Tag: volkswagen
EPA Accuses Fiat Chrysler Of Excess Diesel Emissions

EPA Accuses Fiat Chrysler Of Excess Diesel Emissions

NEW YORK/DETROIT (Reuters) – The U.S. Environmental Protection Agency on Thursday accused Fiat Chrysler Automobiles NV of illegally using hidden software to allow excess diesel emissions to go undetected, the result of a probe that stemmed from regulators’ investigation of rival Volkswagen AG.

FCA shares plummeted as the maximum fine is about $4.6 billion. The EPA action affects 104,000 U.S. trucks and SUVs sold since 2014, about one-sixth the vehicles in the Volkswagen case.

The EPA and California Air Resources Board told Fiat Chrysler it believes its undeclared auxiliary emissions control software allowed vehicles to generate excess pollution in violation of the law and each issued notices of violation.

The U.S. Justice Department is investigating, Fiat Chrysler said Thursday. New York Attorney General Eric Schneiderman said in a statement he is “deeply troubled” by the EPA findings and “will investigate the claims against Fiat Chrysler and stands ready to work with our state and federal partners.”

Fiat Chrysler Chief Executive Sergio Marchionne angrily rejected the allegations at a hastily-assembled conference call with reporters, saying there was no wrongdoing and the company never attempted to create software to cheat emissions rules by detecting when the vehicle was in test mode.

He characterized the dispute as whether the automaker had completely disclosed software that protects the engine, adding the company was planning updated software to address EPA concerns.

He said the EPA and the company could have settled the issue in “a more efficient way” without the EPA announcement, and he said “I’m really pissed off” about reports that equate FCA’s issues with VW’s.

“The way that it has been described, I think, has been unfair to FCA, and that is the thing that disturbs me most,” Marchionne said.

He also suggested regulators had a “belligerent” view of automakers. “We don’t belong to a class of criminals,” he said. “We’re not trying to break the bloody law.”

The company has no plans to stop selling 2016 U.S. diesel models.

EPA has reviews ongoing of other automakers’ emissions systems, but it is not clear if they have found any additional wrongdoing.

Regulators said FCA failed to disclose engine management software in 104,000 U.S. 2014-2016 Jeep Grand Cherokees and Dodge Ram 1500 trucks with 3.0-liter diesel engines. The undisclosed software results in increased emissions of nitrogen oxides (NOx).

Cynthia Giles, an EPA official, said Fiat Chrysler had an obligation to disclose the “illegal software” but has not decided whether to label them “defeat devices.”

The EPA said it found at least eight undisclosed pieces of software that can alter how a vehicle emits air pollution. Fiat Chrysler had recalled vehicles for one of the undisclosed software.

By contesting the charge, FCA will push the case into the administration of President-elect Donald Trump. It is not clear how Trump’s EPA will handle this or similar issues. Trump has nominated Oklahoma Attorney General Scott Pruitt, a critic of federal environmental regulation, to lead EPA.

Efraim Levy, analyst with CFRA, said FCA stands to “get a fresh start with the Trump administration.”

SHARES SLIDE

U.S.-listed shares were last down 10 percent, cutting their earlier losses. Milan-listed shares closed down 16 percent, weighing on European stock markets.

The EPA announcement comes amid closer scrutiny of automakers after Volkswagen AG admitted to cheating diesel emissions tests in 580,000 U.S. vehicles.

In 2015, EPA said it would review all U.S. diesel vehicles following an admission from Volkswagen that it installed software in cars allowing them to emit up to 40 times legally permissible level of pollution.

On Wednesday, Volkswagen agreed to pay $4.3 billion in criminal and civil fines and plead guilty to three felonies for misleading regulators and selling polluting vehicles.

Fiat Chrysler could face fines of $44,539 per vehicle if it is proven that it violated emissions rules.

European regulators have also raised questions about Fiat Chrysler diesels.

Last fall, Germany wrote a letter to the European Commission accusing FCA of using an illegal device to switch off exhaust treatment systems in diesel engines in Fiat and Jeep vehicles sold in Europe.

