The recall of 114,000 Taveras by General Motors (GM) India last July for irregularities found in exhaust emission tests resulted in the sacking of several GM employees, according to media reports. As part of the company’s worldwide integrity policy, GM has forced out people who it believes were directly or indirectly involved in certain dishonest emission testing practices that came to light.
The recalled Taveras will be tested for emission compliance and, on a case-to-case basis, will be retrofitted with upgraded fuel pumps or improved catalytic converters. Tavera production has since been stopped until the emission problems are sorted out. But why did the Tavera fail to meet emission standards and what exactly was the fiddle to make it comply?
Pumping losses
The root cause of the Tavera’s emission troubles can be traced back to late 2003 or early 2004 when GM was strategising how best to upgrade its MUV from BS II to BS III emission standards.
According to company sources involved at the time, GM had two options to upgrade the Tavera’s then 2.5-litre Isuzu engine to the new emission standards that came into effect on April 1, 2005.
One route to meet the emission norms was by upgrading the fuel injection pump with a higher pressure. A high- pressure pump allows for better control of emissions and this in turn would allow the Tavera to meet BS III emission norms by a comfortable margin of an estimated 30 percent. However, this new Bosch fuel pump, which was not localised at the time, is believed to have cost approximately US$ 2,000 per car, which made the bean counters in GM baulk.
There was another option – and a much cheaper one at that – which did not involve replacing the fuel pump. BS III could also be met by upgrading the catalytic converter and a few other tweaks. These emission improvements, which essentially involved aftertreatment, are believed to have cost the company around just US$ 300 or a massive US $1,700 saving. Not surprisingly, the company took the lower-cost option.
Company insiders say this decision to choose the less expensive route to BS III was taken at the Asia-Pacific board level of GM which held the view that in low-margin markets like India, this made the best commercial sense. This also helped the Tavera’s contribution margin which, at the time of launch, was estimated to be around Rs 1 lakh thanks to a near-90 percent local content.
But, by using the older fuel pump, the ageing Isuzu engine scraped through to BS III with, what company sources say, with just a 15 percent margin for error, which is considered a borderline case.
That wasn’t the issue because meeting emission norms is a straightforward pass or fail test. It’s like going from Class II to Class III in school. You can either do it with distinction or scrape through with 40 percent marks. Hence, whether the Tavera passed BS III tests with a big or small margin was irrelevant.
However, with a small margin or little room for error, GM had to ensure that the engine was produced with tighter controls and tolerances because variations in manufacturing could (and did) result in variation in emissions too. The small margin for error meant that if emissions varied substantially, those units of the Tavera could fail to meet the norms.
GM India was conscious of the fact that Tavera’s BS III engines were a marginal case and just about met the new standards. Hence, it put a system in place to ensure that tolerances were tightly controlled to minimise any variations in production.
According to engineers present then, a series of checks was put in place and even powertrain supplier Avtec was apparently apprised of the delicate situation. Variations in manufacturing usually come from the thousands of machined parts that have to be built with micron-perfect accuracy. A lot of these critical parts are outsourced sometimes to various suppliers and hence it’s hard to always ensure consistency in manufacturing. But if consistency is maintained, so are the emission levels.
So far, so good.
However, over the years a bit of complacency appears to have set in and it is likely that the seriousness of this issue was slowly lost which meant that variations in the engine were not kept in check and hence some engines didn’t comply to BS III.
Now here’s where it gets really murky. According to GM’s own investigations, the company found that over a period of time “Some employees of the company engaged in the practice of identifying engines with lower emissions which were fine-tuned and kept aside to be used for installation on vehicles during COP inspection period,” as stated in GM’s letter to the authorities.
It appears that on the day of Conformity of Production (COP) inspection, where random vehicles are picked up from either the assembly line or stockyard in the factory by officials from the testing agencies, GM employees ‘pre-selected’ engines they knew were BS III compliant and made only those available for selection by the officials on that day. What’s worse is that the same engines were kept aside and re-introduced into the random sampling batch for the inspectors to pick from! And again, GM has admitted this in its letter.
Weight-n-watch
Another bit of foul play that emerged is the fudging of the Tavera’s weight to allow it to fall into an easier emission class.
Within the BS III category there are different emission classes classified by the weight of the vehicle. Lighter vehicles have to clear more stringent norms while heavier vehicles are given leeway and have more relaxed limits. According to the emission regulations, cars with a ‘reference mass’ (unladen weight + 150kg) of over 1760kg are tested against Class III or less stringent emission values while cars under this limit fall into the Class II or tougher emission class. The Tavera with all its variants straddled both Class II and Class III categories with unladen weight at the time of launch ranging from 1585kg to 1660kg.
In fact, former GM India engineers have confirmed that for the cheaper 10-seater variants, additional weight was added (in areas like the running boards) to officially raise the reference mass to beyond 1760kg and push the Tavera into the higher weight (and lower emission) category. Again, nothing wrong with this.
However, GM investigations revealed that engineers have conveniently passed off lighter variants as Class III vehicles, making it easy for them to pass the COP. These underweight (for Class III) vehicles were required to conform to the more stringent Class II norms which they might not have met.
Some sources say that this was just an ‘oversight’ while others believe that this was another fiddle to get pass marks for the Tavera.
The fallout of this skullduggery has been the sacking by GM off over 30 of its senior management, mostly from the powertrain side. This whole saga was clearly an issue of fixing the audit rather than the emission performance. There is no reason why, over the years, GM could not tweak the Tavera’s engine to give it enough margin to safely pass the COP.
What’s admirable is that GM on its own accord brought these issues to the notice of the authorities. However, the voluntary nature of GM’s disclosure has stupefied the industry, especially since all GM had to do was inform the test agencies that there were some compliance issues, stop production, introduce counter measures and start production after the counter measures got approval.
The company need not have escalated the issue to the government by way of a detailed thee-page letter to the government. This letter, which
The Economic Times has managed to get a hold of, is a shocking indictment of some of its employees involved in this scandal.
However, industry experts say this letter, which was drafted by lawyers, is one safeguard against litigation that could arise from any lawsuits in the future. Also by coming completely clean, it projects GM as an organisation with good corporate governance and one that doesn’t keep skeletons in its cupboard.
What’s not clear is whether the top management was involved or was it just a handful of employees. The general belief is that these shenanigans were the handiwork of a few engineers who finally got caught out in GM’s internal audit. However, there are still too many questions that are left unanswered and this has left a lingering stink. Just like the Tavera’s exhaust.