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Volkswagen boss won’t rule out sale to Fiat-Chrysler

CEO Matthias Mueller has changed his tune from just a week ago.

VW agrees to pay 3.0L diesel owners $7,000 to $16,000 after...

A settlement reached late Tuesday will give VW an opportunity to fix some cars.

EPA: Fiat Chrysler diesels have software to thwart emissions controls

Enlarge / STERLING HEIGHTS, MI - AUGUST 26: Fiat Chrysler Automobiles CEO Sergio Marchionne speaks at an event celebrating the start of production of three all-new stamping presses at the FCA Sterling Stamping Plant August 26, 2016 in Sterling Heights, Michigan. (Photo by Bill Pugliano/Getty Images)Bill Pugliano reader comments 89 Share this story On Thursday the US Environmental Protection Agency (EPA) announced that Fiat Chrysler (FCA) diesel vehicles were found to have "at least eight" instances of undisclosed software that modified the emissions control systems of the cars.

The vehicles implicated in the EPA's Notice of Violation (NOV) include 2014, 2015, and 2016 diesel Jeep Grand Cherokees, as well as Dodge Ram 1500 trucks with 3.0-liter diesel engines.

The allegations involve 104,000 vehicles, the EPA said. The EPA says it's still in talks with FCA and hasn't ordered the company to stop selling affected cars yet, nor is it officially calling the software a "defeat device" just yet until FCA provides a more detailed explanation. In a press conference, agency officials said that the undisclosed software was discovered after September 2015, when the EPA and the California Air Resources Board (CARB) began doing additional testing on vehicles in the wake of the Volkswagen Group scandal. VW Group was discovered to have almost 600,000 diesel vehicles on US roads with some kind of illegal software on them.

The software allowed VW Group's cars to pass emissions testing under lab conditions but would reduce the effectiveness of emissions controls under real-world driving conditions, causing the cars to emit nitrogen oxide (NOx) far in excess of federal limits. According to the EPA, FCA's undisclosed software works similarly, too.

EPA Assistant Administrator Cynthia Giles told press Thursday morning that the "software is designed such that, during the emissions test, Fiat Chrysler’s cars meet the standards," for NOx emissions. However, the "software reduces the effectiveness of emissions controls when driving at high speed or for long durations," she added. These kinds of workarounds are not uncommon for car makers to use and are not illegal if they're properly disclosed and approved by the EPA.

But efforts to meet emissions standards have driven automakers to install undisclosed devices illegally for decades.
In fact in the 1970s, Chrysler—along with GM, Ford, American Motors, Nissan, and Toyota—was reprimanded by the EPA for installing defeat devices in its cars to "defeat the effectiveness of emission control systems under conditions not experienced during EPA’s certification testing." In some instances the defeat devices helped the cars start more easily in cold weather, in others, time-delay switches cut the emissions control systems while the cars shifted from low to high gears. In Europe, too, rules allow diesel vehicles to cut the emissions control system under certain conditions like cold weather.

Automakers have toed a line, though, using emissions control software where "cold" weather means as high as 64 degrees Fahrenheit. Giles noted during the EPA's press conference that the agency has tested other diesel vehicles since the Volkswagen scandal was made public and found no violations. "It is by no means impossible to make a clean diesel vehicle that meets our standards," she said. In a statement (PDF), FCA said it would continue to work with the EPA to resolve the issue. "FCA US diesel engines are equipped with state-of-the-art emission control systems hardware, including selective catalytic reduction (SCR).

Every auto manufacturer must employ various strategies to control tailpipe emissions in order to balance EPA’s regulatory requirements for low nitrogen oxide (NOx) emissions and requirements for engine durability and performance, safety and fuel efficiency.

FCA US believes that its emission control systems meet the applicable requirements." FCA added that it had spent "months providing voluminous information" to the EPA and other regulators.

The company said it had also made proposals to fix the issues, including "developing extensive software changes to our emissions control strategies that could be implemented in these vehicles immediately to further improve emissions performance." FCA has not yet been sued, but the EPA says it could be "liable for civil penalties and injunctive relief for the violations alleged in the NOV [Notice of Violation]." Correction: This story originally said the EPA found the software on the FCA diesels was illegal.
In fact, the EPA is still determining whether the software itself was illegal. However, Fiat Chrysler violated EPA rules by not disclosing the software.

