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Owatonna / January 11, 2017 An explosion injured at least six workers, some seriously, and shut down production Wednesday at the McNeilus Truck and Manufacturing plant in Dodge Center. According to Dodge County Sheriff Scott Rose, the blast occurred in the plant’s final paint building and was first reported to 911 at 10:32 a.m. “Law enforcement, medical and fire responded, and determined the explosion took place in the paint booth of that building,” Rose said. “At this point, the origin of the blast is unknown. We have the gas company on the scene as well as the fire marshal and investigators from the Dodge County Sheriff’s Office.” Two workers with reported severe burns were airlifted by Mayo One and Mayo Three to Regions Hospital in St. Paul, and two more workers who were hit by objects were transported by ambulance to Mayo Clinic Hospital, St. Mary’s Campus, with unspecified serious but non-life-threatening injuries, Rose said. Two more workers were treated for minor medical needs on-site. “All employees are accounted for. They did a head count right away to make sure they have everyone accounted for in the building,” said Rose, who added family of all the injured workers had been notified as of 1 p.m. The blast apparently was powerful enough to damage doors at both ends of the long, thin paint building, and Rose said the four seriously injured workers are believed to be the only ones in the building at the time, with the burn victims working next to the paint booth where the blast occurred. Still, it was a stroke of luck that so few workers were on hand, he said. “It sounds like the majority of the employees that would have been in that area were gone for training, so I think we’re fortunate that we didn’t have more injuries because of this incident,” Rose said. After the blast, the plant was closed down for the remainder of the day, and police temporarily shut down Highway Street E and other nearby roads except for employees leaving the area. Rose said McNeilus would have further information by Thursday. No information was available from the company Wednesday afternoon. He said there have been no past police calls for safety concerns at the plant, and that his office has a good working relationship with the company. At his press conference, Rose praised the many fire, ambulance and police agencies that responded as well as McNeilus officials for their response to the explosion. “We’re a small community, and this is not the type of incident that we normally would deal with here,” he said. “Between working with the MTM officials and their safety people, and then all the law enforcement, fire and medical that responded, as well as the [Department of Transportation], everybody did a great job handling this event.” McNeilus Truck and Manufacturing (https://www.mcneiluscompanies.com/) is owned by Oshkosh Corporation and produces concrete mixer and garbage truck bodies. It is one of the major employers in Dodge Center. In addition to the Dodge County Sheriff’s Office and Mayo helicopters, agencies responding to the explosion include Dodge Center, Kasson and West Concord Fire Departments; Dodge Center, Hayfield, West Concord and Gold Cross Ambulance Services; and Kasson Police, Olmsted County Sheriff’s Office and Minnesota State Patrol. .

The generous U.S. taxpayer is giving Israel US$38 billion in military aid over the next ten years, even though the federal deficit is in excess of US$500 billion ($587 billion in FY2016). It's not like we could use that money to revitalize our infrastructure here in the United States. https://www.whitehouse.gov/the-press-office/2016/09/14/fact-sheet-memorandum-understanding-reached-israel

Defense News / January 11, 2017 Israel’s Ministry of Defense announced Wednesday it will acquire 200 FMTV tactical trucks from Oshkosh Defense in a contract valued at $200 million. The order, concluded in recent days between the Ministry’s New York purchasing mission and the Oshkosh, Wisconsin-based firm, follows months of field testing on an initial six trucks to ensure the firm’s Family of Medium Tactical Vehicles (FMTV) meets Israeli requirements. In its Jan. 11 announcement, the Ministry noted that the $200 million contract likely will be followed by additional orders as the Israel Defense Force’s Technology and Logistics branch moves to replace its nearly 60-year-old tactical truck force. “We’re talking about an initial deal, after which the defense establishment is expected to decide to acquire hundreds more trucks until our entire antiquated fleet is replaced,” MoD noted in its statement. Itzik Levy, deputy head of purchasing for ground systems, said deliveries will begin in the current year, with the 200th truck expected to arrive by mid-2018. The deal, which will be paid for with United States Foreign Military Financing (FMF) grant aid, will include logistics and maintenance services in Israel, according to the ministry. .

Commercial Motor TV - sponsored by DAF Trucks / January 12, 2017 .

