Could members of the media please move out of our way so we can begin the hearing . Mr. Horn, you can sit in that chair. Thank you. Thank you and good morning. We now convene this hearing of the oversight and investigation subcommittee on volkswagen emissions cheating allegations, initial questions. Let me start off by saying my first car was a volkswagen. It was a 76 beetle. I learned a lot about cars. I could take that thing apart continued to work. I did all the maintenance myself because volkswagen had a legacy as the peoples car to be people friendly. I loved that car. Loved it a lot. Not so much as to call it brad, but i loved that car. But i trusted the car to get me around. I trusted volkswagen would continue to build a reliable car. That word trust alone as you know is the key factor in Building Customer loyalty. That trust is what helped build volkswagen because we believed its company looked out for customers first. Then three weeks ago car owners around the world were shocked to learn that volkswagen admitted it installed software for a number of years in millions of its diesel models that effectively defeated emission controls during routine driving. This followed the Environmental Protection agencys announcement on september 18th that it had evidence to support allegations that vw was cheating on its emissions tests. As epa reported at the time, when the cars were subject to emission testing, the diesel vehicle switched into a mode designed to pass the test. Then switched back to a different mode during normal driving, that it emitt eted nitrogen oxide 40 times the limit. The software was used in an estimated 11 million vehicles involving several vw lines. In the wake of this apparently massive deception, the energy and Commerce Committee opened an investigation to get answers for the American Public. This investigation will seek to understand the facts and circumstances surrounding the vw actions, the impact of its decisions and related issues about emissions compliance generally. At this mornings hearing we will receive testimony from mr. Michael horn and from epa officials tasked with ensuring the ables on american roads meet federal environmental standards. In addition to subcommittee that tends to pursue the troubling revelations about vws actions, what happened, who was involved and most importantly why. Let me acknowledge that mr. Horn is appearing before us voluntarily today. And i say that i expect he and the volkswagen organization will continue to cooperate with our inquiry. This means providing documents and information to the committee as quickly as possible including documents that have been discussed publically in connection with volkswagens various board meetings in germany. As i said before, there are core questions we will pursue today both for volkswagen and the epa. Most critically, what happened, who was involved, why were these actions taken . We have a number of questions concerning the impact of these decisions on customers, familyowned dealershiped and the American Public. I hope mr. Horn can provide context to for us and expand his testimony. We look to understand the understanding of vw executives about what was done to the engines. And was it done to deliberately deefsh government regulations . And regulators. What is vw doing to fix the problem and make whole those who have been affected by the action snz at some point, prior to 2009, vw made a choice to move forward with engines that evidence suggest were not compliant with u. S. Emission standards. The software was initially deployed in a first generation of the diesel engines which account for approximately 340,000 of the affected vehicles. However, despite apparent advancement in the emission control systems in two future generations of the engines, the software remained in place. If the technology was improving, why did the company what did the company understand about the software cheat . What does this mean for fixing these vehicles . Will some be easier than others . Of course, for epa we have questions about its recall programs. I hope we can get clear answers today from the agency. Why did epas audits fail to detect problems, especially in the Older Technology . What is epa doing to ensure any fix it requires of the automaker does not negatively affect vehicle performance . There is some need for a sense and proportion regarding this matter. The 480,000 or so wv vehicles implicated in the scandal represent only 0. 2 of the cars and trucks in the United States highways. So far, we have no evidence that the Software Similar to what was used by vw is present in any other u. S. Vehicles. Epas testing will address this question. We hope our witnesses can understand why our confidence has been shaken. At root, the behavior to which vw admitted represents a violation of public test. The reverberations of this violation can be seen across the United States and across the world as people grapple with the implicatio implications. We need to understand the facts and circumstances surrounding this case. This will be a first important step towards that goal. I now recognize the Ranking Member of the subcommittee for five minutes. Thank you, mr. Chairman. In the spirit of bipartisanship of this investigation, will at the you my first car was also a volkswagen. It was a 1960 vw beetle with a rag top sunroof that i inherited from my grandmother. I will tell you that that 1960 beetle, i miss that car. It didnt have any lines of computer code required to operate that vehicle. In this situation, fast forward to today, we know some things, but we dont know enough. Thats why im glad were having this investigation. We know that in may 2014, West VirginiaUniversity Published a study commissioned by the International Council on clean transportation that found that onroad emissions from volkswagens were above standards. They didnt match outputs found under testing conditions. We know vw tried to justify this discrepancy to regulators with explanations