Mercedes to spend billions to settle US diesel emissions cases

©Detroit Free Press

Mercedes-Benz and its parent company, Daimler, say they will pay more than $2 billion to settle diesel emissions cases in the United States.

The German automaker announced Thursday it has reached a deal with U.S. authorities and a separate agreement to settle U.S. class action litigation over its diesel emission scandal.

The tentative settlements are just the latest piece in the ongoing diesel emissions cheating saga involving automakers following the Volkswagen Dieselgate case. Other companies, including Fiat Chrysler Automobiles, Ford and General Motors, have also faced accusations, with FCA in talks with the Justice Department’s criminal division and U.S. Securities and Exchange Commission after reaching a significant civil settlement, which called for, among other things, the owners of about 100,000 2014-16 EcoDiesel Jeep Grand Cherokees and Ram 1500s to get payments of about $3,000 each. FCA was joined in that settlement by German supplier Bosch.

The accusations generally focus on the installation of so-called defeat devices, which allow vehicles to perform differently on emissions tests than during standard driving, meaning that they would pollute more on the road.

The Mercedes agreement would settle claims regarding emissions control systems involving about 250,000 diesel passenger cars and vans in the United States, according to a news release, which said the company “has cooperated fully” with U.S. authorities and continues to do so.

The release puts the price tag for the deal with U.S. authorities, which includes the U.S. Environmental Protection Agency, the California Air Resources Board and the Justice Department, among others, at $1.5 billion (1.27 billion euros), the class action at $700 million (592 million euros) and a “mid three-digit-million” euros amount to fulfill other settlement requirements. An EPA spokeswoman directed a Free Press reporter seeking comment to contact the Justice Department, which has not responded.

“Today, the Board of Management as well as the Supervisory Board of Daimler AG and Mercedes-Benz AG have approved the proposed settlements after weighing all aspects in the best interest of the company. With the proposed settlements, the company takes an important step towards legal certainty with respect to various diesel proceedings in the United States,” the release said.

The settlements must still be OK’d by the “relevant authorities and courts,” and the deal with U.S. authorities would be memorialized in binding consent decrees, the release said.

Daimler followed a familiar script in its approach to diesel cheating allegations. When the VW scandal came to light in 2015, “Daimler reacted to the revelations by insisting that nothing of the sort had happened with Daimler vehicles,” according to a Bloomberg report earlier this year.

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