towns and villages surrounding the peak have been alerted. the volcano has been dormant for several years and became increasingly active two years ago. plenty more for you any time on our website. the address is www.aljazeera.com. is it the end of the story for volkswagen? it's only the beginning of the earthquake shaking the world's largest car brand, german industry, and its reputation worldwide. vw's emissions admissions is the

inside story. welcome to inside story. i'm ray suarez. auto makers worldwide have been under pressure to find a few different holy grails. one, to design engines that power trucks and automobiles while using less energy. the other, to make vehicles that pollute less while doing it. volkswagen delivered stunning numbers by teaching the engine how to line. now the ceo has resigned in disgrace, stocks have been battered, and one of germany's most valuable brands is badly damaged. lisa stark takes a look at an auto scandal kicking into high

gear. >>reporter: earlier this year, volkswagen reached the top of the mountain as the world's biggest car seller. now the giant of german auto manufacturing is in a free fall. >> this is a massive scandal that not only cheated consumers but also harmed the environment. >> vw installed sophisticated software to cheat on u.s. emissions test. they tested clean but really was over the allowable limit by 40% of nitrous oxide. >> this stuff didn't happen by accident. that's a character crisis. >>reporter: the scandal has already claimed vw's ceo now under investigation by german

officials. the new ceo has promised to win back the trust of the public. most made from 2009 to 2015 are affected. 11 million worldwide. the u.s. now has beened sales of new models as well as sweden. other countries may follow suit. >> vw marketed them as peppy and fun. >> we need resuscitation. >> and in a 2010 ad, they emphasized green technology. the tag line, truth in engineering. the big question is who knew about deception and when. >> no one respects a company that deceives anybody. >>reporter: jack fitzgerald has been selling cars for more than

50 years. he doesn't excuse what vw has done but says he gets a lot more riled up over toyota's unintended acceleration and honda's defected air bags. that has cost lives. >> people getting injured is far more significant than whether the epa is satisfied with the amount of emissions in some diesel engine. it just is. >>reporter: but vw is in legal hot water. facing fines of up to $18 billion. class action lawsuits and investigations overseas and by the u.s. justice department. >> people need to to to jail. this is one of the most comprehensive and complex frauds i've ever seen in the united states >> now, adding to the outrage, vw is a serial offender. they were fined back in 73 and 2005 for violating the clean air act. vw admitted no wrong doing.

and they're not the only ones. the epa has fined the makers of large diesel trucks and other car manufacturers including honda, ford, and gm. the government relies on car companies to do its own compliance testing with standards and the epa does spot checks. the agency is now promising to increase its checks. pat moore joins us now. he's been covering the vw story. how did this first come to light that the car company was engineering deceit into its engines? >> sure thing. this started about a year ago when a small group out in d.c. called the international center on clean transportation commissioned some researchers at the west virginia university to test these cars. they were expecting to find good results and they wanted to show that diesel could be a clean

auto technology. obviously what they have found has really shaken that belief. and after a year of talking to california and federal regulators, vw admitted that some 11 million cars around the world were installed with this technology. >> they've already pulled the diesel cars out of their product lines. you can't find them there. what has the company said to american consumers who are driving around half a million strong in these vehicles? what do they intend to do? >> sure. that's a good question. basically they intend to fix the vehicles but the real question is how they'll go about doing that. they said actually today they would present a plan by the end of next month but what remains to be seen is what that will do to the cars. the fuel efficiency and the power which is a big selling point for these cars. and people are worried that what

they propose to fix could hurt resale values. >> i guess the congress has already made it clear it wants to hear from volkswagen as well? >> sure. yeah. tlts been a lot of talk -- there's been a lot of talk from law makers and regulators around the u.s. and the world. they won't get off easy here. >> is there any parallel? are there cases where it's not merely a product defect but an intentional plan to deceive regulators. is there a parallel to this vw case. there's not a lot of one. there are cases obviously as was mentioned earlier where the epa has come in and fined auto makers but the big recall that we hear about on the news, they really have to do a company making a mistake or having some defect in a car. the deceit here certainly makes this case pretty unique. >> pat moore is a contributing reporter for the "washington

post." thank you for joining us this is hardly the first time a car company's gotten into trouble. just recently, general motors has been in hot water over fatally faulty ignitions. are these not of a design flaw but of a product purposely engineered to deceive something different? stay with us. it's inside story.