(Reporting by David Shepardson in New York and Bernie Woodall in Detroit; Additional reporting by Nick Carey in Chicago, Agnieszka Flak in Milan and Giles Guillaume in Paris; Editing by Nick Zieminski)

IMAGE: The Fiat logo is pictured at a car dealership at Motor Village in Los Angeles, California October 13, 2014.  REUTERS/Mario Anzuoni  

U.S. Judge Approves $14.7 Billion Settlement Over VW Diesel Vehicles

U.S. Judge Approves $14.7 Billion Settlement Over VW Diesel Vehicles

WASHINGTON (Reuters) – A U.S. federal judge on Tuesday approved Volkswagen AG’s record-setting $14.7 billion settlement with regulators and owners of 475,000 polluting diesel vehicles, and the German automaker said it would begin buying back the vehicles in mid-November.

The action by U.S. District Judge Charles Breyer in San Francisco marked the latest development in a scandal that has rocked VW since it admitted in September 2015 using secret software in its diesel cars to cheat exhaust emissions tests and make them appear cleaner than they really were.

Under the settlement first announced in June, Volkswagen agreed to spend up to $10.033 billion on the buybacks and owner compensation and $4.7 billion on programs to offset excess emissions and boost zero-emission vehicle infrastructure and other clean vehicle projects.

The affected vehicles emit up to 40 times legally allowable pollution levels. Volkswagen may also be allowed to repair vehicles if regulators approve fixes.

It represented the largest civil settlement worldwide ever reached with an automaker over allegations of misconduct and fraud toward vehicle owners.

In total, Volkswagen has agreed to date to spend up to $16.5 billion in connection with the diesel emissions scandal, including payments to dealers, states and attorneys for owners. The scandal rattled VW’s global business, harmed its reputation and prompted the ouster of its CEO.

The world’s second-largest automaker still faces billions more in costs to address 85,000 polluting 3.0 liter vehicles and U.S. Justice Department fines for violating clean air laws. It also faces lawsuits from at least 16 U.S. states for additional claims that could hike the company’s overall costs.

Breyer turned away objections from owners who thought the settlement did not provide enough money, saying the agreement “adequately and fairly compensates” owners. In addition to the pre-scandal “trade in” value of the vehicle, owners will also receive $5,100 to $10,000 in additional compensation. “Given the risks of prolonged litigation, the immediate settlement of this matter is far preferable,” Breyer wrote.

Volkswagen agreed to make up to $1.21 billion in payments to 652 U.S. VW brand dealers and $600 million to 44 U.S. states to address some state claims.

To date, nearly 340,000 owners have registered to take part in the settlement, and only about 3,500 owners have opted out. Volkswagen must fix or buy back 85 percent of the 475,000 vehicles under the agreement within two years or face additional costs.

Under the Justice Department agreement, VW will provide $2 billion over 10 years to fund programs to promote construction of electric vehicle charging infrastructure, development of zero-emission ride-sharing fleets and other efforts to boost sales of cars that do not burn petroleum.

VW also agreed to put up $2.7 billion over three years to enable government agencies and agencies on Native American tribal lands to replace old buses or to fund infrastructure to reduce diesel emissions and award states about $600 million.

Volkswagen spokeswoman Jeannine Ginivan said the automaker expects to begin buying back vehicles in mid-November. The automaker has hired 900 people, including one to be stationed at each dealership, to handle buybacks.

(Reporting by David Shepardson; Editing by Will Dunham)

Photo: A Volkswagen logo is pictured at the newly opened Volkswagen factory in Wrzesnia near Poznan, Poland September 9, 2016. REUTERS/Kacper Pempel

Volkswagen Managers Were Notified About Diesel Probe In May 2014: Sources

Volkswagen Managers Were Notified About Diesel Probe In May 2014: Sources

FRANKFURT (Reuters) – A high-ranking employee warned senior Volkswagen (VOWG_p.DE) managers in May 2014 that U.S. regulators might examine car engine software as part of an investigation into pollution levels, two sources familiar with the matter said on Sunday.

The warning came in the form of a letter, which was sent more than a year before the German carmaker’s public admission that its cars had been equipped with software to manipulate emission test results, the sources said, raising questions about how much senior managers knew about the scandal.

The U.S. Justice Department is suing the company for up to $46 billion for alleged violations of environmental law while regulators and prosecutors are looking to establish what role, if any, had been played by senior managers, including former Chief Executive Martin Winterkorn.

Volkswagen admitted in September 2015 to cheating pollution tests but has maintained that only a small number of employees were to blame and that there was no indication that board members were involved.

German newspaper Bild am Sonntag was first to report the existence of an internal letter warning senior managers about the investigation.

Citing documents from VW’s own investigation of the scandal, Bild am Sonntag said that an employee known internally as “Winterkorn’s fireman” had notified superiors about the probe.

