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Found 52 results

  1. We're coming up on three years since the Volkswagen diesel scandal came to light. It caused the German automaker to spiral downward with various fines, lawsuits, people either stepping down or being arrested, and sales tanking. By now, you would think that the pain is done and over. But you would be wrong. Reuters reports today that prosecutors in Germany have fined Volkswagen a billion euros ($1.18 billion) over diesel emission cheating. In a statement, Volkswagen will accept the fine, therefore admitting responsibility for the cheating. "Following thorough examination, Volkswagen AG accepted the fine and it will not lodge an appeal against it. Volkswagen AG, by doing so, admits its responsibility for the diesel crisis and considers this as a further major step towards the latter being overcome," the company said. By accepting the fine, Volkswagen hopes "the active regulatory offence proceedings" being conducted will come to an end. It will unlikely end the various criminal cases that German prosecutors are working on against various Volkswagen executives. Source: Reuters View full article
  2. We're coming up on three years since the Volkswagen diesel scandal came to light. It caused the German automaker to spiral downward with various fines, lawsuits, people either stepping down or being arrested, and sales tanking. By now, you would think that the pain is done and over. But you would be wrong. Reuters reports today that prosecutors in Germany have fined Volkswagen a billion euros ($1.18 billion) over diesel emission cheating. In a statement, Volkswagen will accept the fine, therefore admitting responsibility for the cheating. "Following thorough examination, Volkswagen AG accepted the fine and it will not lodge an appeal against it. Volkswagen AG, by doing so, admits its responsibility for the diesel crisis and considers this as a further major step towards the latter being overcome," the company said. By accepting the fine, Volkswagen hopes "the active regulatory offence proceedings" being conducted will come to an end. It will unlikely end the various criminal cases that German prosecutors are working on against various Volkswagen executives. Source: Reuters
  3. Another day, another raid by German prosecutors into Volkswagen's diesel emission scandal. Yesterday, 160 investigators conducted searches in about 10 premises in Bavaria and Baden-Wuerttemberg owned by Porsche. Prosecutors said in a statement to Reuters the raids are part of an investigation into Porsche employees on charges of fraud and fraudulent advertising tied to the cheating software used on diesel engines. “The three suspects include a member of the management board and a member of Porsche AG’s higher management. The third suspect is no longer employed at Porsche AG,” said prosecutors. A Porsche spokesman confirmed the searches to Reuters, but declined to comment any further. On the same day, two Audi sites were also searched according to Stuttgart prosecutors and an Audi spokesman. The searches relate to another investigation dealing with the diesel emission scandal. Source: Reuters
  4. Another day, another raid by German prosecutors into Volkswagen's diesel emission scandal. Yesterday, 160 investigators conducted searches in about 10 premises in Bavaria and Baden-Wuerttemberg owned by Porsche. Prosecutors said in a statement to Reuters the raids are part of an investigation into Porsche employees on charges of fraud and fraudulent advertising tied to the cheating software used on diesel engines. “The three suspects include a member of the management board and a member of Porsche AG’s higher management. The third suspect is no longer employed at Porsche AG,” said prosecutors. A Porsche spokesman confirmed the searches to Reuters, but declined to comment any further. On the same day, two Audi sites were also searched according to Stuttgart prosecutors and an Audi spokesman. The searches relate to another investigation dealing with the diesel emission scandal. Source: Reuters View full article
  5. As if the Volkswagen Group needed more headaches, a new report says there's a bit of infighting between Audi and Porsche. German tabloid Bild reports that Porsche is seeking 200 million Euros (about $234 million) from Audi to cover costs from the diesel emission scandal. Reportedly, Porsche management delivered this claim in a letter to their counterparts at Audi. Bild doesn't mention any source, so take this report with a fair amount of salt. When reached for comment by Reuters, a Porsche spokesman said internal issues were not open for public discussion. An Audi spokesperson declined to comment. This dispute stems from Audi admitting back in November 2015 that its 3.0L TDI V6 was fitted with a defeat device. One of those models using the V6 was the Porsche Cayenne. Source: Bild, Reuters
  6. As if the Volkswagen Group needed more headaches, a new report says there's a bit of infighting between Audi and Porsche. German tabloid Bild reports that Porsche is seeking 200 million Euros (about $234 million) from Audi to cover costs from the diesel emission scandal. Reportedly, Porsche management delivered this claim in a letter to their counterparts at Audi. Bild doesn't mention any source, so take this report with a fair amount of salt. When reached for comment by Reuters, a Porsche spokesman said internal issues were not open for public discussion. An Audi spokesperson declined to comment. This dispute stems from Audi admitting back in November 2015 that its 3.0L TDI V6 was fitted with a defeat device. One of those models using the V6 was the Porsche Cayenne. Source: Bild, Reuters View full article
