emissions scandal


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Judge OK’s 3-litre VW settlement

A federal judge has granted final approval on an agreement for embattled car maker Volkswagen to fix and buy back over 80,000 3.0-litre diesels in the United States, at an estimated cost of over $1.7 billion.

Owners of affected vehicles will be compensated between $10,000 and $23,000 if they chose to opt for fixes. Volkswagen could be forced to pay up to $5.8 billion if the fixes for 3.0-litre diesels are not approved by American regulators

The ruling is one of the final acts in the long-running emissions scandal, which began in October 2015 when it was revealed Volkswagen had fitted diesel vehicles with so-called ‘defeat devices’ to cheat emissions tests.

A separate settlement to fix or buy back 475,000 polluting 2.0-litre diesel vehicles was approved last spring.

Volkswagen spokeswoman Jeannine Ginivan told Reuters the settlement “marks an important milestone for Volkswagen and means that a resolution is available to all of our customers.”

In total, Volkswagen has agreed to spend $36.33 billion on various settlements. Last month, the car maker was sentenced to three years probation after pleading guilty to criminal charges, and agreed to broad reforms and independent oversight.

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VW sentenced to probation, oversight

A Detroit federal judge sentence Volkswagen AG to three years’ probation and oversight over the weekend as part of the $6.1 billion settlement first announced in January.

An independent monitor will oversee Volkswagen’s American operations in one of the last major legal judgements since the scandal broke in September 2015.

“This is a case of deliberate and massive fraud,” US district judge Sean Cox said in his ruling. Cox also approved the $4 billion criminal fine as part of the settlement.

Volkswagen has agreed to spend up to $35 billion in the US to settle buyback and repair claims from car owners, states, dealers and environmental regulators.

General counsel Manfred Doess said Volkwagen “deeply regrets the behaviour that gave rise to this case. Plain and simple, it was wrong.”

The US Justice Department has also selected the car maker’s independent monitor. Former deputy US attorney general Larry Thompson was announced over the weekend.

Seven current and former Volkswagen executives have been charged in relation to the emissions scandal, with one executive awaiting trial in custody and another pleading guilty and agreeing to cooperate with authorities.

“We have worked tirelessly to address the misconduct that took place within our company and make things right for our affected customers,” The car maker said in a statement following the sentencing.

“Volkswagen today is not the same company it was 19 months ago.”

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VW bought back 244,000 cars in the US

Volkswagen has told a US judge that the company has bought back or repaired 244,000 of the 475,000 polluting 2.0-litre diesel vehicles after first launching its repurchase offer last October.

The car maker pleaded guilty last month to fraud, obstruction of justice and falsifying documents last month, and has agreed to pay $36 billion in total in buybacks, settlements, and penalties.

Volkswagen said it repurchased and terminated leases on nearly 238,000 vehicles and repaired a further 6,200. In February, the company said it had spent $4.14 billion on buybacks.

Volkswagen has until 2019 to buy back or repair at least 85 per cent of affected vehicles or face additional penalties under the settlement.

A judge has also granted preliminary approval for Volkswagen’s 3.0-litre buyback plan, at the cost of $1.75 billion. Nearly 80,000 3.0-litre vehicles, including Porsche, Audi and VW SUVs, were affected.

A hearing is scheduled for May 11 to grant the 3.0-litre buyback final approval.

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VW settles with 10 more US states

German car maker Volkswagen announced in a statement that it has agreed to settle environmental claims from 10 US states over its illegal excess diesel emissions for $224 million in an effort to move past the ongoing scandal.

The settlement covers mainly eastern states, including New York, Connecticut, Massachusetts and Pennsylvania, and also covers some consumer claims.

“The agreement avoids further prolonged and costly litigation as Volkswagen continues to work to earn back the trust of its customers, regulators and the public,” The car maker said in its statement on the matter.

This brings the total bill for VW up to $35.75 billion in the United States alone, resolving claims and buying back affected vehicles from owners, states, dealerships and environmental regulators.

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London, Paris to launch new emissions system

Paris Mayor Anne Hidalgo and London Mayor Sadiq Khan jointly announced yesterday that they are working together to creating a vehicle rating system which would score new cars based on real-world emissions and their impact on air quality.

Current schemes, such as the EU standards, only regulate some noxious emissions and require vehicles to meet laboratory condition standards, despite the fact that actual on-road emissions have been proven to exceed this limit by up to 15 times.

Recent scandals have destroyed public confidence in the current emissions legislation, and a study conducted by the German transport ministry in 2016 showed that some diesel cars that meet the highest EU environmental standards, rated Euro 6, actually release more nitrogen oxide and nitrogen dioxide than a modern heavy-duty truck.