>> vw's emission admissions on the program. they were stars in the automotive world helping speed the growth of diesel in private automobiles in the u.s. like the one that took root in europe over 20 years ago. there are some half a million tbi equipped autos in the united states and millions more across the world not only wearing the vw badge but branded as spanish -- audis. how did the company get away with lying so much? one estimate says the vw autos probably belched 11 million tons more pollutants into the world's air than they would have you believe. joining me now is dan carter and

stanley young, director of communications for the california environmental protection agency air resources board. dan carter, the fuels themselves are different. the engines are different. but what's different about what comes out of a tail pipe between a gasoline engine and a diesel engine. >> the pollutantses that -- pollutants are -- >> i understand that co 2 is less of a problem with diesel but the nitrogen related ox ten compounds are more of a problem? >> yeah. particularly when you're looking at preknocks in par --

particulate control and lower co2 due to an efficiency gain than in gasoline engines. >> so the particles coming out are pretty small in the case of diesel, aren't they? >> yes, very small and they've implemented traps and those are very good at trapping those. in fact, you know, at least 95% of those particles are trapped and that efficiency goes up as the trap is operated. >> stanley young, has the u.s. government basically been taking car makers' word for it on the stats of emissions and mileage? >> well, a lot of this involves a degree of faith in data. they went us with the data for the certification of the engines

and cars and we do testing on a certain percentage, something like tax returns. not every tax return is vetted. and that's the similar case because we depend on the data that the manufacturers provide for us. >> is that because of the cost, stanley young? >> yes. and there are many, many models anden gee families. so we can only do a certain spot check. >> you know, there were a lot of promises made about that engine. when somebody comes out with a product that sounds almost too good to be true, does that attract more attention? does somebody say, wow, i got to see if that's really what's happening in that engine? >> well, we certainly put these cars through their paces. on the test bench. and that's the crux of the problem. on the test bench, they performed immaculately over and over again, every single model

and consequently under the rules, it was thanks to very good verge work that west virginia did that we discovered that the on road emissions were very high and we decided to begin holding meetings with volkswagen to address the issue for the cars that were in california. >> dan carter, how did you find them out if the specific design was to deliver a cleaner emission when it was being checked? that was what the software was designed to do. >> we used a technology called portable emissions measurement systems. this has been around since -- actually the whole sector was kind of pioneered here at wvu during the consent decree so if you want to think of it as laboratory equipment that you can place on board the car and actually measure the emissions of the vehicles as they're driving down the road.

real world conditions. >> and it was that real world condition that didn't kick on the software design that was meant to run the engine cleaner when it was being screened? ? yeah. we saw a considerable difference between the emission levels produced during highway operation and those produced in the laboratory at the labs. >> ray, i, what happened is when we got those results from west virginia, we took the baton and we carried it on because we went directly to volkswagen and we said how do you explain what's happening here? this incredible discrepancy between the test bench and the real world emissions. and over the period of about a year we continue wally came back to them and it was actually dogged detectivive work like an onion layer by layer we peeled it back until we were able to

reveal the fact that there was what's known as a defeat device inside the software. >> i was just driving in california over the weekend, i saw a lot of volkswagens on the road. is there a cumulative burden that individual states have had to take from the fact that these cars lied to them? do you even have a ballpark fig your stanley young on what that might have been. >> we're developing an inventory of the excess emissions that we got and that's a very important part of our ongoing effort to engage in enforcement action. our top priority is to make sure these cars are cleaned up, fixed, and run as well as the tests that they delivered in the lab. >> dan carter, does this call into question whether diesel has been a benefit at all after all the ballyhoo about its clean operation? >> absolutely not. i think this is an issue of certification results not

matching real world results. we saw the bmwxi perform very well. it was at or below the emission standard levels. >> dan carter directs the center for alternative fuels, engines, and emissions at west virginia university. stanley young is the director of communications for the epa's air resources board in california. thanks for being with us, gentlemen. go to the volkswagen website and you'll see not a mention of diesel engines. the made in germany label, a world standard for manufacturing excellence has likely taken a beating. what should vw, a massive multinational producer do to recover? stay with us. it's inside story.

