Daimler to pay US$2.2 billion in diesel emissions cheating settlements

Daimler to pay US$2.2 billion in diesel emissions cheating settlements

(This September 14 story has been refiled to restore dropped words in lead)

File photo of Mercedes-Benz logo pictured before company's annual news conference in Stuttgart
The Mercedes-Benz logo is seen before the company's annual news conference in Stuttgart, Germany, February 4, 2016. REUTERS/Michaela Rehle

(This September 14 story has been refiled to restore dropped words in lead)

By David Shepardson

WASHINGTON: Daimler AG will pay US$2.2 billion to resolve a U.S. government diesel emissions cheating investigation and claims from 250,000 U.S. vehicle owners, court documents show.

The German automaker and its Mercedes-Benz USA LLC unit disclosed on Aug. 13 it had reached a settlement in principle resolving civil and environmental claims tied to 250,000 U.S. diesel cars and vans after the automaker used software to evade emissions rules.

Daimler said in August expected costs of settlements with U.S. authorities would total US$1.5 billion, settling with owners will cost another US$700 million and also disclosed "further expenses of a mid three-digit-million EUR (euro) amount to fulfill requirements of the settlements.

Deputy Attorney General Jeff Rosen said the settlements, which follow a nearly five-year investigation, will "serve to deter any others who may be tempted to violate our nation’s pollution laws in the future."

In court documents, Daimler agreed to pay 250,000 owners up to US$3,290 each to get polluting vehicles repaired and agreed not to oppose paying US$83.4 million in attorneys fees and expenses for the owners' lawyers. Owners will get US$800 less if a prior owner files a valid claim.

Daimler noted in court papers it denies the allegations "and does not admit any liability. The settlement does not include an external compliance monitor, it added. The German automaker still faces an ongoing criminal back investigation and could face additional U.S. financial penalties.

The settlements require Daimler to address the vehicles' excess emissions as part of binding consent decrees. Daimler will issue recalls and extended warranties but is not required to buy back vehicles unless it is unable to offer an emissions fix within a required timetable.

The Justice Department said Daimler failed to disclose at least 16 auxiliary emissions control devices, the government alleged, allowing "vehicles to perform in a variety of consumer-desirable ways, including allowing for fewer (diesel exhaust fluid) tank refills (and) better fuel mileage."

The settlement includes an US$875 million civil penalty levied under the Clean Air Act and US$546 million to fix the polluting vehicles and offset excess emissions, court papers show. Daimler will pay California US$285.6 million in total.

Diesel vehicles have come under scrutiny in the United States since Volkswagen AG admitted in September 2015 to installing secret software on 580,000 U.S. vehicles that allowed them to emit up to 40 times legally allowable emissions.

In September 2019, Daimler in Germany agreed to pay a fine of 870 million euros (US$1 billion) for breaking diesel emissions regulations.

Both Volkswagen and Daimler have halted sales of U.S. passenger diesel vehicles.

Fiat Chrysler Automobiles NV in 2019 reached a settlement worth about US$800 million to resolve claims by regulators and owners that it used illegal software that produced false results on diesel-emissions tests.

Fiat Chrysler said in July it was in talks to resolve an ongoing Justice Department criminal probe.

(Reporting by David Shepardson; Editing by Jonathan Oatis, Marguerita Choy and Lisa Shumaker)

Source: Reuters

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