DOJ indicts 6 Volkswagen executives, automaker will pay $4.3 billion in...

photo reader comments 23 Share this story The US Justice Department announced on Wednesday that Volkswagen would pay $4.3 billion in civil and criminal fines and plead guilty to three criminal charges pertaining to the automaker’s diesel emissions scandal.

The DOJ also announced an indictment of six high-level VW Group executives, who are charged with lying to regulators and destroying documents. Working with US Customs and Border Patrol, the DOJ brought against VW Group charges of defrauding the US government, committing wire fraud, and violating the Clean Air Act.

As part of the settlement, VW Group has agreed to submit to three years of criminal probation, which will require the German automaker to "retain an independent monitor to oversee its ethics and compliance program." It has also agreed to cooperate with the DOJ's ongoing investigations into individual executives that may have been involved with the scandal. For the past 17 months, the automaker has maintained that none of its executives were involved with the diesel scandal, in which illegal software was discovered on Volkswagens, Audis, and Porsches to alter the cars' emissions controls depending on whether the cars sensed they were under real-world driving conditions or lab conditions.
Instead, VW Group claimed, "rogue engineers" were responsible for the placement of the emissions cheating software on the cars. After the software was discovered, VW Group admitted that its cars did have mechanisms to reduce the effectiveness of the emissions controls on its so-called "Clean Diesel" cars.

Earlier this year, the Justice Department and a class-action group of consumers pursued civil penalties from VW Group, leading to historic settlements of many billions of dollars earlier this year. This new agreement repudiates VW Group's assertion that its executives were wholly innocent of tampering with the cars' emissions control systems.

The indicted VW Group executives include Richard Dorenkamp, Bernd Gottweis, Jens Hadler, Heinz-Jakob Neusser, Jürgen Peter, and Oliver Schmidt.
Schmidt, a former emissions compliance executive for VW Group, is the only executive currently in the US—he was arrested over the weekend by the FBI on charges that he knew about the cheating software and lied to federal regulators about it. Among the other five men indicted, Richard Dorenkamp, head of VW’s technical development for lowest emission engines, was suspended from VW Group in 2015; Bernd Gottweis, a retired VW Group executive, apparently warned CEO Martin Winterkorn that the company's cars could be found with defeat devices; Jens Hadler worked as executive director of powertrain development at Volkswagen in 2008; Heinz-Jakob Neusser oversaw Volkswagen research and development; and Jürgen Peter was a Volkswagen engineering executive who implored his colleagues via internal e-mail to "Come up with the story please!" when the California Air Resources Board started pressing Volkswagen on discrepancies in emissions tests that persisted after VW Group issued a "fix." So far, Volkswagen has agreed to pay $15 billion to compensate victims of the 2.0L diesel engine scandal, $1 billion to settle charges related to 3.0L diesel vehicles (although owner compensation hasn’t been decided on yet), and $1.2 billion to compensate US Volkswagen dealers, who were unaware that the cars they were selling were not in compliance with US emissions regulations. One engineer, James Liang, has pleaded guilty. According to the Associated Press, this fresh $4.3 billion settlement "is the largest ever levied by the government against an automaker, eclipsing the $1.2 billion fine against Toyota in 2014 over safety issues related to unintended acceleration." Assistant Attorney General Leslie Caldwell, speaking at the DOJ's press conference, said that VW Group executives were largely responsible for the scandal, describing a company culture where "lower-level people" expressed concerns and "higher-level people" decided to move forward with planting the illegal software.

VW exec arrested during Miami vacation over emissions scandal

reader comments 46 Share this story Enlarge / In this handout provided by the Broward Sheriff's Office, suspect Oliver Schmidt, an executive for Volkswagen poses in this undated booking photo.
Schmidt was arrested January 7, 2017 in Florida and is expected to be charged with conspiracy and fraud in the Volkswagen emissions scandal.
Schmidt was formerly a key emissions compliance manager for VW in the U.S. (Photo by Broward Sheriff's Office via Getty Images) Handout/Getty Images On Saturday night, the FBI arrested Oliver Schmidt, a former emissions compliance executive for Volkswagen Group, as he waited to catch a plane back to Germany at Miami International Airport in Florida.