  7. One question that we have found ourselves wondering is who blew the whistle on the software cheat Volkswagen was using on their TDI models. A new book says it was someone at Volkswagen of America. Automotive News got their hands on Faster, Higher, Farther: The Volkswagen Scandal by New York Times reporter Jack Ewing. In the book, Ewing reveals that the head of VW’s Engineering and Environmental Office in the U.S., Stuart Johnson revealed the existence of the cheat to federal authorities. Johnson was the primary contact for the various regulation agencies in the U.S. and would be one of the people on the front lines when the scandal unfolded. In the book, CARB deputy executive director Alberto Ayala named Johnson as the person who revealed the existence of Volkswagen's illegal software. This revelation took place prior to a key meeting between CARB and Volkswagen on August 19, 2015. By revealing this information, Johnson was violating orders given by VW's higher ups. This meeting is mentioned in the federal indictment of Oliver Schmidt, a former VW executive who is facing 11 federal charges dealing with the scandal. Johnson is mentioned in the indictment as “Cooperating Witness 1.” The indictment also states the witness “has agreed to cooperate with the government’s investigation in exchange for an agreement that the government will not prosecute CW1 in the United States.” Source: Automotive News (Subscription Required)
  8. One question that we have found ourselves wondering is who blew the whistle on the software cheat Volkswagen was using on their TDI models. A new book says it was someone at Volkswagen of America. Automotive News got their hands on Faster, Higher, Farther: The Volkswagen Scandal by New York Times reporter Jack Ewing. In the book, Ewing reveals that the head of VW’s Engineering and Environmental Office in the U.S., Stuart Johnson revealed the existence of the cheat to federal authorities. Johnson was the primary contact for the various regulation agencies in the U.S. and would be one of the people on the front lines when the scandal unfolded. In the book, CARB deputy executive director Alberto Ayala named Johnson as the person who revealed the existence of Volkswagen's illegal software. This revelation took place prior to a key meeting between CARB and Volkswagen on August 19, 2015. By revealing this information, Johnson was violating orders given by VW's higher ups. This meeting is mentioned in the federal indictment of Oliver Schmidt, a former VW executive who is facing 11 federal charges dealing with the scandal. Johnson is mentioned in the indictment as “Cooperating Witness 1.” The indictment also states the witness “has agreed to cooperate with the government’s investigation in exchange for an agreement that the government will not prosecute CW1 in the United States.” Source: Automotive News (Subscription Required) View full article
  9. Today at U.S. District Court in Detroit, Volkswagen pleaded guilty on three felony charges relating to the diesel emission scandal as part of a plea agreement. The three felonies are conspiracy, obstruction of justice, and introducing imported merchandise into the United States by means of false statements. "Your honor, VW AG is pleading guilty to all three counts because it is guilty on all three counts," said Volkswagen general counsel Manfred Doess at the hearing. As part of the plea deal, Volkswagen will pay $4.3 billion in penalties and have an independent monitor to oversee U.S. operations over the next three years. The deal also requires Volkswagen to continue cooperating with federal and state investigators. A sentencing hearing has been scheduled for April 21st. Source: Automotive News (Subscription Required), Reuters View full article
  10. Today at U.S. District Court in Detroit, Volkswagen pleaded guilty on three felony charges relating to the diesel emission scandal as part of a plea agreement. The three felonies are conspiracy, obstruction of justice, and introducing imported merchandise into the United States by means of false statements. "Your honor, VW AG is pleading guilty to all three counts because it is guilty on all three counts," said Volkswagen general counsel Manfred Doess at the hearing. As part of the plea deal, Volkswagen will pay $4.3 billion in penalties and have an independent monitor to oversee U.S. operations over the next three years. The deal also requires Volkswagen to continue cooperating with federal and state investigators. A sentencing hearing has been scheduled for April 21st. Source: Automotive News (Subscription Required), Reuters
  11. Ever since Martin Winterkorn resigned from his post as Volkswagen Group CEO due to diesel emission scandal sixteen months ago, he has been out of the spotlight. However, Winterkorn made his first public appearance today at a parliamentary committee in Berlin investigating the emission irregularities of automobiles. At the hearing, Winterkorn maintained his innocence, saying he had no part in the cheating, nor knew anything about it. “It’s incomprehensible why I wasn’t informed early and clearly. I would have prevented any type of deception or misleading of authorities,” said Winterkorn. Winterkorn declined to answer questions dealing with when he was informed about the scandal, saying prosecutors are still investigating. The defense that Winterkorn is using (not having any knowledge about the scandal until the news broke) is very much at odds with his reputation of being a detail-obsessed executive. “It remains difficult to believe that such a dedicated engineer like Winterkorn wasn’t aware what was going on. And if he wasn’t, he neglected his duties as supervisor,” said Stefan Bratzel, an auto industry researcher at the University of Applied Sciences in Bergisch Gladbach, Germany to Bloomberg. There is also a fair amount of circumstantial evidence that shows Winterkorn knew about this. A year before the scandal broke, Winterkorn was alleged to get a memo talking about the investigation into the EA128 2.0L TDI engine. He claims that he never saw that memo. There is also the allegation that Winterkorn sat in a meeting discussing the investigation. Before leaving the hearing, Winterkorn apologized once again. “What happened makes people furious -- me too. I’m deeply upset that we disappointed millions of our customers,” said Winterkorn. Source: Bloomberg