Renault Trucks Press Release / January 12, 2017 A team of Renault Trucks engineers and designers is working on an additive manufacturing process – metal 3D printing – that is set to boost the performance of engines. Technology of the future is fast becoming a reality, as can be seen from the complex parts that have already been successfully tested inside a Euro 6 engine. The Renault Trucks Lyon Powertrain Engineering department has focused on using metal additive manufacturing as a future engine manufacturing process. A prototype DTI 5 4- cylinder Euro 6 step C engine has been designed exclusively using 3D printing. Although the complete engine was already designed virtually, rocker arms and camshaft bearing caps were manufactured by metal 3D printing and successfully bench-tested for 600 hours inside a Euro 6 engine. "The aim of this project is to demonstrate the positive impact of metal additive manufacturing on the size and weight of an engine. This process has enabled us to reduce the weight of a 4-cylinder engine by 120 kg or 25%", explained Damien Lemasson, project manager at Renault Trucks. "The tests we have carried out prove the durability of engine components made using 3D printing. It's not just cosmetic." Metal additive manufacturing opens up new development opportunities for thermal engines. This printing process, which works by adding materials layer after layer, can be used to create complex organic forms, as well as optimizing the sizing of parts and reducing the number of assembly operations and therefore the number of components in an engine. "Additive manufacturing releases us from constraints and unlocks the creativity of engineers. This procedure is a source of disruptive technology for the engines of tomorrow, which will be lighter and more functional, thereby offering optimal performance," Damien Lemasson added. The number of components in the DTI 5 engine has been reduced by 25%, making a total of 200 fewer parts. For haulage companies, metal 3D printing carries a number of advantages. They will be able to optimize the overall operating costs of their fleet of vehicles, as a reduction in engine volume will lead to greater payloads and lower fuel consumption. In the short-term, this manufacturing procedure can be used for highly specific applications or small runs. Following on from these successful initial tests, engineers at Renault Trucks will be continuing their work on this manufacturing process to further increase the performance and functionality of truck components. Picture captions: Pictures 01 and 02 : On the left,the starting point, the Renault Trucks DTI5 Euro 6 engine, 841 parts. On the right, the same engine exclusively designed using 3D metal printing to reduce weight ans number of components. Picture 03 : On top, a Renault Trucks Euro 6 DTI5 rocker arm ; above, a rocker arm manufactured by 3D printing on a bench test inside a Euro 6 engine. .

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Now, Volvo headquarters moves its headquarters Göteborgs-Posten / January 12, 2017 Volvo Construction Equipment announced today that it is moving its global headquarters from Brussels, Belgium to Gothenburg, Sweden. Volvo said it desires to have a better interaction with the rest of the group, and be able to use the skills and resources available in Gothenburg. “It allows us an opportunity to be physically closer to the Volvo business and will facilitate closer cooperation and exchange of expertise”, says Martin Weiss Burg, Volvo CE president and Volvo Group board member. Volvo CE currently has 4,000 employees in Sweden, and has plants in Eskilstuna, Arvika, Hallsberg and Braås. The new headquarters will be operational in the third quarter of 2017.

Volvo CE to move the headquarters to Gothenburg Dagens Industri / January 12, 2017 Volvo's business in construction equipment, Volvo CE, moves this year its headquarters from Brussels to Gothenburg. The move will enable closer cooperation with the Group's other business areas, according to a press release. Volvo CE’s headquarters should be fully relocated to Gothenburg during the third quarter of this year. Volvo's second largest shareholder, Swedish hedge fund manager Christer Gardell (the Carl Icahn of Europe) who owns Cevian Capital, told Bloomberg News last October that Volvo Group should focus on trucks and dispose of Volvo CE.

Volvo Group Press Release / January 12, 2017 Volvo Construction Equipment [aka.Volvo CE or VCE] has today announced that the company’s global headquarters will move from its current location in Brussels, Belgium to Gothenburg, Sweden. The relocation will facilitate closer cooperation with the Group’s other business areas and allow for better usage of competence and resources of the whole Group. “Our Brussels location has served us well since the office opened in the 1980s and this move comes at the right time for Volvo CE as we continue to adapt our Company to changing global business dynamics. It allows us to be physically closer to the other Volvo business areas and it will facilitate closer cooperation and sharing of best practices,” states Martin Weissburg, President of Volvo CE and Member of the Executive Board of the Volvo Group. “Sweden is also home to approximately 4 000 Volvo CE employees and where some of our largest manufacturing, commercial and technology sites are located,” adds Weissburg. The Volvo CE headquarters will be operational in Gothenburg in the third quarter of 2017 .

