, which saw the number of miners drop from 350,000 in 1980 to just 28,000 today.

“It is possible the car industry could go the same way. That one day we will look back to 2017 and say, that was the year it changed,” he wrote.

The German car industry currently accounts for a fifth of the country’s exports and employs more than 800,000 people. Daimler recently announced an annual profit of €2.5bn (£2.2bn). But experts say the damage to the industry is not being overstated.

“A possible car cartel is anything but a minor offence, it could result in fines of billions of euros,” Prof Stefan Bratzel of the German Centre of Automotive Management says.

“Against the backdrop of the diesel scandal, illegal agreements amount to a nuclear meltdown for the German car industry’s credibility.”

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How the Kyoto Protocol and Europe’s climate hysteria led to its suicidal Dieselgate 

After the Kyoto treaty, Europe’s entire auto industry was led down the primrose lane of adopting a technology that now appears to be a commercial and regulatory dead-end.

Virtually everyone agrees Europe’s “dash for diesel” was a monstrous policy error, not to mention the proximate cause of the emissions-cheating scandal that has engulfed Volkswagen and other auto makers. Yet the overarching imperative today is to vilify the car companies and insist they do better at achieving meaningless reductions in CO 2 emissions, now by forcing them to build electric cars that customers must be bribed and pressured into buying. Not to be questioned, though, is the green agenda or the competence of Europe’s political class.

Image result for Green diesel cartoon GWPF