“It can be assumed that the authorities will investigate VW systems to establish whether Volkswagen has implemented test-recognition software,” the newspaper said, citing the letter uncovered as part of an investigation by Jones Day, a law firm conducting the company’s internal investigation.

Two people familiar with the matter told Reuters on Sunday that they had knowledge of the Volkswagen letter but that it is not certain that Winterkorn, who resigned shortly after the scandal surfaced, had seen the letter.

The letter was sent from the carmaker’s product quality and safety department, one of the sources said.

A VW spokesman said that the company does not comment on ongoing investigations, adding that it would report on its internal inquiry in the second half of April.

Representatives for Winterkorn were not immediately available for comment.

(Reporting by Frankfurt bureau and Jan Schwartz in Hamburg; Writing by Edward Taylor and Harro ten Wolde; Editing by Alexander Ratz and David Goodman)

Photo: The logo of German carmaker Volkswagen is seen on a wheel at a showroom of Swiss car importer AMAG in Duebendorf, Switzerland February 12, 2016. REUTERS/Arnd Wiegmann

Volkswagen To Offer Generous Compensation For U.S. Customers: Fund Head

Volkswagen To Offer Generous Compensation For U.S. Customers: Fund Head

FRANKFURT (Reuters) – Volkswagen will offer generous compensation packages to the roughly 600,000 U.S. owners of diesel vehicles whose emissions are over the legal limit, the head of its claims fund told a German paper.

The German car maker has still not decided whether vehicle owners will be offered cash, car buy-backs, repairs or replacement cars, Kenneth Feinberg told the Frankfurter Allgemeine Sonntagszeitung.

Feinberg previously headed the compensation funds for the Sept. 11, 2001 attacks, BP’s Deepwater Horizon oil spill and General Motors’ ignition switch crashes.

On Friday, Volkswagen postponed the publication of its 2015 results and delayed its annual shareholders’ meeting as it struggles to put an exact price on its emissions scandal.

More than four months after the scandal broke in the United States, Europe’s leading car maker has still not won approval for a fix for any of the vehicles. Last week it named a new head of its U.S. legal department to help resolve the case.

Feinberg told the paper he was unlikely to meet his goal of setting up the claims fund within 60 to 90 days, saying: “My hands are tied as long as VW and the authorities have not overcome their differences.”

He said he expected an overwhelming majority to accept the eventual offer, and that VW had given him full authority to set the level.

“Look at my prior cases: 97 percent of the victims of Sept. 11 accepted my offer. At GM and BP it was more than 90 percent, too. That has to be my target for VW,” Feinberg said.

“It is a purely business transaction, less emotional. I see that from emails I get from vehicle owners, who say things like: ‘Mr. Feinberg, I know I haven’t lost a relative, I just want to be treated fairly.’ They are all quite reasonable.”

SHARES FALL SHARPLY

Feinberg said he had not yet decided whether to consider claims that the emissions damaged the health of claimants.

“I am inclined to not accept that and tell such people they should sue Volkswagen if they want to,” he said.

Uncertainty about the financial impact of the scandal on VW’s accounts has increased since the start of the year, sending its shares 26 percent lower.

However, Norway’s $850 billion sovereign wealth fund, the world’s largest, told the paper it would remain invested in Volkswagen, in which it holds 1.2 percent.

“VW is an important company for Germany, Europe and the world. That’s why we will keep our stake as long as the fund and the company exist,” the fund’s CEO Yngve Slyngstad said.

But he added that since 2008 the fund has criticized the ownership structure at Volkswagen, where the Porsche and Piech families hold 31.5 percent of the capital but control 50.7 percent of voting rights.

U.S. regulators last month rejected VW’s original plan to fix 2.0 liter diesel cars equipped with software designed to conceal the cars’ true emissions, raising concerns that VW may have to carry out a larger number of costly buy-backs.

VW has already promised goodwill packages worth $1,000 to tens of thousands of VW owners in the United States, and the European Commission and European lawmakers have urged it to consider making a similar offer to owners in Europe.

The group set aside 6.7 billion euros ($7.5 billion) in the third quarter of 2015 to cover repair costs for vehicles worldwide. Pieper said this might need to be topped up by another 2-3 billion euros.

(Reporting by Arno Schuetze; Editing by Kevin Liffey)

Photo: The Volkswagen Chattanooga Assembly Plant in Chattanooga, Tennessee November 4, 2015. REUTERS/Tami Chappell