The new scheme allocates each model of car with a score based on the air pollutants they release during real-world, on-road conditions, which will be available to the public through dedicated websites.

Paris and London have committed to launch this online data by the end of 2017.

 “For too long, some vehicle manufacturers have been able to hide behind inconsistent regulation and consumer uncertainty about the damage their cars are causing,” said Hidalgo at the meeting.

“This announcement is a wake-up call to car companies that they need to act now.”

 “My scheme will put an end to the smoke and mirrors that have been employed in official emissions tests. It will provide Londoners with an honest, accurate and independent evaluation of the emissions of most new cars and vans on our roads and on the showroom forecourt,” said Khan.

“By having ‘on the road’ testing, I believe we will help Londoners make an informed choice and incentivise manufacturers to build cleaner vehicles sooner.”

“The toxicity of the air in London and many other big cities is an outrage, and schemes of the type we are introducing in London and Paris have the potential to make a massive difference to the quality of the air we all breathe.”

Several other cities, including Seoul, Madrid, Mexico City, Milan, Moscow, Oslo and Tokyo have all committed to work to develop a relevant local scoring system and make it available to the public.

“Tackling vehicle emissions is a priority if you are to tackle air pollution in your city,” said Seoul mayor Wonsoon Park. “As cities made significant contributions toward the adoption of the Paris Agreement, the concerted effort shown by cities today to tackle air pollution will make air cleaner for our citizens to breathe.”

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France to investigate Fiat Chrysler

French prosecutors have confirmed a formal investigation into Fiat Chrysler has been opened over allegations the car maker cheated in diesel emissions tests.

“I can confirm that a judicial investigation has been opened into aggravated cheating,” a judicial source told Reuters.

The investigation was opened on March 15 on advice from the finance ministry’s consumer affairs and anti-fraud body, DGCCRF.

A spokesman for Fiat told Reuters the company took note of the investigation and told Reuters its diesel vehicles fully comply with emission regulations, as confirmed by the Italian Transport Ministry.

The investigation comes as several European countries found on-road nitrogen oxide emissions more than 10 times above regulatory limits for some GM, Renault and Fiat Chrysler diesel vehicles after launching their own tests. Widespread use of defeat devices was also noted.

The French test programme launched by environment minister Segolene Royal has led to Volkswagen, Renault Fiat Chrysler and PSA Group all being referred on to prosecutors.

Fiat Chrysler vehicles were among those that recorded the highest toxic nitrogen emissions.

In the UK, the government is testing the emissions of Fiat Chrysler’s Jeep Grand Cherokee, according to the BBC.

The UK Department for Transport has also asked for details of an investigation the United States Environmental Protection Agency conducted into Fiat Chrysler’s diesel emissions software.

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France closes Opel investigation

French regulator DGCCRF closed its investigation into diesel emissions by Opel cars overnight and said it would take no further action against General Motors.

The probe “did not bring to light any evidence of fraud,” the government bureau said in a statement.

Questions around Opel (and its British counterpart Vauxhall) have been swirling since the Volkswagen scandal first broke in September 2015. In October 2015, German environmental group Deutsche Umwelthilfe claimed that testing showed the 1.6-litre diesel Opel Zafira exceeded 2014 EU emissions thresholds under certain circumstances.

The following May, a joint investigation between Der Spiegel and German news programme monitor suggested a number of Zafira and Insignia diesel models to contain devices that would deactivate filtration systems.

The German transport ministry demanded answers from General Motors and Opel, who vehemently denied any wrongdoing. In response, Opel published a lengthy report explaining how and why the software uncovered by the investigation was technically legal under EU emissions regulations.

Last month, Opel was sold to PSA Group, which includes the Citroen and Peugeot marques, as GM sought to extricate itself from its struggling European holdings.

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VW executive remains in prison over emissions case

A Detroit judge has refused to set a bond and release a German Volkswagen executive who was arrested while on holiday in Florida last year.

Oliver Schmidt’s lawyers attempted to persuade the judge to set a bond, saying Schmidt would stay in the Detroit area under electronic monitoring and return for subsequent court hearings. Prosecutors, however, argued that he no ties to the U.S. and would be out of jurisdiction if he fled to his home country of Germany.  

U.S. district judge Sean Cox said it was a “very, very serious case.” His decision means Schmidt will remain behind bars while the case moves through the district court.

Schmidt’s trial is due to begin on January 16 next year. He is charged with 11 felony counts and could face up to 169 years in prison, according to Reuters.

