VW supplier Bosch defends diesel technology

LAS VEGAS -- A key supplier of diesel components to Volkswagen AG has gone public with a vigorous defense of the technology, even as the automaker remains embroiled in a dispute with U.S. regulators over the steps it must take to fix its diesel emissions systems.

Werner Struth, U.S. chairman of Robert Bosch, recently told Automotive News that urea-based catalytic converters can meet all U.S. diesel standards and that diesels are needed to help cut carbon dioxide emissions in the United States and Europe.

"We are definitely convinced that [the emissions systems] will work," Struth said this month at the Consumer Electronics Show here. The emissions "targets in Europe can be achieved only with the help of diesel engines, and the same is true in the United States."

Struth added that American diesel owners typically are repeat customers. "Guys that buy diesels are very loyal customers," he noted. "They love the diesel engine. It has great torque and great fuel economy. They know what they have."

With estimated global original-equipment parts sales of $44.24 billion in 2014, according to the Automotive News list of top suppliers, Robert Bosch GmbH of Stuttgart is the world's biggest automotive supplier. The company is a major producer of diesel fuel systems and engine control units.

The EPA has asked Bosch whether it knew that VW had tampered with the software of Bosch-produced engine control units used in 600,000 vehicles sold in the United States.

The engine control units allowed Volkswagen's vehicles to pass EPA emissions tests in the lab but disabled their catalytic converters and other emissions-control systems during normal road use.

Volkswagen has been reeling since it acknowledged in September that some 11 million diesel vehicles worldwide were equipped with such "defeat devices." Martin Winterkorn resigned as CEO, other top executives have left the company, and VW has been hit with lawsuits and investigations by regulators. So far it has set aside more than $7 billion to cover the costs of the scandal.

Struth said Bosch is cooperating with the U.S. investigation. "We are disclosing and delivering the information that has been requested," he said. "We are in the midst of an investigation" to find out what was known about the rigged emissions tests. "We have not made any conclusions."

While Struth seemed hopeful that the U.S. diesel market will recover, a top executive at Continental AG -- No. 3 on Automotive News' global supplier list -- was more downbeat.

In a separate interview here this month, Continental CEO Elmar Degenhart agreed that catalytic converters can meet U.S. diesel emission standards. But public confidence has been badly shaken, he said.

"Because of the trouble that was caused, [public] trust in diesel technology took a big hit," Degenhart said. "On the light-vehicle side, [diesels] may even disappear" from the U.S. market.

That would be a mistake, he said, because efficient diesel engines can play a major role in the effort to reduce carbon dioxide emissions.

"A state-of-the-art diesel engine with advanced after-treatment is really clean," Degenhart said. "It is a great powertrain."

But he fears the scandal may cause even greater damage in the European Union, where diesels account for more than half of light-vehicle sales.

If diesels' share of European sales falls below 45 percent or so, Degenhart said, "it would have a very negative consequence for the automakers. They would have a serious problem meeting the 2020 goals" for carbon dioxide reduction.

If diesel sales slump in the U.S. and Europe, automakers will have to invest more heavily in hybrid powertrains to meet emissions targets, he said. And that, in turn, would distract automakers from their long-term goal: efficient electric cars.

That's why Degenhart hopes for a quick resolution of the emissions dispute. "We never speak for our customers, but what you have to do in a crisis is to restore trust as fast as possible," he said. The only course of action is to "be open and transparent."