The arrest is a major setback for VW Group, which has thus far been able to shelter most of its high-level executives from individual prosecution by US authorities. In a Monday appearance in US District Court in Miami, a Justice Department lawyer said that an attorney for Schmidt “had alerted government lawyers that the executive would be in Florida for vacation,” according to the Wall Street Journal. Schmidt, 48, was charged with defrauding the United States, wire fraud, and violating the Clean Air Act. He allegedly played a central role in hiding from US regulators the fact that some 500,000 Volkswagen and Audi vehicles with 2.0L diesel engines sold in the US were equipped with various types of illegal software designed to help the cars pass their emissions tests in a lab and to kill the emissions control system on the cars when they were driving on the road under “real world” conditions. Schmidt allegedly knew of this illegal software since VW Group began using it in Audis in 2009, but the charges the US Government has lodged against him have focused on his involvement between April 2014 and when news of the scandal broke in September 2015.

As an emissions compliance executive for VW Group, Schmidt was based in Detroit, Mich. and was alerted when the International Council for Clean Transportation (ICCT) and West Virginia University produced a report finding that many VW Group diesels showed an alarming divergence from their reported emissions levels when tested in real world driving scenarios. According to the complaint against him (PDF), Schmidt allegedly wrote to other VW Group managers at the time, “It should first be decided whether we are honest.
If we are not honest, everything stays as it is.” For the next year, VW Group danced around regulators’ questions about the study from ICCT and West Virginia University, claiming that the issue could be solved through a minor, voluntary recall. Later in the year, Schmidt wrote an e-mail to the then-CEO of VW Group of America analyzing the “Possible Consequences/Risks” of fallout from the ICCT and West Virginia University Study.
Schmidt added that modifications to the software in Generation 1 and Generation 2 engines “can achieve reductions of NOx emissions under RDE [Real Driving Emissions], but not compliance with the limits.” Even to this day, VW Group has only been able to certify a fix for Generation 3 vehicles—all 2015 models—that will bring the cars into compliance with federal emissions standards. According to the complaint, in August 2015, just a month before the Environmental Protection Agency (EPA), Schmidt traveled to Michigan to meet with a member of the California Air Resources Board (CARB), which had been aggressive in pursuing VW Group’s emissions discrepancies. “Schmidt offered technical reasons and excuses such as ‘irregularities’ or ‘abnormalities’ for the discrepancy without revealing the fundamental reason for the higher NOx measurements on the road: software intentionally installed in VW vehicles so the vehicles could detect and evade emissions testing.” The accusations in the complaint are bolstered by claims from two unnamed cooperating witnesses and James Liang, a engineer for Volkswagen that pleaded guilty to working on the diesel conspiracy in September. Liang has agreed to testify against VW Group to avoid prosecution in the US. Volkswagen has already settled two civil complaints over its illegal software in 2.0L and 3.0L diesel VWs, Audis, and Porsches.

The largest, concerning the 2.0L diesels, will set the company back $15 billion.

Earlier this month, the Wall Street Journal reported that Volkswagen and the Justice Department were considering another billion-dollar settlement based on a criminal investigation of the company.

Charges in that case have not been filed yet, however. Listing image by Handout/Getty Images

70,000 diesel VWs get approval for a fix requiring software, hardware...

Erik Breader comments 0 Share this story Nearly a year and a half has passed since the Environmental Protection Agency (EPA) publicly announced that Volkswagen had cheated on its federally-required emissions tests for 2.0L diesel vehicles produced between 2009 and 2015.

And, just today, the EPA and the California Air Resources Board (CARB) announced the first fix that could make street-legal the 475,474 diesels that were caught up in the scandal. Unfortunately, the fix only pertains to 70,000 “Generation 3” diesels from VW Group, all of which were made in 2015.