  12. Ever since Martin Winterkorn resigned from his post as Volkswagen Group CEO due to diesel emission scandal sixteen months ago, he has been out of the spotlight. However, Winterkorn made his first public appearance today at a parliamentary committee in Berlin investigating the emission irregularities of automobiles. At the hearing, Winterkorn maintained his innocence, saying he had no part in the cheating, nor knew anything about it. “It’s incomprehensible why I wasn’t informed early and clearly. I would have prevented any type of deception or misleading of authorities,” said Winterkorn. Winterkorn declined to answer questions dealing with when he was informed about the scandal, saying prosecutors are still investigating. The defense that Winterkorn is using (not having any knowledge about the scandal until the news broke) is very much at odds with his reputation of being a detail-obsessed executive. “It remains difficult to believe that such a dedicated engineer like Winterkorn wasn’t aware what was going on. And if he wasn’t, he neglected his duties as supervisor,” said Stefan Bratzel, an auto industry researcher at the University of Applied Sciences in Bergisch Gladbach, Germany to Bloomberg. There is also a fair amount of circumstantial evidence that shows Winterkorn knew about this. A year before the scandal broke, Winterkorn was alleged to get a memo talking about the investigation into the EA128 2.0L TDI engine. He claims that he never saw that memo. There is also the allegation that Winterkorn sat in a meeting discussing the investigation. Before leaving the hearing, Winterkorn apologized once again. “What happened makes people furious -- me too. I’m deeply upset that we disappointed millions of our customers,” said Winterkorn. Source: Bloomberg View full article
  13. American criminal lawyers are in demand at Volkswagen. Bloomberg has learned from sources that various executives at the company are hiring lawyers as the Department of Justice begins sending out officials to Germany for meetings to gather evidence for possible criminal charges. Volkswagen has already agreed to a $16 billion settlement over the diesel emission scandal. But the Department of Justice is continuing their investigation into whether various Volkswagen executives knew about the cheating software installed on over 10 million diesel vehicles around the world. As we reported back in September, a Volkswagen engineer has pled guilty for being involved in the scandal. Volkswagen has long maintained that none of its executives knew about the software and that it was a rogue group of engineers that went forward with this decision. But as we have been reporting for the past year, various documents and emails that have been leaked out put serious doubts into this claim. It is unknown if this investigation involves former Volkswagen CEO Martin Winterkorn who stepped down shortly after the scandal broke. If the Department of Justice was to bring Volkswagen executives to court, they could be facing some roadblocks. Germany's constitution doesn’t allow citizens to be extradited outside the European Union. A source tells Bloomberg the Department of Justice is looking into possible ways to bring them to the U.S. Source: Bloomberg View full article
  14. American criminal lawyers are in demand at Volkswagen. Bloomberg has learned from sources that various executives at the company are hiring lawyers as the Department of Justice begins sending out officials to Germany for meetings to gather evidence for possible criminal charges. Volkswagen has already agreed to a $16 billion settlement over the diesel emission scandal. But the Department of Justice is continuing their investigation into whether various Volkswagen executives knew about the cheating software installed on over 10 million diesel vehicles around the world. As we reported back in September, a Volkswagen engineer has pled guilty for being involved in the scandal. Volkswagen has long maintained that none of its executives knew about the software and that it was a rogue group of engineers that went forward with this decision. But as we have been reporting for the past year, various documents and emails that have been leaked out put serious doubts into this claim. It is unknown if this investigation involves former Volkswagen CEO Martin Winterkorn who stepped down shortly after the scandal broke. If the Department of Justice was to bring Volkswagen executives to court, they could be facing some roadblocks. Germany's constitution doesn’t allow citizens to be extradited outside the European Union. A source tells Bloomberg the Department of Justice is looking into possible ways to bring them to the U.S. Source: Bloomberg
  15. The first person has been charged in the U.S.' Volkswagen diesel emission probe. Today at the U.S. Federal Court in Detroit, James Robert Liang, leader of diesel competence for Volkswagen from 2008 until June of this year entered a plea of guilty to conspiracy to defraud the U.S. government, commit wire fraud, and violate the Clean Air Act. According to grand jury indictment filed back in June and unsealed today, “Liang and his co-conspirators, including current and former employees, and others, agreed to defraud the U.S. and VW customers, and violate the Clean Air Act, by misleading the U.S. and VW customers about whether VW diesel motors complied with U.S. emissions standards,” prosecutors wrote. Documents showed Liang was on the team that developed the diesel engine at the center of this scandal, the EA 189 2.0L four-cylinder back in 2006. The team realized that the engine wouldn't meet the strict U.S. standards on nitrogen oxide emissions while also attracting “sufficient customer demand.” Thus the decision was made to develop and install the 'defeat device' software on the EA 189 to pass emission tests. This engine would be installed on various Volkswagen vehicles starting in 2009. In 2014, Liang's team would update the software to help cut down on warranty claims. Engineers