Schmidt is one of seven VW employees charged in a long-running scheme to cheat emissions standards in the U.S. by installing illegal software on diesel vehicles. As Germany doesn’t extradite its citizens, the other five German executives facing charges may never see the courtroom.

In Detroit, Schmidt pleaded not guilty to charges of conspiracy and fraud. Until the scandal broke, he was the manager of VW’s environment and engineering office. He is accused of lying to U.S regulars by saying technical issues, not illegal software, were behind the discrepancies between diesel emissions in road and lab tests.

Last week, VW pleaded guilty to carious charges and agreed to pay back $6.2 billion in civil and criminal penalties. Total expenses for the embattled auto company are expected to exceed $30 billion.

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Police raid Audi homes, factories

German prosecutors searched two of Audi’s biggest factories and other properties on Wednesday with the ongoing emissions scandal.

The raids are the first at Audi since the scandal involving parent company Volkswagen first broke 18 months ago.

Prosecutors focused on who was involved with the use of illicit software found in 80,000 VW, Audi and Porsche cars that contained 3.0-litre engines and were found to have breached U.S. emissions regulations.

“With these search orders, we aim to clarify in particular who was involved in deploying the technology concerned and in the provision of false information to third parties,” the Munich prosecutor’s office said in a statement on Wednesday.

It said the raids involved prosecutors from several jurisdictions and state police from Bavaria, Baden-Wuerttemberg and Lower Saxony. VW’s Wolfsburg headquarters were searched, along with Audi’s Ingolstadt and Neckarsulm factories and six other unspecified sites.

Reuters reports that some 70 law enforcement officers also searched offices and private homes as part of the operation, although Audi CEO Rupert Stadler’s house was not among them.

The police raid occurred as Stadler was presenting Audi’s 2016 earnings. “I have all along supported efforts to clear up the diesel issue at Audi,” he told journalists, admitting recovery from the scandal would still take some time.

Audi reported a 37 drop in operating profit to $4.7 billion for 2016, with a sales return of 5.1 per cent, compared to 8.3 per cent a year earlier.

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VW pleads guilty in US

Volkswagen has pleaded guilty over the weekend to fraud, obstruction of justice and falsifying documents as part of its $6.2 settlement with the United States Justice Department, which was first reached in January, over the diesel emissions scandal.

VW’s general counsel, Manfred Doess, made the plea on the car maker’s behalf. The plea was accepted by U.S district judge Sean Cox, who has set a sentencing date for April 21.

Shares rose 0.3 per cent at the news in Germany to 143.70 euros.

A company spokesman told Reuters it was the first time the company has pleaded guilty to criminal conduct in any court in the world. The guilty plea follows ongoing investigations which began in 2015, when news emerged that Volkswagen had intentionally cheated on emissions tests for at least six years.

In total, VW has agreed to spend over $36 billion on settlements between owners, states, dealerships and environmental regulators in the U.S. and has offered to buy back approximately 500,000 polluting vehicles.

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Merkel testifies in VW inquiry

German Chancellor Angela Merkel has appeared before a parliamentary committee of inquiry investigating the ongoing Volkswagen emissions scandal.

The inquiry was established to investigate whether German authorities were aware of VW’s emissions cheating before the United States. Angela Merkel is the last witness to testify. German opposition parties wanted the inquiry to investigate the government’s response to the scandal, which they felt had been too lax.

Merkel told the committee she first learned of the diesel emissions scandal through the media. “I only found out through media reports,” she said.

Merkel said she found out about the accusations against Volkswagen on September 19 2015, and was informed by the transport minister, Alexander Dobrindt, on September 21. Her first contact with former VW CEO Martin Winterkorn regarding the issue came via a telephone call “probably on the 22 September,” according to Reuters.

The long-standing relationship between Merkel and Winterkorn has been a point of interest throughout the emissions scandal.

When asked what she found out from the VW chief, Merkel said, “nothing that I didn’t already know based on the information from the transport minister and the media.” She said it was unfortunate that VW had misled U.S. authorities.

Merkel said she felt Dobrint had kept her well informed on the issue and quickly set up an investigation committee, and she had no impression that German authorities responsible had been negligent or incompetent during the scandal.

The emissions scandal broke on September 18, 2015, after U.S authorities ordered a recall of VW diesel vehicles. Merkel said she did not know why the emissions cheating had not been discovered in Germany. “I don’t have any explanation for that,” she told the committee.

A long-time defender of diesel vehicles, Merkel argued against excessive regulation of the industry, which employs 800,000 people in Germany. “We should have regulation that is ambitious, but not to such an extent that cars can no longer be produced,” she said.

The inquiry has yet to uncover clear evidence of improper misconduct by Angela Merkel or the German government.

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