The rest of the 405,000-or-so customers with older 2.0L diesels will have to keep waiting for a fix, unless they want to sell their cars back to Volkswagen. The news of the fix comes months after the approval of a $15 billion settlement between VW Group and the Justice Department.

That settlement set aside approximately $10 billion to buy back 2.0L diesels at the price the cars were worth before the scandal was made public, as well as compensate each purchaser with somewhere between $5,100 and $10,000, depending on the make and model of the car. But the settlement also provided another option for owners—if they didn’t want to sell their car back to VW Group, they could have the car fixed, provided that CARB and the EPA approved the fix.

That option has proven to be more difficult in practice because, according to the settlement, VW Group has to not only dramatically reduce the release of nitrogen oxide (NOx) from the diesel engines, but also minimize wear and tear on the engine while still providing gas mileage close to what the car experienced before the fix. According to the EPA, the fix for the 70,000 Generation 3 cars will be carried out in two waves: the first wave is ready to be deployed today and involves a software update that will “remove the defeat device software and replace it with software that directs the emission controls to function effectively in all typical vehicle operation.” The second wave will be ready “about a year from now.” Per the EPA, it will involve a further software update as well as “a new diesel particulate filter, diesel oxidation catalyst, and NOx catalyst.” The cars that are able to take advantage of this fix are Volkswagen’s 2015 diesel Beetle, Beetle Convertible, Golf, Golf SportWagen, Jetta, and Passat, as well as Audi’s 2015 diesel A3. What’s remarkable is that the EPA and CARB are claiming that this fix will not only curb excess emissions by 80 to 90 percent, but that the fix “will not affect vehicle fuel economy, reliability, or durability.” “EPA and CARB confirmed those conclusions through independent testing and analysis at their own laboratories,” the EPA wrote in a press release. Even if a fix is costly, it’s in VW Group’s interest to find ways to bring their cars inline with US emissions regulations so the company can reduce the cost, even by a small amount, of purchasing back cars from customers who don’t want their diesels fixed.

The June settlement with the Department of Justice stated that VW Group cannot resell cars with defeat devices on them after the automaker has bought them back from customers—even in other countries where emissions regulations may be less strict.

But if VW Group can repair the cars it purchases back from customers to remove the defeat devices and meet greener standards, that restriction against reselling in other markets is lifted. The news that 70,000 of VW Group’s cars are fixable comes along with a report from the Wall Street Journal.

The report cites anonymous sources who say that VW Group and the Justice Department may soon reach a settlement in an expected criminal case based on a investigation of the German company by American Justice Department officials.

The settlement could involve a payout of several billion dollars in addition to what VW Group has already paid, the WSJ reports.

Criminal charges could include “wire fraud and misleading government officials,” a source told the paper. Thus far, only one individual, former VW Group engineer James Liang, has been named in a criminal case involving the diesel emissions scandal.

VW agrees to $1 billion settlement over 3.0L diesels from emissions...

Erik Breader comments 1 Share this story Volkswagen defeat device scandal Sources say VW Group reaches agreement on fix for 80,000 diesel vehicles Regulators investigating new emissions irregularities in automatic transmission Audis 13 months after VW’s emissions scandal, judge approves $15 billion settlement US VW probe finds criminal wrongdoing, regulators work to settle Massachusetts, New York, Maryland accuse Volkswagen execs in fresh lawsuits View more storiesOn Tuesday, US District Judge Charles Breyer announced that Volkswagen Group and regulators had reached a $1 billion settlement over a portion of the 80,000 3.0L diesel vehicles that are still driving on US roads equipped with illegal emissions-system-defeating software. VW Group says it will buy back 20,000 of those cars.

The German company hopes to offer a fix for the remaining 60,000, although approval for the fix is still pending the approval of the Environmental Protection Agency (EPA). This tracks with earlier rumors that VW Group would buy back 20,000 older Audi and VW SUVs due to the more complicated nature of the fix that would be required to make those cars compliant with federal emissions standards.

Those same rumors suggest that the remaining 60,000 cars could be brought into compliance with a mere software fix, potentially saving VW Group billions in buyback costs or more involved fixes. Cynthia Giles, an EPA assistant administrator, said that the total cost for any fixes, buybacks, and additional compensation from VW Group for the 3.0L diesels will total around $1 billion, according to Reuters.

