Daimler downplays report on rigged US emission-test software

By BLOOMBERG

MUNICH • 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 US 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 last 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 US Environmental Protection Agency and the California Air Resources Board, as well as a request by the US Department of Justice to conduct an internal probe.

Even so, the stock fell on Monday, declining 2% to €71.05 (RM342.46) as of 3:20pm 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 US 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 recognise if a car was on a test stand and regulate the dosage of AdBlue, the newspaper reported.

Like other German carmakers, the manufacturer has been operating under a cloud, as regulators in the US and in its home country investigate allegations that the companies manipulated the settings on dieselcontrol 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-yearlong investigations and US 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 to a total of €14 billion, it said last week.

US regulators found that Volkswagen deliberately evaded testing regimes with a cheating software that recognised 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 US$30 billion (RM117 billion) for Volkswagen, which rigged the emissions setups of 11 million vehicles globally, including some 600,000 in the US.