believed the reason for the increase in claims was due to the vehicle operating with the defeat device on for too long. Around this time, U.S. regulators would begin asking Volkswagen questions about the discrepancies between the amount of emissions being emitted during lab tests and in real-world driving. Various Volkswagen employees either lied when talking with regulators. “I know VW did not disclose the defeat device to U.S. regulators in order to sell the cars in the U.S. That’s what makes me guilty,” said Liang to the court. Liang faces up to five years in jail and a fine of up to $250,000 or twice the gross gain or loss. In a plea agreement signed on August 31st, prosecutors say in exchange for his agreement to cooperate with the probe, the U.S. government agrees not to use any new information about Liang’s own criminal conduct during the sentencing hearing expected to take place on January 11th. Liang's cooperation could help out in the investigation and shine a light on more people involved. When asked for comment, Volkswagen spokeswoman Jeannine Ginivan declined. Source: Automotive News (Subscription Required), Bloomberg, The Detroit News
  16. You're a Volkswagen 2.0L TDI owner who decided to take the buy-back offer. You have a sizeable check in your pocket and decide to go looking for a new car. The folks at Hyundai and Volvo are hoping you buy one of their vehicles and are offering special deals to try and rope you in. CarsDirect has learned about the offers the two automakers are putting forward to former Volkswagen owners. Hyundai's offer is the Hyundai Circle V-Plan - think Ford's X plan pricing for friends and family. This plan takes 3 percent off the MSRP, plus $1,250 V-Plan cash and current incentives. You'll need to break out the calculator to figure how much you'll save, but it appears to be significant. As for Volvo, they are offering 5 years of complimentary "Safe + Secure Coverage" - this includes 5 years or 50,000 miles of warranty coverage, free scheduled maintenance, free roadside assistance, and wear and tear coverage for various components. There is also a $750 credit along with a 7-Year/100,000 Mile warranty with free roadside assistance if you go for a Certified Pre-Owned model. On the face of it, the Volvo isn't as generous as the Hyundai one. But Volvo has existing conquest incentives for Volkswagen and Audi owners that switch over. Case in point, the 2016 V60 has $4,500 sitting on the hood. To qualify for either deal, you'll need to present the Class Settlement letter (Hyundai) or proof of ownership and insurance (Volvo). Don't be surprised if you begin seeing other automakers offer something similar to draw former Volkswagen 2.0L TDI owners in the near future. Source: CarsDirect, 2
  17. You're a Volkswagen 2.0L TDI owner who decided to take the buy-back offer. You have a sizeable check in your pocket and decide to go looking for a new car. The folks at Hyundai and Volvo are hoping you buy one of their vehicles and are offering special deals to try and rope you in. CarsDirect has learned about the offers the two automakers are putting forward to former Volkswagen owners. Hyundai's offer is the Hyundai Circle V-Plan - think Ford's X plan pricing for friends and family. This plan takes 3 percent off the MSRP, plus $1,250 V-Plan cash and current incentives. You'll need to break out the calculator to figure how much you'll save, but it appears to be significant. As for Volvo, they are offering 5 years of complimentary "Safe + Secure Coverage" - this includes 5 years or 50,000 miles of warranty coverage, free scheduled maintenance, free roadside assistance, and wear and tear coverage for various components. There is also a $750 credit along with a 7-Year/100,000 Mile warranty with free roadside assistance if you go for a Certified Pre-Owned model. On the face of it, the Volvo isn't as generous as the Hyundai one. But Volvo has existing conquest incentives for Volkswagen and Audi owners that switch over. Case in point, the 2016 V60 has $4,500 sitting on the hood. To qualify for either deal, you'll need to present the Class Settlement letter (Hyundai) or proof of ownership and insurance (Volvo). Don't be surprised if you begin seeing other automakers offer something similar to draw former Volkswagen 2.0L TDI owners in the near future. Source: CarsDirect, 2 View full article
  18. Volkswagen can take a sigh of relief as it appears the current CEO, Matthias Müller, didn't have any prior knowledge of the diesel emission cheating. German newspaper Bild am Sonntag (via Reuters) got their hands on a report done by Jones Day which said Müller didn't find out the scandal till the EPA made the announcement - September 18, 2015 if you're wondering. Only a week later, Müller would be named CEO of Volkswagen. Still, Müller's track record on dealing with the diesel emission mess is spotty. He has said the scandal was just a 'technical problem' and a misunderstanding about U.S. law - claims that were deemed false and got Müller in hot water. Source: Bild am Sonntag via Reuters
  19. Volkswagen can take a sigh of relief as it appears the current CEO, Matthias Müller, didn't have any prior knowledge of the diesel emission cheating. German newspaper Bild am Sonntag (via Reuters) got their hands on a report done by Jones Day which said Müller didn't find out the scandal till the EPA made the announcement - September 18, 2015 if you're wondering. Only a week later, Müller would be named CEO of Volkswagen. Still, Müller's track record on dealing with the diesel emission mess is spotty. He has said the scandal was just a 'technical problem' and a misunderstanding about U.S. law - claims that were deemed false and got Müller in hot water. Source: Bild am Sonntag via Reuters View full article
