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From the NY Times of 26 Sept 2015

As Volkswagen Pushed to Be No. 1, Ambitions Fueled a Scandal

Martin Winterkorn, Volkswagen's chief executive, took the stage four years ago at the automaker's new plant in Chattanooga, Tenn., and outlined a bold strategy. The company, he said, was in the midst of a plan to more than triple its sales in the United States in just a decade — setting it on a course to sweep by Toyota to become the world's largest automaker.

"By 2018, we want to take our group to the very top of the global car industry," he told the two United States senators, the governor of Tennessee and the other dignitaries gathered for the opening of Volkswagen’s first American factory in decades.

So he wanted to make profits rather than earn the number one spot by making better products. He was doing to VW exactly what Wantanbe had done to so harm Toyota and what Carly Fiorina did to do so much damage to HP in only four years. I was in the meeting where she also made similar statements.

How long did it take for business school philosophies to corrupt the product line? Ten years? Business school graduates see short term gain and ignore the long term consequences. Consequences do not appear on the spread sheets.

Volkswagen's current crisis has its roots in decisions made almost a decade ago. In 2007, it abandoned a pollution-control technology developed by Mercedes-Benz and Bosch and instead used internal technology.

Hubris.

While Volkswagen cheated behind the scenes, it publicly espoused virtue. This, after all, is the company that used one of the largest advertising arenas in the world, the Super Bowl, to run a commercial showing its engineers sprouting angel's wings.

Finally in April 2014, VW offered a software change to fix emissions on 2010 through 2014 VWs. It did not work. Their aggressive denials and accusations only made government investigators curious.

California regulators changed tack, examining the company's software. Modern automobiles operate using millions of lines of computer code. One day last summer, the regulators made a startling discovery: A subroutine, or parallel set of instructions, was secretly being sent by the computer to what seemed to be the emissions controls.

Regulators were floored. Could Volkswagen be trying something similar to what the heavy-truck industry did to manipulate emissions tests in the 1990s?

Regulators set out to cheat the cheat, tweaking lab test parameters to trick the car into thinking it was on the road. The Volkswagens began spewing nitrogen oxide far above the legal limit.

Government officials then increased the pressure on the company, threatening to withhold approval for its 2016 Volkswagen and Audi diesel models. According to the E.P.A., that is what forced Volkswagen's hand. On Sept. 3, a group of senior engineers admitted what the regulators had suspected: The company had installed defeat devices on nearly 500,000 diesel vehicles sold in the United States. In a presentation, they admitted that the software subroutine had been added to vehicles going back to the 2009 model year, when Volkswagen's "clean diesel" arrived in America with promises of an environmentally friendly future.

"It was the repeated answers that did not add up that really led to the discovery of the problem in the first place," Mr. Young said. "They were kind of hoisted on their own petard."

The revelations were so stunning that some executives at Volkswagen Group of America were kept in the dark about the pending E.P.A. violation until just before it was announced, according to two people familiar with the situation who spoke on condition of anonymity.

This month, Volkswagen and Audi executives in Herndon, Va., began pressing executives in Germany for information about the delay in certifying the 2016 models for sale. The absence of details was already hampering plans for product introductions at United States dealerships.

But there was no explanation from Germany - until just before the E.P.A. announced the violation of the Clean Air Act.