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Daimler Downplays Report on Rigged US Emission Test Software

Feb. 19, 2018
Documents reported on by Bild am Sonntag have “selectively been released in order to harm Daimler," the car manufacturer said.

Daimler AG sought to play down a newspaper report that its own engineers questioned the legality of software used to control diesel equipment in its vehicles, saying U.S. authorities knew about the allegations and haven’t taken action.

Documents reported on by Bild am Sonntag have “selectively been released in order to harm Daimler and its 290,000 employees,” Joerg Howe, a spokesman for the Stuttgart, Germany-based manufacturer, said Sunday in an emailed response to questions. “The authorities know about the documents and no complaint has been filed.”

The maker of Mercedes-Benz cars said it continues to cooperate fully with the U.S. Environmental Protection Agency and the California Air Resources Board, as well as a request by the U.S. Department of Justice to conduct an internal probe. Even so, the stock fell Monday, declining 2% to 71.05 euros as of 3:20 p.m. in Frankfurt, the worst performer on Germany’s DAX Index.

The Bild report cited emails from employees who flagged that a number of software functions potentially fall foul of U.S. emissions regulations. One was designed to help a tank of AdBlue fluid, which helps eliminate harmful exhaust gases, last for the entire period between a car’s servicing checkups. Another, called Slipguard, could recognize if a car was on a test stand and regulate the dosage of AdBlue, the newspaper reported.

Under a Cloud

Like other German carmakers, the manufacturer has been operating under a cloud as regulators in the U.S. and in its home country investigate allegations that the companies manipulated the settings on diesel-control equipment to cheat on emissions tests. While Volkswagen AG has admitted wrongdoing, Mercedes and BMW AG have denied trying to beat the system.

Daimler has acknowledged the risks associated with the two-year-long investigations and U.S. class action suits in its annual reports, including penalties, repairs and vehicle recalls. During 2017, the company raised provisions to cover potential obligations from sales transactions, warranties and legal proceedings by 2.1 billion euros (US$2.6 billion) to a total of 14 billion euros, it said last week.

U.S. regulators found that Volkswagen deliberately evaded testing regimes with a cheating software that recognized if a car was on a test stand. Criminal and civil proceedings, as well as recalls, have resulted in fines and repair costs of some $30 billion for Volkswagen, which rigged the emissions setups of 11 million vehicles globally, including some 600,000 in the U.S.

By Elisabeth Behrmann

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