  20. After ten months when news came to light that Volkswagen used illegal software to cheat emission tests in the U.S. the German automaker has agreed to a $14.7 billion settlement. This morning, the U.S. Justice Department filed details of the settlement in U.S. District Court in San Fransisco. As part of the settlement, Volkswagen will offer owners of affected models the choice of either having their vehicle bought back or repaired if and when a repair is approved by the EPA and CARB. If you decide to have your vehicle bought back by Volkswagen, will be determined based on the 'Clean Trade-In Value' by the National Automobile Dealers Association, along with adjustments on mileage and options. If you have a loan through a third-party, Volkswagen would pay it off. Those leasing can terminate it with no penalties. Whichever option you decide to go for, Volkswagen will also provide a compensation payment ranging from $5,000 to $10,000. Again, the amount will be determined by various factors such as the age of the vehicle. Owners will be notified this fall with buybacks expected to begin in October. Volkswagen will also pay $2.7 billion over the next three years to a fund to reduce the excess amount of NOx emissions that Volkswagen's diesel vehicles emitted, and an additional $2 billion to expand zero emission vehicle infrastructure, access and awareness initiatives. Now this settlement needs to be approved by Judge Charles Breyer. A hearing will be held today for this. While Volkswagen is still not out of the woods with this scandal (more penalties and deal still needed for the 3.0L TDI V6), it is good to see some movement is happening to help bring this mess to a close. Source: Volkswagen, EPA Press Release is on Page 2 VOLKSWAGEN REACHES SETTLEMENT AGREEMENTS WITH U.S. FEDERAL REGULATORS, PRIVATE PLAINTIFFS AND 44 U.S. STATES ON TDI DIESEL ENGINE VEHICLES Proposed settlement program includes vehicle buybacks and lease terminations, emissions modifications (if approved) and cash payments to affected customers for approximately 475,000 eligible 2.0L TDI vehicles Volkswagen agrees to $2.7 billion environmental remediation fund and to invest $2.0 billion in initiatives to promote the use of zero emissions vehicles in the U.S. Separate resolution with U.S. states settles consumer protection claims Herndon, Va. /Wolfsburg, Germany (June 28, 2016) – Volkswagen AG announced today that it has reached settlement agreements with the United States Department of Justice (DOJ) and the State of California; the U.S. Federal Trade Commission (FTC); and private plaintiffs represented by the Plaintiffs’ Steering Committee (PSC) to resolve civil claims regarding eligible Volkswagen and Audi 2.0L TDI diesel engine vehicles in the United States. Of approximately 499,000 2.0L TDL vehicles that were produced for sale in the United States, approximately 460,000 Volkswagen and 15,000 Audi vehicles are currently in use and eligible for buybacks and lease terminations or emissions modifications, if approved by regulators. Volkswagen will establish a maximum funding pool for the 2.0L TDI settlement program of $10.033 billion. That amount assumes 100% participation and that 100% of eligible customers choose a buyback or lease termination. The agreements covering the proposed 2.0L TDI settlement program are subject to the approval of Judge Charles R. Breyer of the United States District Court for the Northern District of California, who presides over the federal Multi-District Litigation (MDL) proceedings related to the diesel matter. Volkswagen also announced that it has agreed with the attorneys general of 44 U.S. states, the District of Columbia and Puerto Rico to resolve existing and potential state consumer protection claims related to the diesel matter for a total settlement amount of approximately $603 million. “We take our commitment to make things right very seriously and believe these agreements are a significant step forward,” said Matthias Müller, Chief Executive Officer of Volkswagen AG. “We appreciate the constructive engagement of all the parties, and are very grateful to our customers for their continued patience as the settlement approval process moves ahead. We know that we still have a great deal of work to do to earn back the trust of the American people. We are focused on resolving the outstanding issues and building a better company that can shape the future of integrated, sustainable mobility for our customers.” Three agreements have been submitted to the Court for its approval with respect to the proposed 2.0L TDI settlement program: (1) a Consent Decree filed with the Court by the DOJ on behalf of the Environmental Protection Agency (EPA) and by the State of California by and through the California Air Resources Board (CARB) and the California Attorney General; (2) a Consent Order submitted by the FTC; and (3) a proposed class settlement agreement with the PSC on behalf of a nationwide settlement class of current and certain former owners and lessees of eligible 2.0L TDI Volkswagen and Audi vehicles. The parties believe that the class settlement as presented to the Court will provide a fair and reasonable resolution for affected Volkswagen and Audi customers. Volkswagen continues to work expeditiously to reach an agreed resolution for affected vehicles with 3.0L TDI V-6 diesel engines. On April 22, 2016, Volkswagen recognized total exceptional charges of €16.2 billion in its financial statements for 2015 for worldwide provisions related to technical modifications and repurchases, legal risks and other items as a result of the diesel matter. As noted at that time, due to the complexities and legal uncertainties associated with resolving the diesel matter, a future assessment of the risks may be different. "Today’s announcement is within the scope of our provisions and other financial liabilities that we have already disclosed, and we are in a position to manage the consequences. It provides further clarity for our U.S. customers and dealers as well as for our shareholders. Settlements of this magnitude are clearly a very significant burden for our business. We will now focus on implementing our TOGETHER-Strategy 2025 and improving operational excellence across the Volkswagen Group,” said Frank Witter, Chief