Dakar 2017: Trucks drive straight to bivouac as Stage 9 is cancelled Iveco Trucks Press Release / January 12, 2017 The world’s toughest Rally Raid is suffering from the harsh Summer weather on the South American mountains. The organisation is forced to cancel at least part of a stage in most Dakar Rallies, but in this year’s edition, 1,395 kilometres have been already lost, and all of them in just five of the nine stages. An avalanche on Route 9, in the liaison section for the Caravan race in the province of Jujuy, has blocked the road so that vehicles and assistance could not make it to the bivouac in Salta. The Dakar organisation did not have any choice and cancelled the special, so that drivers and teams are making their way safely to the camp in Chilecito. With only 57% of the race run, Gerard de Rooy’s IVECO Powerstar remains in contention for the lead and is in third place on the podium, just 2m20s behind leader Dmitry Sotnikov. This gap can change dramatically in only one special, so Dakar’s last winner is confident he can repeat his win this year. “I am third, two minutes behind. That’s hardly any time at all,” stated Gerard de Rooy after finishing yesterday’s shortened stage. Ton van Genugten’s and Wuf van Ginkel’s IVECO Trakkers are fighting hard to move up into the Top 20, after losing more than six hours for having been stuck in mud a couple of stages ago. They have the perfect truck to reach their goal before the finish in Buenos Aires. Meanwhile, Federico Villagra with a second IVECO Powerstar, remains among the Dakar’s best five drivers, but he still aims to win a stage and finish in the best possible position. If the organisation follows its normal course, Stage 10 will link Chilecito and San Juan. Overall Classification – Dakar 2017 1. Dmitry Sotnikov (Kamaz) 17h52m20s 2. Eduard Nikolaev (Kamaz) +1m46s 3. Gerard de Rooy (IVECO) +2m20s 4. Federico Villagra (IVECO) +29m06s 5. Pascal de Baar (Renault) +45m34s ----------- 21. Ton van Genugten (IVECO) +6h04m25s 23. Wuf van Ginkel (IVECO) + 7h18m17s . .

Dakar 2017: Gerard de Rooy keeps fighting for the lead Iveco Trucks Press Release / January 11, 2017 Bad weather conditions are having a negative effect in 2017 Dakar Rally. For the third day of racing in a row, the organisation is forced to cancel part of a stage. The Truck category was the most affected, with its race finished after the first control point. As a consequence of the heavy rain, Route 9 in Jujuy was blocked by an avalanche and the caravan had to stop on its way to the biouvac in Salta. Ton van Genugten was the man of the day for the PETRONAS De Rooy IVECO Team, as he finished just 3m49s behind Martin van der Brink, winner of the stage. The Dutchman in the #507 Trakker is maintaining a good pace in the toughest roads of South America, but regrets the six hours lost in the mud a couple of specials behind, which is keeping him far away from the leaders in the overall classification. Gerard de Rooy suffered another puncture and lost the first place in the general. Yesterday’s setback was not big: he arrived only seven minutes behind the leader, falling back to the third place with his #500 Powerstar, so that he is only 2m20s away from the lead. Wuf van Ginkel finished very close to the Top 10, 10m42s behind the best time of Stage 8. The #525 Trakker is looking to move up in the overall standings to enter the Top 20 of the race. Federico Villagra placed the best IVECO truck of the day in second place after battling head to head with Martin van der Brink, who beat him by 17 seconds. The Argentine driver takes advantage of Mardeev’s delay to advance to fourth place overall. The organisation will try to solve the complications with the avalanche that blocked the caravan in Route 9 to keep moving along on the path to Buenos Aires. In first instance, 406 kilometres are programmed for the ‘Super Belén’ between Salta and Chilecito. Stage 8 Results – Dakar 2017 1. Martin van der Brink (Renault) 1h55m20s 2. Federico Villagra (IVECO) +17s 3. Eduard Nikolaev (Kamaz) +42s 4. Dmitry Sotnikov (Kamaz) +2m42s 5. Ton van Genugten (IVECO) +3m49s ----------- 9. Gerard de Rooy (IVECO) +7m13s 11. Wuf van Ginkel (IVECO) + 10m42s Overall Classification – Dakar 2017 1. Dmitry Sotnikov (Kamaz) 17h52m20s 2. Eduard Nikolaev (Kamaz) +1m46s 3. Gerard de Rooy (IVECO) +2m20s 4. Federico Villagra (IVECO) +29m06s 5. Pascal de Baar (Renault) +45m34s ----------- 21. Ton van Genugten (IVECO) +6h04m25s 23. Wuf van Ginkel (IVECO) + 7h18m17s .

