Built to Cheat

Los gobiernos querían reducir las emisiones de CO2.

Governments wanted to reduce CO2 emissions.

El diésel produce menos CO2 que la gasolina.

Diesel produces less CO2 than gasoline.

Pero produce más otras cosas malas, como el óxido de nitrógeno, que es muy peligroso para la salud.

But it produces more other bad things, like nitrogen oxide, which is very dangerous for health.

Nitrogen oxide.

NOx.

This is the stuff that causes respiratory disease, worsens asthma, contributes to smog.

And it turns out the cars people were driving every day in European cities were pumping out far more of it than the official tests showed.

En Madrid, en Barcelona, en muchas ciudades españolas, la calidad del aire era un problema serio.

In Madrid, in Barcelona, in many Spanish cities, air quality was a serious problem.

La gente se enfermaba.

People were getting sick.

Y durante mucho tiempo nadie sabía exactamente por qué los niveles de contaminación eran tan altos.

And for a long time nobody knew exactly why pollution levels were so high.

And when we say people were getting sick, we're not talking about headaches.

Studies in the UK estimated that illegal NOx emissions from diesel vehicles caused tens of thousands of premature deaths a year across Europe.

That's the backdrop to this court case.

Por eso la decisión del tribunal esta semana es tan importante, y tan polémica.

That's why the court's decision this week is so important, and so controversial.

Mucha gente esperaba que las empresas pagaran por el daño que causaron.

Many people expected the companies to pay for the harm they caused.

Pero el juez dijo que no, que la mayoría de las estrategias que usaban no eran ilegales.

But the judge said no, that most of the strategies they used weren't illegal.

Which raises the question I always end up at with these cases.

Were they technically legal, or did the law just not have good enough definitions to catch them?

Esa es exactamente la pregunta.

That's exactly the question.

Las empresas decían que sus estrategias eran para proteger el motor, no para engañar a los inspectores.

The companies said their strategies were to protect the engine, not to deceive inspectors.

El juez aceptó ese argumento en la mayoría de los casos.

The judge accepted that argument in most cases.

I've heard that defense before.

In a completely different context.

'We were protecting the institution, not covering up the problem.' It's a very old move.

Sí, pero hay una diferencia importante entre este caso y el caso de Volkswagen.

Yes, but there's an important difference between this case and the Volkswagen case.

VW claramente programó sus coches para detectar las pruebas.

VW clearly programmed their cars to detect the tests.

Eso era más obvio, más difícil de defender.

That was more obvious, harder to defend.

Con estos otros fabricantes, la situación era más complicada.

With these other manufacturers, the situation was more complicated.

More complicated, or more cleverly designed to be deniable?

Those aren't the same thing.

Fletcher tiene razón en algo, aunque no me gusta admitirlo.

Fletcher is right about something, even though I don't like admitting it.

Cuando una empresa diseña un sistema que parece legal pero tiene el mismo efecto que algo ilegal, eso es un problema serio.

When a company designs a system that looks legal but has the same effect as something illegal, that's a serious problem.

I'll take the win quietly.

Now, walk me through the financial side of this.

Because these cases cost a lot to bring, and a lot of the claimants were ordinary car owners, not institutional investors.

Exacto.

Exactly.

En el Reino Unido, había casi un millón de propietarios de coches que querían demandar a estas empresas.

In the UK, there were nearly one million car owners who wanted to sue these companies.

Decían que sus coches perdieron valor cuando salió el escándalo.

They said their cars lost value when the scandal came out.

Que pagaron por algo que no era lo que prometían.

That they paid for something that wasn't what was promised.

A million people.

That's not a niche complaint.

That's a large fraction of the UK car-owning public feeling defrauded.

And the court mostly said: not our problem.

Bueno, no exactamente.

Well, not exactly.

El tribunal dijo que algunas cuestiones específicas de daños pueden ir a un segundo juicio.

The court said that some specific damages questions can go to a second trial.

Así que la historia no terminó completamente.

So the story didn't completely end.

Pero sí, la mayoría de las demandas no tuvieron éxito.

But yes, the majority of the claims didn't succeed.

Let's talk about what this ruling does to the companies' shares and their forward planning.

Because there's been an enormous cloud over the European auto industry for eleven years now.

Does this clear it?

Parcialmente.

Partially.

Las empresas estaban muy preocupadas por estos casos.

The companies were very worried about these cases.

Stellantis, por ejemplo, ya tiene muchos problemas financieros.

Stellantis, for example, already has a lot of financial problems.

Renault también.

Renault too.

Una gran condena podía ser catastrófica para ellas.

A large conviction could have been catastrophic for them.

Stellantis is in rough shape, that's true.

They own Fiat, Peugeot, Chrysler, Jeep, Maserati, Citroën, Vauxhall.

And they've been struggling with the EV transition, declining sales in North America, factory closures.

A billion-euro liability on top of all that would have been brutal.

Y aquí está el problema más grande para mí.

And here's the bigger problem for me.

Todas estas empresas ahora tienen que invertir muchísimo dinero en coches eléctricos.

All these companies now have to invest huge amounts of money in electric cars.

Pero el escándalo diésel destruyó la confianza de los consumidores en sus promesas sobre el medio ambiente.

But the diesel scandal destroyed consumer trust in their environmental promises.

That's the piece of this I find genuinely fascinating.