There was no word on how much additional compensation owners of 3.0L vehicles might expect from VW Group. In June the German automaker agreed to a much larger settlement—almost $15 billion over some 475,000 2.0L diesel vehicles that also had emissions-system-defeating software on them.

Those VW and Audi owners are entitled to between $5,100 and $10,000 in additional compensation on top of a fix or a buyback of their cars. Today, VW Group agreed to pay the EPA $225 million to mitigate the cost of the excess pollution that the company’s 3.0L vehicles caused.
In a separate agreement with the state of California, VW Group also agreed to sell an average of 5,000 electric vehicles in the state through 2025 and to pay the Air Resources Board $25 million.

Due to rules set in the ’60s, California is the only state that is allowed to set air regulation standards more stringent than the EPA’s. With VW’s new settlement, Judge Breyer also announced that Volkswagen’s parts maker, Robert Bosch GmbH, had agreed to a settlement with regulators.

Bosch has been accused of furnishing VW Group with components that it knew would contribute to circumventing US pollution laws.

Bosch did not say how much it had settled for, and neither did it accept liability or admit guilt on Tuesday. Reuters reported that the settlement is expected to be worth more than $300 million. Just yesterday, VW Group reached a settlement with Canadian antitrust authorities for $1.57 billion. One hundred and five thousand of the affected diesel vehicles had been sold in Canada when news of VW Group's emissions cheating broke. Ottawa authorities have accused the company of making false and misleading claims to customers about the eco-friendly aspects of its cars.

New challenges surface for VW, including a possible new defeat device...

RoadOverreader comments 21 Share this story Last week was touchy for Volkswagen Group and its profitable Audi brand. Yesterday, the German magazine Bild Am Sontag reported that the California Air Resources Board (CARB) had discovered that unspecified Audi vehicle models were running illegal software to bring carbon dioxide (CO2) emissions within legal limit under laboratory conditions.

The software, according to Bild Am Sontag, also killed CO2 emissions controls while the Audis were driven under normal conditions, much like the defeat device scandal involving VW, Audi, and Porsche vehicles that was exposed last September. This illegal software was apparently found in both gas and diesel Audi models produced up until May 2016. Neither Audi nor CARB has confirmed the reports to any outlet, including Ars Technica. The Wall Street Journal, however, spoke to anonymous sources that seemed to confirm the German magazine’s claims. Reports surfaced last November that some 800,000 Volkswagen vehicles in Europe may have been running with falsified CO2 data.

Those were said to include VW, Audi, Seat, and Skoda vehicles, most of which were diesels.

This new information concerns Audis in the US, and it includes gas vehicles as well.

According to the WSJ, “CARB technicians conducting lab tests on Audi’s vehicles made them react as if on a road by turning the steering wheel... When the cars deviated from lab conditions, their CO2 emissions rose dramatically.” WSJ is uncertain how seriously CARB is taking the discovery.
In a separate report yesterday, Reuters reported that CARB had made its discovery earlier this year. In a statement to Ars, CARB spokesperson David Clegern wrote that the agency can’t comment on an ongoing investigation. He added that CARB has been testing vehicles from all manufacturers “to determine if there are undisclosed auxiliary emissions control devices (AECDs) or defeat devices that impact those emissions.” Clegern continued: The new screening procedures are in addition to the standard certification emissions test cycles.
If illegal AECDs or defeat devices are discovered, CARB will aggressively pursue the investigation and require the manufacturer to correct the violations at its own expense.
In addition, the manufacturer may be subject to penalties, as provided by law. The CARB-Volkswagen news was preceded this weekend by news that VW Group’s former chief financial officer (CFO) Hans Dieter Pötsch is under investigation.

According to the New York Times, he is under investigation for allegedly violating securities laws by “failing to notify shareholders quickly enough of the financial risks of the diesel emissions cheating scandal.” Pötsch became a chairman on the company’s supervisory board just weeks after VW Group was accused of installing defeat devices on diesel vehicles to help them pass nitrogen oxide (NOx) emissions tests in markets around the world. Pötsch is one of a few top executives—including VW Group CEO Martin Winterkorn and Herbert Diess, a member of the company’s management board—who are openly being investigated.