volkswagen has been in trouble before. bribery. prostitution. an uncomfortable light. but those earlier scandals are very different from disclosures that move beyond sleazy executive. but if you question the quality, the reliability, the design of the auto itself, that's something else again. gene, you want to keep the customers that you've already got and get people who are in other cars out of them and into your product. this would seem like a tough time to do that for volkswagen. >> they've got a big challenge ahead no doubt about it. but part of it is optics when

you think about it. primarily it's follow through. are they going to be able to deliver on the promise of making those cars comply with the standards. if they can do that, i think volkswagen can come pack and i think -- back and i think the reason is we don't have a question of the reliability or quality or engineering of the cars. there's no fatalities or direct injuries as a result. with that, i think that as unusual as this is that it's a planned deception as people have been calling it, still the underlying quality of the car is not in question. >> but companies' behavior in the month after these disclosures sends a signal to the public that can besides the quality of the car make people not want to do business with you, no? >> right. and that's why i say part optics but largely follow through. one of the first things that

they need to do with a new ceo, they need to assign somebody, a human face. who's responsible for the investigation here. an outsider or perhaps someone inside the company and when they do find out who is responsible, they need to fire them, aid in the prosecution of those individuals to demonstrate they're willing to follow through and are trustworthy again. >> when the bp blowout in the gulf of mexico not only killed 11 people which was awful on its own but then fouled the gulf of mexico pretty extensively, the company fell on its sword and started to spend all this money but behind the scenes it was fighting not to spend money and eventually the public found that out. does that undermine sincerity? can volkswagen convince the public it understands what it

did wrong? you can't talk your way out of something you behaved your way into. they behaved themselves into a tough spot here so now they have to behave themselves out of it. again, following through. being transparent. aid in the prosecution, find those people. make them whole again. another key point lost is the dealers. the dealers are the front line for a consumer. when you go into a volkswagen dealership, you're going to have questions and concerns. they need to be prepared with answers. have videos in in the show room like toyota did. they have to mount a global advertising campaign that shows trustworthiness. and one key element i think is they need to find spokes people for the different market they're in. in the united states they need to find the face of an american who can go on and do interviews like the one we're doing now and

talk in straight forward terms about volkswagen's commitment. >> does the fact and you anticipated my next question. that this is a vast multinational corporation with manufacturing and distribution all over the world, is that a strength or weakness when you've got something like this? it's got a lot of arms, a company this big. >> if they manage this directly, it can be a direct strength. one thing bp didn't do was spend time with regulators in meatings publicly and privately, assuring them, building ashiness with the people like the united states and regulators. volkswagen needs to invest time, effort, an money in making sure they have allies so that they have a stake too financially or otherwise. if they fail to do that, then they're in deeper trouble than they're in now. >> if the new guy who just took over for the departed ceo asks

you, gene, how long should i figure this is going to take? how much time do we have to anticipate this taking? until the dust is settled. >> mr. mueller needs to prepare for years of this. it's a long road back. people need to be assured and apologized to over and over again. the apology is just the start. follow through on a commitment but then demonstrating both financially and demonstration of actually fixing the problem is what does it. one of the optical things that i think is important is they need to announce they've set aside as bp did 15, 20 million whatever

it takes to put these car owners at ease that they're secure again. that's something the public can fixate on and point to and say there's something that the company is doing. they need to do that over and over every chance they get. >> meaning you, vw driver, won't get stuck with a lemon. thanks for joining us, gene. i'll be back in a moment with a final thought on trust, regulators, and results. stay with us. it's inside story.

one of the most frequently recurring fights between auto makers and governments had to do with the window sticker. you may have noticed they've evolved over time and when you look at that sheet of statistics, it can provide a yard stick for comparing one car to another. or does it? one thing that's come out over the past week is that american

regulators knew european testing was so inaccurate that it could overstate engine efficiently in some cases by 40% and once those cars make it to the united states as we heard, there's no attempt to systematically check them. the epa checks at random after the fact. the consequences of the cheating look likely to be enormous in the vw case and cheating won't bring leniency from the regulators but even more effort to check claims on efficiency, mileage, and more. their self-inflicted wound exposed so quickly will open the door to new systems, new engines, and new competitors. you can't spell kharma without

car. well, you know what i mean. i'm ray suarez, and that's the inside story. >> this is aljazeera america, live from new york city. i'm richelle carey, and tony harris is on assignment. the u.s. fights back after the taliban captures a strategic city. >> . >> whatever it takes, president obama is pledging full support to the world in his fight against isil. delayed, a new trial date set for the officers charged in freddie gray's d