of technical issues and unexpected inuse conditions. We know that in december 2014, vw initiated a voluntary recall of nearly half a million vehicles to resolve among other things the emissions issues. Yet when the California AirResources Board tested the fixed vehicles, they found that the emissions were still above the legal standards. We know that by july of this year, the epa told vw that they would not approve the companys 2016 model year diesel vehicles for sale unless the emissions issues could be explained. Vw was essentially forced to come clean. And they ultimately confessed that they had installed a defeat devise in their cars designed to circumvent emission standards. We know that this defeat device sensed when the vehicles were undergoing emissions testing and ensured emissions control systems were under operating to pass. We know during normal road use, the emissions controls were reduced and the cars were producing up to 40 times more nitrogen oxide than is allowed. We know that half a million cars almost half a million cars in the United States might be affected by this. Mr. Horn, im glad you have come toward to testify here. Because while we know all of the things i just talked about, theres a lot more things we dont know and that we need answers for. For example, vw hasnt revealed how the defeat device affects the engine, why it was installed and how it was able to evade emissions tests. You havent revealed when and how the engines equipped with this device will be fixed. You havent told us whether this fix will affect fuel economy or performance of the vehicles. You havent revealed what volkswagen told regulators over the last year as epa and the california board were trying to figure out why the vehicles emissions were out of compliance. You havent revealed whether the voluntary recall that vw set in place in 2014 was just merely a ruse. Was the vw group of america actually trying to find out what was wrong with the cars and fix them, or did vw know that the cars had defeat devices on them and were only trying to buy time with the regulators . You havent revealed who is responsible for this scheme. We dont know if it came from germany and who knew about it in the United States. We have seen the press reports and we can speculate about what happened and why. But until volkswagen comes forward with answers and provides assurances that we can trust about what they are saying, the American People, the regulators and congress are all left in the dark. So i hope, mr. Horn, you have come prepared to answer some of these questions. I also hope that vw will be prepared to work with this committee as we move forward. Hundreds of thousands of owners invested money and trust in vw. Many of them bought those cars specifically because they were seeking environmentally friendly vehicles. Now they are left with cars with higher levels of pollution. They dont have any answers about when or how their car will be fixed or what kind of car they will be left with. Earlier this week, i visited a volkswagen dealership. I saw the pollution control equipment on vw diesel vehicles firsthand. These cars account for almost 25 of the sales at that particular dealership and a significant percentage of sales at vw dealerships in colorado and across this country. Now because they cant sell them, these cars are just sitting on the lots, which is a scene thats being repeated across the country. As mr. Chairman you say, its a small percentage of all the cars on the road in the u. S. Its a tremendous Economic Impact to these dealers and also to the consumers who dont know whats going to happen to their cars. So thats perhaps the key answer that im looking for today. What do we do moving forward . Mr. Chairman, this subcommittee has been here before. The last 15 years, we have had ford and firestone, toyota, gm and takata before this committee. We were able to get information from all these committees to help us understand what happened. But most importantly, we have used this information to chart a path forward and to help the consumers affected by this event. I hope that volkswagen can similarly tell us today whats happening and i hope that they will get beyond this series of terrible decisions and do something to restore the public trust. Thank you and i yield back. Now recognize the chairman of the full committee, gentlemen from michigan, mr. Upton for five minutes. Good morning. Thank you. It makes a car a volkswagen. That ad campaign swept the nation in the 90s. Vw has long enjoyed an almost cultish following dating back to the vw van and the rabbit. Through the years something became rotten and cheating and betrayal became part of the game plan. Theres a lot we dont know about the actions or their motivations in attempting to skirt emissions standards. Regardless of intent, they have betrayed the trust of regulators, dealers and suppliers and most important the driving public. Probably the most famous congressional hearing question is, what did you know and when did you know it asked by senator howard baker in the 70s at watergate. Now we learn that you knew 18 months ago. So we add, what did you really do to fix it and come clean versus simply going along . Ultimately, the saying rings true. Cheaters never prosper and thats why we are here today. We have many questions about how we got here and the road ahead. Why would one of the Worlds Largest automakers go to such lengths to avoid emissions requirements . Who was responsible for these decisions and why did they for years even as the technology improved continue that path . If they were willing to cut corners here, what else have they done . How will you fix the flaw and when . Will the fix affect the performance of the vehicles . Unraveling these questions will take time. I dont expect that we will discover all the answers today. If vw is serious about rebuilding this broken trust, its leaders will need to demonstrate a serious commitment to answer these and many other