Detroit Diesel Corp. Press Release / January 11, 2017 .

Detroit Diesel Corp. Press Release / January 11, 2017 .

On the Russia issue, i.e. lobbying..............Tillerson's response is unbelievable.

Some feel, the current and oncoming regulations are escalating by design to force the extinction of the internal combustion engine by a planned date. Likewise, all the major country governments are head-over-heels pushing for autonomous driving ASAP, even though the population is NOT asking for it. No government has asked its people if they want to be removed from driving. Autonomous driving is being rammed down everyone's throat.

Volvo braking-related recall affects more than 6,000 trucks Commercial Carrier Journal (CCJ) / January 12, 2017 Volvo Trucks North America (VTNA) is recalling more than 6,000 trucks because the electric air dryers on certain models are not set to the correct specifications, according to the National Highway Traffic Safety Administration (NHTSA). The company says the parameters for the dryers were set too low, at one-third of the required volume, which can cause oil and water to contaminate the brake system and affect brake performance in cold weather. In total, Volvo is recalling 6,271 trucks manufactured between April 11, 2012, and Sept. 30, 2016. Affected models include certain 2013-2017 VNL, VNM and VNX trucks. Volvo says the repair will involve reprogramming the trucks’ vehicle control modules with the correct parameters and replacing the air dryer filters. Dealers were alerted of the recall on Dec. 22, and truck owners bill be notified by Feb. 17.

Chao Pitches Private Infrastructure Investment in Confirmation Hearing Heavy Duty Trucking / January 11, 2017 During her Senate confirmation hearing on Jan. 11, Elaine Chao unequivocally signaled her willingness to cooperate with Congress to enact the trillion-dollar infrastructure investment plan floated by President-elect Trump if she is indeed confirmed as the next secretary of transportation. In her written testimony and in reply to questions posed by Senators from both sides of the aisle, Secretary Chao advocated strongly for “unleashing the potential for private investment in our nation’s infrastructure.” Chao also affirmed that safety would remain DOT’s “primary objective” on her watch and asserted that, in her view, regularity decisions should be “based on sound science with solid underlying data.” From start to finish of her three-and-a-half hour appearance before the Senate Commerce Committee, Chao was poised and certain in her remarks, as might be expected from someone who has already held Cabinet rank. Chao served as secretary of labor throughout both terms of President George W. Bush; she received her first major executive appointment as deputy secretary of transportation under President George H.W. Bush. Members from both side of the aisle on the committee, which is known for its bipartisan bonhomie, lobbed little more than softballs at Chao and were largely satisfied with her oft-repeated response to one concern or another that she would “look forward to working with you on that if I am confirmed as secretary.” Early in the hearing, Chao said she would form a task force to implement the “Trump vision for infrastructure.” She had no details to share on the Trump infrastructure plan. However, Chao stressed that she would seek to have DOT work with Congress to “develop the details” of that still nebulous plan. More significantly, Chao emphasized the “significant difference between traditional program funding and other innovative financing tools, such as public-private partnerships.” Chao said getting private capital flowing into infrastructure projects will require “incentivizing” equity firms, pension funds, and endowments to invest in “a bold new vision” for building highways and other infrastructure. She spoke of creating “a mix of practical solutions—both public and private-- that provide the greatest cost-benefit to the public. It’s also important to recognize that the way we build and deliver projects is as important as how much we invest. We want to seek your advice in identifying and addressing unnecessary bottlenecks" that affect transportation projects. Referring to DOT’s primary goal of ensuring safe transportation, Chao said that necessary regulations needed to be “derived from sound science and data with risk-based analysis that prevents accidents before they happen” and that weighs both costs and benefits. Chao also commented on emerging transportation technologies. She applauded the private sector for driving such innovative developments as drones and both autonomous cars and trucks. She said DOT should work with Congress “to position the federal government as a catalyst for safe, efficient technologies, not as an impediment.” Summing up, Chao said she sees DOT as being responsible for “modernizing our transportation systems, strengthening our country’s competitiveness, and improving our quality of life.” “To my colleagues, I would say that, if you were to imagine an ideal candidate to tackle these challenges, it would be hard to come up with a more qualified nominee than the one before us,” said Committee Chairman John Thune (R-SD) in his opening remarks at Chao’s hearing.

