Ger­man ve­hi­cle mak­ers take hit

Col­lu­sion claim de­flates 3 stocks

Northwest Arkansas Democrat-Gazette - - BUSINESS & FARM - DAVID MCHUGH

FRANK­FURT, Ger­many — Shares in the three big­gest Ger­man au­tomak­ers fell Mon­day af­ter a news­magazine re­port claimed they had col­luded for years over diesel en­gine tech­nol­ogy.

Shares of BMW fell 2.8 per­cent, Daim­ler 2.6 per­cent and Volk­swa­gen 2.5 per­cent. Shares also fell Fri­day af­ter

Der Spiegel pub­lished its find­ings on­line.

Spiegel re­ported that em­ploy­ees from Volk­swa­gen, Audi, BMW, Mercedes and Porsche had met of­ten since the 1990s and had agreed to limit the size of the tanks hold­ing a urea so­lu­tion used to re­duce diesel emis­sions of harm­ful ni­tro­gen ox­ide. The smaller tanks re­duced costs and freed up space in the ve­hi­cles, the mag­a­zine said.

BMW is­sued a state­ment deny­ing that its urea tanks were too small to pro­vide ad­e­quate ex­haust treat­ment and said its ve­hi­cles’ emis­sions met le­gal re­quire­ments.

Euro­pean Union of­fi­cials said in a state­ment that they and the Ger­man com­pe­ti­tion au­thor­ity have re­ceived in­for­ma­tion on the mat­ter, which is cur­rently be­ing as­sessed.

The Spiegel re­port fol­lows an­nounce­ments last week by Daim­ler that it is re­call­ing 3 mil­lion Mercedes-Benz

diesels to im­prove their emis­sions per­for­mance through an up­date of en­gine con­trol soft­ware, and by Volk­swa­gen’s lux­ury Audi brand that it was do­ing the same with 850,000 ve­hi­cles. Daim­ler also said it would speed up the de­ploy­ment of new en­gines. BMW is of­fer­ing soft­ware up­dates on 350,000 of its older diesels.

The steps come as a way to head off calls for ban­ning diesel ve­hi­cles from some Ger­man cities where air pol­lu­tion lev­els ex­ceed lim­its. The Ger­man govern­ment has sum­moned lo­cal of­fi­cials and auto ex­ec­u­tives to a “diesel sum­mit” Aug. 2 to both find ways to re­duce emis­sions and en­sure that diesel tech­nol­ogy has a fu­ture.

The auto in­dus­try is a ma­jor em­ployer, and diesels are also con­sid­ered one way to meet­ing goals for lower emis­sions of green­house gases blamed for global warm­ing. Diesels emit less car­bon diox­ide, a ma­jor green­house gas, but emit more ni­tro­gen ox­ide, an un­healthy pol­lu­tant.

Diesels came un­der in­creased scru­tiny af­ter Volk­swa­gen ad­mit­ted to us­ing il­le­gal soft­ware that in the U.S. de­tected when ve­hi­cles were

on test stands and turned emis­sion con­trols on so that the cars passed the emis­sions test. The con­trols were turned off in ev­ery­day driv­ing, im­prov­ing mileage and per­for­mance. Volk­swa­gen has agreed to more than $20 bil­lion in U.S. civil and crim­i­nal fines and set­tle­ments, and eight ex­ec­u­tives have been charged.

Separately, five Ger­man au­tomak­ers — Daim­ler’s Mercedes-Benz, Opel and Volk­swa­gen and its sub­sidiaries Audi and Porsche — last year agreed to re­call a to­tal of 630,000 diesel ve­hi­cles in Europe af­ter it was found that emis­sions of­ten ex­ceeded EU stan­dards. In those cases, en­gine con­trol soft­ware turned off emis­sion con­trols at cer­tain tem­per­a­tures to avoid en­gine dam­age. That was le­gal but Ger­man reg­u­la­tors have ques­tioned whether the use of the ex­emp­tion was al­ways jus­ti­fied.

AP/MATTHIAS SCHRADER

The four ring logo of Ger­man au­tomaker Audi is shown at its head­quar­ters af­ter its an­nual news con­fer­ence in In­gol­stadt, Ger­many, in March.

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