questions prompted by its actions. This requires transparency, cooperation and clear, consistent communication not only with this committee, the epa and other ongoing investigations, but also with its customers, suppliers, dealers and general public. Vw will pay a steep price for this dirty little secret. How it responds to the failure will go a long way to rebuilding or further eroding the publics trust. Vw must also consider what implications these actions have for the thousands of americans that it employs, including their facility in michigan. Every single one of us who has ties to michigan is proud of our rich tradition that is so closely intertwined with the success of the automobile. In fact, michigan is one of several states that have launched their own investigations. All ought mo automakers must ad by gaming system and breaking the law. We will get insight today. But the investigation is just beginning. This hearing is an important step as we receive document, information. New details are certain to emer emerge. I look forward to getting to the bottom of this issue as quickly as possible. I take this very personally. As the author of the tread act to protect the public, congress was very clear in our work to protect consumers from abuses from automakers which included steep fines and, yes, criminal prosecution. Vw has betrayed a nation. A nation of regulators, loyalists, suppliers and innocent customers. Its time to clean it up or get off the road. I yield the balance of my time to march sha blackburn. Thank you, mr. Chairman. Mr. Horn, i thank you for being here. I think its completely appropriate that you come before the committee, that you apologize for the actions and that you and vw take full responsibility for what has transpired. It is disappointing. Im fully aware that our governor has been at the chattanooga facility and i know that the governor, state legislato legislators, other members of the congressional delegation and i are quite concerned about this. You have got a lot of hard working, honest tennesseans who are at that chattanooga facility. And we are quite concerned about the actions of a few. So a few vw employees, not chattanoo chattanoo chattanoogans. It is as the chairman said its basically the who, what, when, where, how and why. Why you did it. How you did it. When you did it. When you knew. Who carried this out. Where did this take place. Did it go across the brands . Was it pointed at eu regulations . Was it pointed at some of the climate regulations . Is the epa too overburdened to have noticed this . This is a systemic failure. And i will also point out, some want to say its a safety issue. No, sir. This is an issue of integrity. So we appreciate that you are here. We look forward to hearing from you. And i want to yield the balance of my time to the vice chair of the subcommittee. Thank you. Thank you, mr. Chairman, for holding this meeting. Those of you that have talked about the car, my first was a 1957 volkswagen. I think i have everybody beat on that. Listen, there should be zero tolerance for this unethical behavior and flagrant disregard of the u. S. Law. Thats why this hearing is important to us today. The American People need to understand what happened, how it happened and how it will be resolved. They feel in West Virginia they have been deceived. Monday, there was action taken by the attorney general to file action against this. I want to touch on the university West Virginia university used a fraction of the money that we spend with epa, a fraction of the money to make this discovery. They found out, as you know, that 15 one of the cars was 15 to 35 times more emissions than they were allowed. Another was five to 20 times more emissions. Mr. Chairman, i want to touch on the fact that this opportunity about wvu and how Research Dollars can work. This is what was happening. Not the epa, but this was a university able to accomplish this. Im looking forward to this hearing and getting some clarity as to what this is. I thank you very much for holding this and look forward to the conversation. Thank you. We now recognize the Ranking Member of the committee for five minutes. Mr. Chairman, thank you for holding this hearing. We are here today because volkswagen lied. They lied to regulators, to their customers and they lied to the American People. We all have many important questions that deserve answers. What did volkswagen do to its cars, why did they do it and who knew this was happening in germany and here in the United States . This whole scheme makes me question how much we should trust volkswagen and to be honest, this committees investigations over the last five years make me question how much we should trust the Auto Industry in general. Let me remind the committee of the difficult history the American Driver has had with the Auto Industry in recent years. In 2010, this committee investigated toyotas recall of 9 million vehicles for unexplained cases of sudden, unintended acceleration. Dozens of people died in accidents linked to run away toyota vehicles. Our Committee Held multiple hearings. In the end, it was determined that toyota knew about certain problems with the vehicles that if fixed early would likely have saved lives. In early 2014, we launched an investigation of gm ignition switches that killed many people. Our investigation found that individuals within gm knew about the deadly ignition defect for nearly a decade before the Company Initiated a recall. Later in 2014, we learned of the exploding takata airbags installed in vehicles made by at least 11 auto manufacturers. The recalls for airbag problems begin as early as 2008, yet takata continued to investigate whether additional recalls are Still Necessary and takata still has not determined the root cause of the defect which has killed a number of people worldwide and injured hundreds more. Now we have volkswagen, a company that told regulators that their vehicles met emission standards but had installed defeat d