Fleet Owner / January 12, 2017 Well connected nominee breezes through confirmation hearing Trucking didn’t get much of a preview of industry-specific priorities for the Trump administration but, if the Senate confirmation hearing for the Transportation Secretary nominee is any indication, whatever the incoming occupant of the White House wants in terms of planes, trains, and automobiles will be capably delivered to Congress by a smooth and well regarded insider. Indeed, space transportation—and even the relayed well-wishes from Chao’s “dear friends,” several senators’ wives—got more floor time than trucking issues in the Commerce Committee’s three-hour chummy chat with nominee Elaine Chao on Wednesday. That the hearing provided a platform for committee members to roll out their own transportation wish-lists rather than to challenge Chao’s credentials and President-elect Trump’s plans comes as no surprise: Chao led the Labor Department under George W. Bush and she has held other high-level political appointments. And she’s married to Senate Majority Leader Mitch McConnell (R.-KY), who introduced Chao at the hearing. In short, she’s the “ideal candidate” to lead the DOT, as Commerce Chairman John Thune said to open the hearing. For her part, Chao outlined broad goals but offered few details of how DOT under her leadership would achieve them. “The U.S. Department of Transportation has a rare opportunity to shape the transformation of our critical infrastructure,” she said in her opening statement. “First and foremost, safety will continue to be the primary objective.” Chao emphasized that infrastructure is the “underpinning” of the U.S. economy—yet the nation’s prosperity is jeopardized by “infrastructure in need of repair, the specter of rising highway fatalities, growing congestion, and by a failure to keep pace with emerging technologies.” Regarding Trump’s promised trillion-dollar construction program, Chao spoke several times of the need to “unleash the potential for private investment” and to supplement direct federal funding with “innovative financing tools” such as public-private partnerships. She assured the committee that she would keep Congress informed on the administration’s infrastructure plans through “continual and constant dialog,” and that such an ambitious program would be a “heavy lift” requiring bipartisan cooperation with the White House. As for regulations, federal rules “should be rooted in analysis derived from sound science and data, with risk-based analysis that prevents accidents before they happen, and considers both the costs and the benefits of new rulemakings.” For trucking specifically, Sen. Deb Fischer pointed to the FAST Act reforms of the Federal Motor Carrier Safety Administration—designed to make the regulatory process “more transparent, responsive, and open to input from stakeholders—and questioned Chao on “the best way” to keep passengers and freight moving across the transportation system, and to prevent DOT regulations from becoming “a burden.” “The great challenge for all regulators is to balance the ultimate goal of safety, but also to make sure the regulations are based on sound science and true data, and that the underlying analysis is solid,” Chao said. Fischer added that she looked forward to working with Chao to find solutions to problems such as the truck driver shortage. With regard to the Trump administration’s position on greenhouse gas regulations, such as the recent Phase 2 regulation of heavy-duty truck emissions, Chao said she was “not very familiar” with current DOT vehicle emissions initiatives and climate change issues. Not discussed in the hearing, but featured in her questionnaire for nominees, Chao emphasized the “first step” importance of identifying and hiring “the best people possible” for the positions that will be open in incoming administration. With the transition, several top leadership roles at FMCSA are now open and awaiting political appointees. According to the Plum Book, a directory of administration positions, those top jobs include Administrator, Chief Counsel , Director of Communications, and Director of Congressional Affairs. FMCSA Spokesman Duane DeBruyne confirmed for Fleet Owner that Deputy Administrator Daphne Jefferson, who serves as the Agency’s senior-ranking career employee—and absent of any temporary executive staffing appointment by the new administration—would automatically assume the both the duties and the full responsibilities of the FMCSA Administrator. “There is a clear and well established protocol for ensuring a seamless continuity of operations during a change in executive leadership,” said DeBruyne, who has served under four of FMCSA’s five Senate-confirmed administrators since the agency’s establishment in 2000. “Come Monday morning, Jan. 23, 2017, everyone in headquarters and in our service centers and in our field offices will be back at work – focused on truck and bus safety, reducing injuries and saving lives.”