Earlier this year, a former Volkswagen engineer, James Liang, became the first and thus far only VW employee to be found guilty of wrongdoing in the scandal. Even the known parts of VW Group’s ongoing scandal are still mired in negotiations and bureaucracy. Last week, US District Judge Charles Breyer declared that VW Group had until Nov. 30 to propose a plan to get 80,000 3.0L diesel vehicles off the road—whether that means fixing the cars or buying them back. Judge Breyer expressed confidence that VW Group would return to the court with “what I hope will be very good news.” Those 80,000 cars are separate from the roughly 475,000 2.0L diesel vehicles that also used illegal software to manipulate emissions.
VW Group settled that issue for nearly $15 billion—including $10.033 billion to buy the affected vehicles back and more than $4.7 billion in fines and mitigation payments.

13 months after VW’s emissions scandal, judge approves $15 billion settlement

The.Comedianreader comments 17 Share this story On Tuesday morning, US District Judge Charles Breyer gave final approval on a $14.7 billion settlement in the Volkswagen Group diesel emissions scandal that broke last September.

The German automaker outfitted many of its diesel VWs and Audis with illegal software that reduced the cars’ emissions in the lab but spewed up to 40 times the legal limit of nitrogen oxide (NOx) on the road. The automaker said that with the judge’s approval, it would begin buying back affected diesels by mid-November. According to the terms of the settlement, VW Group has set aside $10.033 billion to buy back 475,474 2.0L diesel TDI vehicles at the value the car was worth in September 2015 before the EPA made public VW Group’s misdeeds. (That number is a bit smaller in practice because about 3,500 customers have opted out of the program thus far according to Reuters, possibly with the hope of suing Volkswagen outside of this consumer class action.) Consumers and lessees will also get an additional payout of between $5,100 and $10,000 depending on the model and year of their car. The settlement does not include some 80,000 3.0L diesel VWs, Audis, and Porsches that were also equipped with illegal software—lawyers for VW Group, the Department of Justice, the Environmental Protection Agency, the California Air Resources Board (CARB), and consumers are still hashing that out. When plaintiffs announced the settlement with VW Group in June, they added that customers could also opt to have their diesels fixed so that the cars would conform to US emissions regulations.

Those customers would also receive the additional payout and they’d get to keep their cars.

Thus far, however, the EPA and CARB haven’t approved any fix that VW Group has offered, although VW Group lawyers contend that negotiations are ongoing. VW Group can’t resell any of the diesels it buys back from customers until it has an EPA-approved fix, the settlement stipulates. The deal also has VW Group put up an additional $4.7 billion in federal fines and funding for zero-emissions and alternative energy research.

California, which is home to about 71,000 of the affected diesels and whose Air Resources Board played an integral role in discovering VW Group’s deception, will get $1.2 billion of the $4.7 billion.
In a statement, CARB wrote, “About $381 million will be spent on projects to reduce smog-producing pollution, such as incentivizing clean heavy-duty vehicles and equipment in disadvantaged communities.

Approximately $800 million (ZEV Investment Commitment) will be invested to advance California’s groundbreaking Zero Emission Vehicle (ZEV) programs. "VW will make these payments and investments in installments over several years, and the two sums together will provide funding to mitigate all past and future environmental harm, including harm to California’s clean vehicle market, that resulted from VW’s cheating," the air regulator said. In a statement, Elizabeth Cabraser, lead counsel for consumer plaintiffs in the case, said, “We are very pleased the Court has granted final approval to this historic settlement that holds Volkswagen accountable for its illegal behavior and breach of consumer trust. We encourage all class members to take advantage of the significant compensation this settlement provides, which also fixes or removes these polluting cars from our roads.