You lied about how clean your product was for a decade.

Now you're asking people to trust you when you say your new product is clean.

Why would anyone believe you?

Eso es real.

That's real.

Cuando Volkswagen lanzó sus primeros coches eléctricos, muchas personas en Europa decían: 'No me fío.

When Volkswagen launched its first electric cars, many people in Europe were saying: 'I don't trust them.

Ya mintieron antes.' Y las ventas fueron más difíciles de lo que esperaban.

They already lied before.' And sales were harder than they expected.

And there's another layer to this, one I kept thinking about while I was reading the ruling.

The emissions testing system that these companies exploited, it was designed by regulators.

It was the regulators' tests that were gamed.

So there's a question of whether the institutions that were supposed to prevent this were sophisticated enough to do so.

Después de 2015, Europa cambió completamente el sistema de pruebas.

After 2015, Europe completely changed the testing system.

Antes era una prueba en laboratorio, muy controlada, muy artificial.

Before, it was a laboratory test, very controlled, very artificial.

Ahora los coches tienen que demostrar sus emisiones en condiciones reales, en la carretera.

Now cars have to demonstrate their emissions in real conditions, on the road.

Which should have happened thirty years earlier, but here we are.

The lab test was always a fiction.

Everyone in the industry knew the numbers on the sticker weren't the numbers you'd see in daily driving.

Es verdad.

That's true.

Y no era solo las emisiones.

And it wasn't just emissions.

Los números de consumo de gasolina también eran muy diferentes en la realidad.

The fuel consumption numbers were also very different in reality.

Pero nadie hablaba de eso porque era conveniente para todos, para las empresas y para los gobiernos.

But nobody talked about it because it was convenient for everyone, for the companies and for the governments.

That's the part that I think the business history books will find most interesting about this era.

Not just that companies cheated, but that the whole system had comfortable fictions built into it, and nobody wanted to pull that thread.

Y ahora el hilo se está tirando, pero muy despacio.

And now the thread is being pulled, but very slowly.

Esta sentencia en Londres es un ejemplo.

This verdict in London is an example.

Hubo un gran escándalo, una investigación enorme, años de procesos legales, y al final la mayoría de las empresas no pagaron casi nada.

There was a huge scandal, a massive investigation, years of legal proceedings, and in the end most of the companies paid almost nothing.

Which brings me to where this goes next.

Because the second trial, the one the court has allowed on specific damages, that's not nothing.

There's still a path for some claimants to recover something.

And there are similar cases in other European jurisdictions that haven't concluded yet.

En Alemania, en Francia, en España también.

In Germany, in France, in Spain too.

El problema es que en Europa cada país tiene su propio sistema legal.

The problem is that in Europe each country has its own legal system.

Lo que pasa en un tribunal en Londres no significa lo mismo en un tribunal en Madrid.

What happens in a court in London doesn't mean the same thing in a court in Madrid.

One thing I keep coming back to, and maybe this is the former foreign correspondent in me, is that the story got cracked open not by European regulators but by a small research team at a West Virginia university doing independent testing.

If they hadn't published their findings in 2014, none of this happens.

Eso es muy importante.

That's very important.

Los reguladores europeos sabían que había problemas, pero no actuaron.

European regulators knew there were problems, but didn't act.

Fueron investigadores independientes, con financiación de una organización no gubernamental, los que descubrieron la verdad.

It was independent researchers, funded by a non-governmental organization, who discovered the truth.

Eso dice mucho sobre cómo funciona el control de las grandes empresas.

That says a lot about how oversight of large companies works.

Or doesn't work.

Alright, I want to flag something you said a few minutes ago, because it tripped me up.

You used the word 'demandar' and at first I thought you meant 'demand' as in, demanding something.

But that's not what it means, is it.

No, no.

No, no.

'Demandar' en español significa llevar a alguien a un tribunal, presentar una demanda legal.

'Demandar' in Spanish means to take someone to court, to file a legal claim.

Si digo 'voy a demandar a esa empresa', significa que voy a presentar una demanda contra ella en un tribunal.

If I say 'voy a demandar a esa empresa', it means I'm going to file a lawsuit against that company in court.

So it's a false friend.

In English, 'demand' means you want something urgently.

In Spanish, 'demandar' means you're suing someone.

A learner could make a very unfortunate error there.

Exacto.

Exactly.

Si quieres 'exigir' algo, la palabra en español es 'exigir'.

If you want to 'demand' something, the word in Spanish is 'exigir'.

Por ejemplo: 'Exijo una explicación.' Pero si presentas un caso en un tribunal, 'demandar'.

For example: 'Exijo una explicación.' But if you file a case in court, 'demandar'.

Son dos cosas completamente diferentes.

They're two completely different things.

So in this episode, nearly a million people 'demandaron' Ford, Mercedes, Nissan, Renault, and Stellantis.

They sued them.

They didn't 'demand' anything from them in the English sense.

Though, honestly, given what those companies did, a bit of demanding would have been warranted too.

Sí, 'exigieron' y 'demandaron' al mismo tiempo.

Yes, they 'exigieron' and 'demandaron' at the same time.

Y el tribunal dijo que casi todo estaba bien.

And the court said almost everything was fine.

Para mí, ese es el resumen perfecto del escándalo diésel.

For me, that's the perfect summary of the diesel scandal.