Transport Topics / January 12, 2017 Volvo Trucks North America (VTNA) is recalling 6,127 of its model year 2013-2017 VNL and VNM trucks and model year 2017 VNX trucks with faulty software to prevent possible contamination of the brake system. The vehicles have incorrect software for controlling the electronic air dryer and that may result in oil and water contaminating the brake system, VTNA said. The recall is expected to begin Feb. 17, and VTNA will notify owners, and dealers will reprogram the vehicle control module and replace the air dryer filter, free of charge, the truck maker said. Owners may contact Volvo customer service at 800-528-6586. Volvo's number for this recall is RVXX1608. Volvo Trucks North America is a unit of Sweden-based Volvo Group.

On his first day in office, Trump should move to prohibit all Volkswagen car sales in the United States, until such time Germany turns over these five criminals. Done deal.

VW Managers Safe From Extradition, as Long as They Stay Home Bloomberg / January 12, 2017 Five German Volkswagen AG executives facing U.S. charges linked to the diesel-emissions scandal may be able to avoid jail, but they may never be able to travel beyond the Black Forest again. While Germany doesn’t extradite its citizens to countries outside the European Union, the U.S. can seek an international arrest warrant that would be executed if any of the men left the country. That’s the dilemma now facing Heinz-Jakob Neusser, Richard Dorenkamp, Bernd Gottweis and two others, who were charged Wednesday in a court in Michigan. "You always advise clients who are facing probes abroad not to leave German territory," said Heiko Lesch, a defense attorney in Bonn. “That’s true for any investigation in a foreign country regardless which one, at least when we’re talking about serious offenses.” At the same time Volkswagen agreed on Wednesday to plead guilty to an emissions-cheating scandal and to pay $4.3 billion, U.S. prosecutors announced charges against the five individuals in Germany, bringing the total number of company officials indicted to seven. Lawyer Warnings In the months leading up to this week’s corporate settlement and indictment against individuals, German lawyers had begun to warn VW executives not to leave Germany as fears of impending U.S. charges grew. The one executive who ignored the advice is now in a U.S. jail. Oliver Schmidt, the company’s liaison with U.S. regulators, was arrested at the Miami airport Saturday as he prepared to fly home from a poorly timed vacation. U.S. investigators had filed a criminal complaint against him on Dec. 30 at a U.S. District Court in Michigan. Called a flight risk by prosecutors, a U.S. judge has ordered Schmidt be held without bail pending trial. Neusser, VW’s engine development chief, Dorenkamp, who led the failed effort to design a diesel engine that would meet the tougher emissions standards the U.S. adopted for 2007, and Gottweis, who was responsible for quality management, were all charged with participating in a scheme to mislead regulators about how the company cheated on emissions tests. Jens Hadler, who led engine development from 2007 to 2011, and Juergen Peter, who worked on Gottweis’s group, were also indicted. U.S. prosecutors know from experience that the five other men will be able to evade capture as long as they stay in Germany. In a previous German scandal, U.S. officials in 2011 charged eight Siemens AG officials and agents in relation to a bribery scheme. None of the accused in the Siemens case appeared in court for four years, when one former executive traveled to New York to plead guilty. As part of a plea agreement, he agreed to provide information and testify against the others.

Note that, for political reasons (American-German relations), the two people at the core of Volkswagen's criminal act are not mentioned or charged by the DoJ, that being Ferdinand Piech and Martin Winterkorn.

