Sun Sentinel Palm Beach Edition

VW takes $18.2B hit for emissions cheating

Five other brands issue auto recalls

- By David McHugh and Frank Jordans

WOLFSBURG, Germany — German carmaker Volkswagen capped two grim days for the country’s auto industry by revealing its diesel emissions cheating cost it $18.2 billion for 2015 alone — and that’s likely only a part of the total bill.

The revelation in September from U.S. environmen­tal authoritie­s that the company had been cheating on emissions tests rocked one of the most venerable brand names in the auto industry and cost it its chief executive as well as a host of goodwill.

It’s also raised questions over the practices of others.

German government officials on Friday said five German brands, including Volkswagen, would conduct a voluntary recall over emissions issues, a day after Mercedes-Benz owner Daimler said it was conducting an internal investigat­ion into its emissions certificat­ions at the request of U.S. authoritie­s.

The Volkswagen announceme­nt follows agreement in a U.S. federal court in San Francisco on the outlines of a deal with U.S. environmen­tal authoritie­s.

Under the terms of the proposed deal, Volkswagen would offer to buy back almost 500,000 cars sold in the U.S. equipped with software that disabled emissions controls when the car was not being tested. Some 11 million cars worldwide are affected.

The company had delayed its earnings announceme­nt until it could get a better estimate of the costs involved. Now that it has revealed the cost of the scandal, Volkswagen said Friday that it is to post a massive net loss of $6.2 billion for last year.

The writedown of $18.2 billion is more than double the $7.5 billion the company had previously estimated. Analysts at Warburg Research think direct cost of recalls, settlement­s and other outlays worldwide will end up reaching $32.1 billion for fines — and that’s excluding any impact on sales and market share.

Volkswagen also said it’s not in a position to release the results of an internal probe into the scandal this month as expected.

The company now says the probe conducted by U.S. law firm Jones Day could be completed by year-end but that early release of partial results would interfere with settlement negotiatio­ns in the U.S. and could interfere with cooperatio­n with U.S. law enforcemen­t.

Separately, Italian automaker FIAT is being investigat­ed following a tip from parts supplier Bosch about possible emissions irregulari­ties, Alexander Dobrindt, transport minister of Germany, said.

 ?? JULIAN STRATENSCH­ULTE/AFP ?? Volkswagen CEO Matthias Mueller says his company remains “fundamenta­lly healthy,” and he is “convinced that Volkswagen has what it takes to overcome its challenges.”
JULIAN STRATENSCH­ULTE/AFP Volkswagen CEO Matthias Mueller says his company remains “fundamenta­lly healthy,” and he is “convinced that Volkswagen has what it takes to overcome its challenges.”

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