Those who wish to participate in the settlement have until September 1, 2018, to submit their claims.” VW Group also had reason to celebrate the approval of the deal, as it reduces the uncertainty that the company will face in the future. Hinrich J. Woebcken, president and CEO of Volkswagen Group of America, said that “Volkswagen is committed to ensuring that the program is now carried out as seamlessly as possible for our affected customers and has devoted significant resources and personnel to making their experience a positive one.” Reuters reports that the company has hired 900 people to implement the buybacks, placing at least one employee dedicated to buying back diesels at each dealership. It doesn’t mean that VW Group’s legal woes are totally over, of course.
Individual states have begun to sue the company for deceptive practices, and the German automaker just this month agreed to pay 652 Volkswagen dealers a total of $1.21 billion for their losses.

Hundreds of VW dealers could get $1.85 million each from diesel...

Caribbreader comments 0 Share this story Late last Friday, Volkswagen Group agreed to pay 652 Volkswagen dealers a total of $1.21 billion in a settlement that was proposed earlier this summer.

Each dealer would receive approximately $1.85 million. The settlement is related to the emissions scandal that broke over a year ago—VW Group was producing diesel Jettas, Beetles, Golfs, and Passats, as well as Audis and Porsches that were giving off significantly more nitrogen oxide (NOx) than the company claimed to the Environmental Protection Agency (EPA).

To goose the numbers, the cars were outfitted with illegal software that engaged the emissions control systems on the cars when they were being tested in the lab but relaxed emissions controls while the cars were on the road. When the EPA announced that it discovered VW Group’s defeat devices, Volkswagen dealers across the US were suddenly left with cars they couldn’t sell sitting on their lots. Lawyers for the dealers also argued that they should be compensated for VW’s tarnished image, which hurt their sales. The settlement deal still has to be approved by a judge before it’s finalized.

Dealers will also have the option to opt out if they want to sue Volkswagen individually. This settlement is separate from a $15 billion settlement that VW Group agreed to over the summer, which included more than $10 billion to compensate customers who bought VW’s 2.0L diesels and other money set aside in mitigation fines and to fund zero-emissions vehicles and infrastructure. According to the Los Angeles Times, a separate filing on Friday indicated that some 311,000 VW owners of the 475,474 eligible have registered to receive compensation from the company. Only 3,300 people have opted out.

Customers will have the option to either sell their cars back to VW at the price the car was worth before the scandal hit, or, if VW can get a fix approved by the EPA, they can have their cars fixed.

All customers will receive additional compensation.

Volkswagen engineer pleads guilty in emissions scandal [Updated]

James Liang worked for Volkswagen's Wolfsburg plant while he developed diesel engines.Bruno Kussler Marques reader comments 34 Share this story In a Detroit District Court today, 62-year-old engineer James Robert Liang pleaded guilty to conspiracy to defraud the government, commit wire fraud, and violate the Clean Air Act. Liang, currently a California resident, worked for Volkswagen’s diesel development department in Wolfsburg, Germany from 1983 to 2008. Volkswagen Group has been beset by scandal since last September, when the Environmental Protection Agency (EPA) made public that VW had been including illegal software in diesel Volkswagens and Audis. The software detected when the cars were being tested in a lab so that they could pass emissions tests, but once the cars hit real-world conditions, the software circumvented the emissions control system to spew large amounts of nitrogen oxide (NOx) into the atmosphere. According to the plea agreement (PDF), in 2006 Liang and others began building the EA 189 diesel engine that has been the center of the controversy. When the engineers realized they couldn’t meet consumer expectations and US air quality standards at the same time, they began looking into using illegal software (often known in the auto industry as a “defeat device”). By 2008, Liang worked to “calibrate and refine the defeat device.” Later that year, he moved to the US to help with “certification, testing, and warranty issues” for the company’s new diesels. US prosecutors assert that when Liang and his fellow engineers met with the EPA regulators in 2007 in Michigan to describe the diesel technology that VW’s cars used, they never mentioned any software that enabled the cars’ emissions control systems during lab testing while reducing their efficacy during real-world driving. The illegal software began showing up in 2009-model VW diesels and was present in VW diesels until the scandal was discovered and made public in 2015. “During this time, Liang and his co-conspirators knew that VW marketed VW diesel vehicles to the US public as ‘clean diesel’ and environmentally-friendly, and [VW] promoted the increased fuel economy,” the plea agreement says. Nearly 500,000 2.0 L diesels have illegal software on them. 3.0L diesel vehicles made by Volkswagen Group have also been discovered with defeat devices, but those models are not mentioned in Liang's plea agreement. An interesting wrinkle in the prosecutors’ claims is that early VW diesel owners began experiencing problems with their emissions control systems as their vehicles grew older, causing increased warranty claims for the company. Allegedly, some of Liang’s peers thought this was because the cars weren’t switching over to the more-polluting “road mode” and were getting stuck in “testing mode,” in which the emissions control system was fully effective. “Liang worked with his co-conspirators to enhance the defeat device to allow the vehicle to more easily recognize when the vehicle was no longer in testing mode,” the plea agreement states. As part of the agreement, Liang will cooperate with the US in further investigations of the VW Group emissions scandal. If he complies, no further evidence can be used against him. He’s set to be sentenced on January 11 and could get up to five years in prison. Liang has submitted the first guilty plea for an individual in the Volkswagen scandal. Top executives at the company have blamed individual engineers for the defeat devices, but attorneys general in New York, Maryland, and Massachusetts claim that Volkswagen’s top officials knew much about the secret software. Update, 3:45 p.m. EDT: In an e-mail to Ars Friday afternoon, Liang's Lawyer, Daniel V. Nixon, commented "Mr. Liang came to court in Detroit today to accept responsibility for his actions. He is one of many at Volkswagen who got caught up in the emissions scandal and he is very remorseful for what took place."