Volkswagen AG Agrees to Plead Guilty and Pay $4.3 Billion in Criminal and Civil Penalties; Six Volkswagen Executives and Employees are Indicted in Connection with Conspiracy to Cheat U.S. Emissions Tests The United States Department of Justice / January 11, 2017 VW to Pay $2.8 Billion Criminal Fine in Guilty Plea and $1.5 Billion Settlement of Civil Environmental, Customs and Financial Violations; Monitor to Be Appointed to Oversee the Parent Company Volkswagen AG (VW) has agreed to plead guilty to three criminal felony counts and pay a $2.8 billion criminal penalty as a result of the company’s long-running scheme to sell approximately 590,000 diesel vehicles in the U.S. by using a defeat device to cheat on emissions tests mandated by the Environmental Protection Agency (EPA) and the California Air Resources Board (CARB), and lying and obstructing justice to further the scheme, the Justice Department announced today. In separate civil resolutions of environmental, customs and financial claims, VW has agreed to pay $1.5 billion. This includes EPA’s claim for civil penalties against VW in connection with VW’s importation and sale of these cars, as well as U.S. Customs and Border Protection (CBP) claims for customs fraud. In addition, the EPA agreement requires injunctive relief to prevent future violations. The agreements also resolve alleged violations of the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA). The Criminal Case: VW is charged with and has agreed to plead guilty to participating in a conspiracy to defraud the United States and VW’s U.S. customers and to violate the Clean Air Act by lying and misleading the EPA and U.S. customers about whether certain VW, Audi and Porsche branded diesel vehicles complied with U.S. emissions standards, using cheating software to circumvent the U.S. testing process and concealing material facts about its cheating from U.S. regulators. VW is also charged with obstruction of justice for destroying documents related to the scheme, and with a separate crime of importing these cars into the U.S. by means of false statements about the vehicles’ compliance with emissions limits. Under the terms of the plea agreement, which must be accepted by the court, VW will plead guilty to all these crimes, will be on probation for three years, will be under an independent corporate compliance monitor who will oversee the company for at least three years, and agrees to fully cooperate in the Justice Department’s ongoing investigation and prosecution of individuals responsible for these crimes. In addition, a federal grand jury in the Eastern District of Michigan returned an indictment today charging six VW executives and employees for their roles in the nearly 10-year conspiracy. Heinz-Jakob Neusser, 56; Jens Hadler, 50; Richard Dorenkamp, 68; Bernd Gottweis, 69; Oliver Schmidt, 48; and Jürgen Peter, 59, all of Germany, are charged with one count of conspiracy to defraud the United States, defraud VW’s U.S. customers and violate the Clean Air Act by making false representations to regulators and the public about the ability of VW’s supposedly “clean diesel” vehicles to comply with U.S. emissions requirements. The indictment also charges Dorenkamp, Neusser, Schmidt and Peter with Clean Air Act violations and charges Neusser, Gottweis, Schmidt and Peter with wire fraud counts. This case has been assigned to U.S. District Judge Sean F. Cox of the Eastern District of Michigan. Schmidt was arrested on Jan. 7, 2017, in Miami during a visit to the United States and appeared in federal court there on Monday. The other defendants are believed to presently reside in Germany. Today’s announcement was made by Attorney General Loretta E. Lynch, EPA Administrator Gina McCarthy and Assistant Administrator Cynthia Giles, Deputy Attorney General Sally Q. Yates, FBI Deputy Director Andrew McCabe, Acting Deputy Secretary Russell C. Deyo for the Department of Homeland Security, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Assistant Attorney General John C. Cruden of the Justice Department’s Environment and Natural Resources Division and Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division. “Volkswagen’s attempts to dodge emissions standards and import falsely certified vehicles into the country represent an egregious violation of our nation’s environmental, consumer protection and financial laws,” said Attorney General Lynch. “Today’s actions reflect the Justice Department’s steadfast commitment to defending consumers, protecting our environment and our financial system and holding individuals and companies accountable for corporate wrongdoing. In the days ahead, we will continue to examine Volkswagen’s attempts to mislead consumers and deceive the government. And we will continue to pursue the individuals responsible for orchestrating this damaging conspiracy.” “When Volkswagen broke the law, EPA stepped in to hold them accountable and address the pollution they caused,” said EPA Administrator McCarthy. “EPA’s fundamental and indispensable role becomes all too clear when companies evade laws that protect our health. The American public depends