Financial Officer of Volkswagen AG. The agreements announced today are not an admission of liability by Volkswagen. By their terms, they are not intended to apply to or affect Volkswagen's obligations under the laws or regulations of any jurisdiction outside the United States. Regulations governing nitrogen oxide (NOx) emissions limits for vehicles in the United States are much stricter than those in other parts of the world and the engine variants also differ significantly. This makes the development of technical solutions in the United States more challenging than in Europe and other parts of the world, where implementation of an approved program to modify TDI vehicles to comply fully with UN/ECE and European emissions standards has already begun by agreement with the relevant authorities. Volkswagen to Spend Up to $14.7 Billion to Settle Allegations of Cheating Emissions Tests and Deceiving Customers on 2.0 Liter Diesel Vehicles Settlements Require VW to Spend up to $10 Billion to Buyback, Terminate Leases, or Modify Affected 2.0 Liter Vehicles and Compensate Consumers, and Spend $4.7 Billion to Mitigate Pollution and Make Investments that Support Zero-Emission Vehicle Technology WASHINGTON – In two related settlements, one with the United States and the State of California, and one with the U.S. Federal Trade Commission (FTC), German automaker Volkswagen AG and related entities have agreed to spend up to $14.7 billion to settle allegations of cheating emissions tests and deceiving customers. Volkswagen will offer consumers a buyback and lease termination for nearly 500,000 model year 2009-2015 2.0 liter diesel vehicles sold or leased in the U.S., and spend up to $10.03 billion to compensate consumers under the program. In addition, the companies will spend $4.7 billion to mitigate the pollution from these cars and invest in green vehicle technology. The settlements partially resolve allegations by the Environmental Protection Agency (EPA), as well as the California Attorney General’s Office and the California Air Resources Board (CARB) under the Clean Air Act, California Health and Safety Code, and California’s Unfair Competition Laws, relating to the vehicles’ use of “defeat devices” to cheat emissions tests. The settlements also resolve claims by the FTC that Volkswagen violated the FTC Act through the deceptive and unfair advertising and sale of its “clean diesel” vehicles. The settlements do not resolve pending claims for civil penalties or any claims concerning 3.0 liter diesel vehicles. Nor do they address any potential criminal liability. The affected vehicles include 2009 through 2015 Volkswagen TDI diesel models of Jettas, Passats, Golfs and Beetles as well as the TDI Audi A3. “Today’s settlement restores clean air protections that Volkswagen so blatantly violated,” said EPA Administrator Gina McCarthy. “And it secures billions of dollars in investments to make our air and our auto industry even cleaner for generations of Americans to come. This agreement shows that EPA is committed to upholding standards to protect public health, enforce the law, and to find innovative ways to protect clean air.” “By duping the regulators, Volkswagen turned nearly half a million American drivers into unwitting accomplices in an unprecedented assault on our atmosphere,” said Deputy Attorney General Sally Q. Yates. “This partial settlement marks a significant first step towards holding Volkswagen accountable for what was a breach of its legal duties and a breach of the public’s trust. And while this announcement is an important step forward, let me be clear, it is by no means the last. We will continue to follow the facts wherever they go.” “Today’s announcement shows the high cost of violating our consumer protection and environmental laws,” said FTC Chairwoman Edith Ramirez. “Just as importantly, consumers who were cheated by Volkswagen’s deceptive advertising campaign will be able to get full and fair compensation, not only for the lost or diminished value of their car but also for the other harms that VW caused them.” According to the civil complaint against Volkswagen filed by the Justice Department on behalf of EPA on January 4, 2016, Volkswagen allegedly equipped its 2.0 liter diesel vehicles with illegal software that detects when the car is being tested for compliance with EPA or California emissions standards and turns on full emissions controls only during that testing process. During normal driving conditions, the software renders certain emission control systems inoperative, greatly increasing emissions. This is known as a “defeat device.” Use of the defeat device results in cars that meet emissions standards in the laboratory, but emit harmful NOx at levels up to 40 times EPA-compliant levels during normal on-road driving conditions. The Clean Air Act requires manufacturers to certify to EPA that vehicles will meet federal emission standards. Vehicles with defeat devices cannot be certified. The FTC sued Volkswagen in March, charging that the company deceived consumers with the advertising campaign it used to promote its supposedly “clean diesel” VWs and Audis, which falsely claimed that the cars were low-emission, environmentally friendly, met emissions standards and would maintain a high resale value. The settlements use the authorities of both the EPA and the FTC as part of a coordinated plan that gets the high-polluting VW diesels off the road, makes the environment whole, and compensates consumers. The settlements require Volkswagen to offer owners of any affected vehicle the option to have the company buy back the car and to offer lessees a lease cancellation at no cost. Volkswagen may also propose an emissions modification plan to EPA and CARB, and if approved, may also offer owners and lessees the option of having their vehicles modified to substantially reduce emissions in lieu of a buyback. Under the U.S./California settlement, Volkswagen must achieve an overall recall rate of at least 85% of affected 2.0 liter vehicles under these