Daimler Summoned by German Government Over Diesel Emissions Daimler AG

Daimler Summoned by German Government Over Diesel Emissions

Daimler confirmed that several representatives from the automaker will attend a special hearing into the diesel scandal called by the German Transport Ministry one day after news broke about the scope of the probe by Stuttgart investigators.

The German government summoned Daimler AG executives to Berlin to explain the carmaker’s role in possible diesel-emissions cheating after two engines used in Mercedes-Benz vehicles drew increased scrutiny from prosecutors.

Daimler confirmed that several representatives from the automaker will attend a special hearing on July 13 into the diesel scandal called by the German Transport Ministry one day after news broke about the scope of the probe by Stuttgart investigators.

A person familiar with the investigation said on July 13 that the warrant authorizing searches at Daimler sites in May focused on two diesel engines allegedly equipped with so-called defeat devices that would reduce emissions controls.

The Mercedes GLK 250 and GL 350 sport-utility vehicles are among models at the carmaker that use the engines. The probe is looking into sales from 2008 to 2016, said the person, who asked not to be identified discussing an ongoing investigation.

The Stuttgart-based maker of Mercedes-Benz luxury cars is one of a number of auto manufacturers targeted in a technology scandal that’s enveloped the industry since Volkswagen AG revealed in September 2015 that it installed software to bypass pollution rules.

Hundreds of police officers and prosecutors participated in the searches at Daimler sites throughout Germany in May as part of a probe opened two months earlier.

“Daimler appears to have taken their interpretation of what’s technically allowed on emissions treatment too far,” said Juergen Pieper, an analyst at Bankhaus Metzler in Frankfurt. “The question now is if they’ve broken the rules on purpose or have been bending them too far.” He estimated that any upgrade required for the cars would cost about 500 million euros (US$572 million).

Shares Decline

Daimler shares dropped as much as 3% to 63.50 euros and traded 1% lower as of 3:27 p.m. in Frankfurt. The stock has declined 8.4% this year, valuing the automaker at 69.3 billion euros.

Investigators, who began looking into possible fraud and false advertising at Stuttgart-based Daimler in March, have identified two technicians at the manufacturer who are suspected of manipulating software that controls the engines’ exhaust, said the person. The warrant doesn’t specify the number of vehicles affected, the person said.

Jan Holzner, a spokesman at the Stuttgart prosecutors office, declined to comment on the warrant’s details, but said information about the document first published in Sueddeutsche Zeitung can’t be interpreted as the probe being widened. He confirmed that two people are being investigated. Prosecutors haven’t yet started to review the bulk of the material seized because Daimler has filed several court suits against the searches, meaning the documents remain sealed for now.

Sueddeutsche Zeitung reported that Daimler used the two engines in more than 1 million vehicles.

Daimler spokesman Joerg Howe reiterated on Thursday that the manufacturer is cooperating fully with the investigation. He declined to comment further.

By Karin Matussek and Elisabeth Behrmann

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