US VW probe finds criminal wrongdoing, regulators work to settle

Erik BVolkswagen defeat device scandal Massachusetts, New York, Maryland accuse Volkswagen execs in fresh lawsuits Air regulator rejects Volkswagen’s latest plan to fix 3.0L diesels GM says it misstated fuel economy, Opel denies emissions cheating allegations Norway’s gigantic wealth fund will sue Volkswagen over dieselgate After losing $6.2B in 2015, Volkswagen pledges $18B to address emissions issue View more storiesreader comments 13 Share this story On Monday, the Wall Street Journal wrote that investigators from the US Department of Justice have evidence to support criminal charges against Volkswagen Group for installing illegal software on 600,000 diesel vehicles sold in the US between 2009 and 2015. The illegal software circumvented emissions regulations. Those same sources for the WSJ say that prosecutors are torn between seeking a guilty plea from the company or negotiating a deferred prosecution agreement. The deferred prosecution agreement would dismiss charges against VW as long as the automaker signs an agreement to stick to certain settlement terms. Reuters confirmed the situation with two sources. Reuters reported earlier this summer that a consent decree between the US and VW Group could involve “an independent monitor overseeing the German automaker's conduct and significant yet-to-be determined fines for emissions violations.” WSJ sources say that Volkswagen is expected to receive some leniency for coming to a $15 billion civil settlement with prosecutors in June. In the settlement, VW offers to buy back affected diesel vehicles from owners at their worth before the emissions cheating scandal was made public. Still, those sources say additional fines for criminal charges could exceed the record $1.2 billion that Toyota was fined in 2014. Toyota was fined for failing to disclose acceleration issues with their cars to US authorities. If charges are brought against Volkswagen, those charges could involve misleading regulators and consumers. According to the WSJ’s sources, prosecutors have not decided which specific charges to bring against the company. The WSJ says that the DOJ could still bring charges against individual employees of VW Group as well, although many of them live in Germany and would need to be extradited. In July, attorneys general in Maryland, New York, and Massachusetts filed civil lawsuits naming two dozen VW Group employees as participants in the scheme to install illegal software on Volkswagen, Audi, and Porsche brand cars. The WSJ reports that a separate federal criminal probe involves “multiple individuals” from VW Group. According to Reuters’ sources, Volkswagen is completing its own internal investigation. That investigation, as well as the various civil suits launched against the company, has “slowed progress on reaching a settlement of the criminal investigation.” VW is also facing potential fines and legal costs pertaining to 85,000 3.0L diesel vehicles which were not covered in the $15 billion June civil settlement.