programs or pay additional sums into the mitigation trust fund. The FTC order requires Volkswagen to compensate consumers who elect either of these options. Volkswagen must set aside and could spend up to $10.03 billion to pay consumers in connection with the buy back, lease termination, and emissions modification compensation program. The program has different potential options and provisions for affected Volkswagen diesel owners depending on their circumstances: Buyback option: Volkswagen must offer to buy back any affected 2.0 liter vehicle at their retail value as of September 2015 -- just prior to the public disclosure of the emissions issue. Consumers who choose the buyback option will receive between $12,500 and $44,000, depending on their car’s model, year, mileage, and trim of the car, as well as the region of the country where it was purchased. In addition, because a straight buyback will not fully compensate consumers who owe more than their car is worth due to rapid depreciation, the FTC order provides these consumers with an option to have their loans forgiven by Volkswagen. Consumers who have third party loans have the option of having Volkswagen pay off those loans, up to 130 percent of the amount a consumer would be entitled to under the buyback (e.g., if the consumer is entitled to a $20,000 buyback, VW would pay off his/her loans up to a cap of $26,000). EPA-approved modification to vehicle emissions system: The settlements also allow Volkswagen to apply to EPA and CARB for approval of an emissions modification on the affected vehicles, and, if approved, to offer consumers the option of keeping their cars and having them modified to comply with emissions standards. Under this option in accordance with the FTC order, consumers would also receive money from Volkswagen to redress the harm caused by VW’s deceptive advertising. Consumers who leased the affected cars will have the option of terminating their leases (with no termination fee) or having their vehicles modified if a modification becomes available. In either case, under the FTC order, these consumers also will receive additional compensation from Volkswagen for the harm caused by VW’s deceptive advertising. Consumers who sold their TDI vehicles after the VW defeat device issue became public may be eligible for partial compensation, which will be split between them and the consumers who purchased the cars from them as set forth in the FTC order. Eligible consumers will receive notice from VW after the orders are entered by the court this fall. Consumers will be able to see if they are eligible for compensation and if so, what options are available to them, at VWCourtSettlement.com and AudiCourtSettlement.com. They will also be able to use these websites to make claims, sign up for appointments at their local Volkswagen or Audi dealers and receive updates. Consumer payments will not be available until the settlements take effect if and when approved by the court, which may be as early as October 2016. Emissions Reduction Program: The settlement of the company’s Clean Air Act violations also requires Volkswagen to pay $2.7 billion to fund projects across the country that will reduce emissions of NOx where the 2.0 liter vehicles were, are or will be operated. Volkswagen will place the funds into a mitigation trust over three years, which will be administered by an independent trustee. Beneficiaries, which may include states, Puerto Rico, the District of Columbia, and Indian tribes, may obtain funds for designated NOx reduction projects upon application to the Trustee. Funding for the designated projects is expected to fully mitigate the NOx these 2.0 liter vehicles have and will emit in excess of EPA and California standards. The emissions reduction program will help reduce NOx pollution that contributes to the formation of harmful smog and soot, exposure to which is linked to a number of respiratory- and cardiovascular-related health effects as well as premature death. Children, older adults, people who are active outdoors (including outdoor workers), and people with heart or lung disease are particularly at risk for health effects related to smog or soot exposure. NO2 formed by NOx emissions can aggravate respiratory diseases, particularly asthma, and may also contribute to asthma development in children. Zero Emissions Technology Investments: The Clean Air Act settlement also requires VW to invest $2 billion toward improving infrastructure, access and education to support and advance zero emission vehicles. The investments will be made over 10 years, with $1.2 billion directed toward a national EPA-approved investment plan and $800 million directed toward a California-specific investment plan that will be approved by CARB. As part of developing the national plan, Volkswagen will solicit and consider input from interested states, cities, Indian tribes and federal agencies. This investment is intended to address the adverse environmental impacts from consumers’ purchases of the 2.0 liter vehicles, which the governments contend were purchased under the mistaken belief that they were lower emitting vehicles. FTC’s Injunctive Relief: The FTC settlement includes injunctive provisions to protect consumers from deceptive claims in the future. These provisions prohibit Volkswagen from making any misrepresentations that would deceive consumers about the environmental benefits or value of its vehicles or services, and the order specifically bans VW from employing any device that could be used to cheat on emissions tests. The provisions of the U.S./California settlement are contained in a proposed consent decree filed today in the U.S. District Court for the Northern District of California, as part of the ongoing multi-district litigation, and will be subject to public comment period of 30 days, which will be announced in the Federal Register in the coming days. The provisions of the FTC settlement are contained in a proposed Stipulated Final Federal Court Order filed today in the same court.
  21. It has been a mixed few days at Audi. Last Friday, sources told Reuters that no evidence was found that Audi CEO Rupert Stadler knew about the illegal cheating software. Stadler was questioned earlier in the week by U.S. law firm Jones Day - the group brought in by Volkswagen to conduct an internal investigation. Stadler's questioning came around the same time as media reports saying that Audi was more entangled in the diesel emission scandal than previously thought. "Nothing burdensome against Stadler was found," said a source. Then on Monday, Audi's r&d head Stefan Knirsch stepped down from his post and left the company. As we reported last week , Knirsch reportedly knew about the illegal software and lied about under oath during an internal investigation. At the time, Knirsch was going to be suspended. In a statement, Audi said Knirsch would be leaving immediately. The company did not say the reason for his departure or who would take his place. Source: Reuters, 2
  22. It has been a mixed few days at Audi. Last Friday, sources told Reuters that no evidence was found that Audi CEO Rupert Stadler knew about the illegal cheating software. Stadler was questioned earlier in the week by U.S. law firm Jones Day - the group brought in by Volkswagen to conduct an internal investigation. Stadler's questioning came around the same time as media reports saying that Audi was more entangled in the diesel emission scandal than previously thought. "Nothing burdensome against Stadler was found," said a source. Then on Monday, Audi's r&d head Stefan Knirsch stepped down from his post and left the company. As we reported last week , Knirsch reportedly knew about the illegal software and lied about under oath during an internal investigation. At the time, Knirsch was going to be suspended. In a statement, Audi said Knirsch would be leaving immediately. The company did not say the reason for his departure or who would take his place. Source: Reuters, 2 View full article
  23. In the neverending saga that is the Volkswagen diesel emission scandal, Audi's head of R&D will be suspended this week due to knowing about the cheat used in the 3.0L TDI V6. German newspaper Bild am Sonntag (via Reuters) learned from sources that Stefan Knirsch knew about the software and lied under oath about it during an internal investigation. Bild says Knirsch has been asked to clear his desk. Not surprisingly, Volkswagen, Audi and Audi's works council declined to comment. Source: Bild am Sonntag via Reuters View full article
  24. In the neverending saga that is the Volkswagen diesel emission scandal, Audi's head of R&D will be suspended this week due to knowing about the cheat used in the 3.0L TDI V6. German newspaper Bild am Sonntag (via Reuters) learned from sources that Stefan Knirsch knew about the software and lied under oath about it during an internal investigation. Bild says Knirsch has been asked to clear his desk. Not surprisingly, Volkswagen, Audi and Audi's works council declined to comment. Source: Bild am Sonntag via Reuters
  25. The first person has been charged in the U.S.' Volkswagen diesel emission probe. Today at the U.S. Federal Court in Detroit, James Robert Liang, leader of diesel competence for Volkswagen from 2008 until June of this year entered a plea of guilty to conspiracy to defraud the U.S. government, commit wire fraud, and violate the Clean Air Act. According to grand jury indictment filed back in June and unsealed today, “Liang and his co-conspirators, including current and former employees, and others, agreed to defraud the U.S. and VW customers, and violate the Clean Air Act, by misleading the U.S. and VW customers about whether VW diesel motors complied with U.S. emissions standards,” prosecutors wrote. Documents showed Liang was on the team that developed the diesel engine at the center of this scandal, the EA 189 2.0L four-cylinder back in 2006. The team realized that the engine wouldn't meet the strict U.S. standards on nitrogen oxide emissions while also attracting “sufficient customer demand.” Thus the decision was made to develop and install the 'defeat device' software on the EA 189 to pass emission tests. This engine would be installed on various Volkswagen vehicles starting in 2009. In 2014, Liang's team would update the software to help cut down on warranty claims. Engineers believed the reason for the increase in claims was due to the vehicle operating with the defeat device on for too long. Around this time, U.S. regulators would begin asking Volkswagen questions about the discrepancies between the amount of emissions being emitted during lab tests and in real-world driving. Various Volkswagen employees either lied when talking with regulators. “I know VW did not disclose the defeat device to U.S. regulators in order to sell the cars in the U.S. That’s what makes me guilty,” said Liang to the court. Liang faces up to five years in jail and a fine of up to $250,000 or twice the gross gain or loss. In a plea agreement signed on August 31st, prosecutors say in exchange for his agreement to cooperate with the probe, the U.S. government agrees not to use any new information about Liang’s own criminal conduct during the sentencing hearing expected to take place on January 11th. Liang's cooperation could help out in the investigation and shine a light on more people involved. When asked for comment, Volkswagen spokeswoman Jeannine Ginivan declined. Source: Automotive News (Subscription Required), Bloomberg, The Detroit News View full article

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