on a strong and active EPA to deliver clean air protections, and that is exactly what we have done.” “This wasn’t simply the action of some faceless, multinational corporation,” said Deputy Attorney General Yates. “This conspiracy involved flesh-and-blood individuals who used their positions within Volkswagen to deceive both regulators and consumers. From the start of this investigation, we’ve been committed to ensuring that those responsible for criminal activity are held accountable. We’ve followed the evidence—from the showroom to the boardroom—and it brought us to the people whose indictments we’re announcing today.” “Americans expect corporations to operate honestly and provide accurate information,” said Deputy Director McCabe. “Volkswagen’s data deception defrauded the U.S. government, violated the Clean Air Act and eroded consumer trust. This case sends a clear message to corporations, no matter how big or small, that if you lie and disregard rules that protect consumers and the environment, you will be caught and held accountable.” “Blatant violations of U.S. customs and environmental laws will not be tolerated, and this case reinforces that,” said Acting Deputy Secretary Deyo. “These actions put our economy, consumers and citizens at risk, and the Department of Homeland Security and U.S. Customs and Border Protection will continue to take every step necessary to protect the American people.” According to the indictment, the individuals occupied the following positions within the company: Heinz-Jakob Neusser: from July 2013 until September 2015, Neusser worked for VW as head of Development for VW Brand and was also on the management board for VW Brand. From October 2011 until July 2013, Neusser served as the head of Engine Development for VW. Jens Hadler: from May 2007 until March 2011, Hadler worked for VW as head of Engine Development for VW. Richard Dorenkamp: from 2003 until December 2013, Dorenkamp worked for VW as the head of VW’s Engine Development After-Treatment Department in Wolfsburg, Germany. From 2006 until 2013, Dorenkamp led a team of engineers that developed the first diesel engine that was designed to meet the new, tougher emissions standards in the United States. Bernd Gottweis: from 2007 until October 2014, Gottweis worked for VW as a supervisor with responsibility for Quality Management and Product Safety. Oliver Schmidt: from 2012 through February 2015, Schmidt was the General Manager in charge of the Environment and Engineering Office, located in Auburn Hills, Michigan. From February 2015 through September 2015, Schmidt returned to VW headquarters to work directly for Neusser, including on emissions issues. Jürgen Peter: Peter worked in the VW Quality Management and Product Safety Group from 1990 until the present. From March 2015 until July 2015, Peter was one of the VW liaisons between the regulatory agencies and VW. According to the charging documents and statement of facts filed with the court, in 2006, VW engineers began to design a new diesel engine to meet stricter U.S. emissions standards that would take effect by model year 2007. This new engine would be the cornerstone of a new project to sell diesel vehicles in the United States that would be marketed to buyers as “clean diesel,” a project that was an important strategic goal for VW’s management. When the co-conspirators realized that they could not design a diesel engine that would both meet the stricter NOx emissions standards and attract sufficient customer demand in the U.S. market, they decided they would use a software function to cheat standard U.S. emissions tests. VW engineers working under Dorenkamp and Hadler designed and implemented a software to recognize whether a vehicle was undergoing standard U.S. emissions testing on a dynamometer or it was being driven on the road under normal driving conditions. The software accomplished this by recognizing the standard published drive cycles. Based on these inputs, if the vehicle’s software detected that it was being tested, the vehicle performed in one mode, which satisfied U.S. NOx emissions standards. If the software detected that the vehicle was not being tested, it operated in a different mode, in which the vehicle’s emissions control systems were reduced substantially, causing the vehicle to emit NOx up to 40 times higher than U.S. standards. Disagreements over the direction of the project were articulated at a meeting over which Hadler presided, and which Dorenkamp attended. Hadler authorized Dorenkamp to proceed with the project knowing that only the use of the defeat device software would enable VW diesel vehicles to pass U.S. emissions tests. Starting with the first model year 2009 of VW’s new “clean diesel” engine through model year 2016, Dorenkamp, Neusser, Hadler and their co-conspirators installed, or caused to be installed, the defeat device software into the vehicles imported and sold in the United States. In order to sell their “clean diesel” vehicles in the United States, the co-conspirators lied to the EPA about the existence of their test-cheating software, hiding it from the EPA, CARB, VW customers and the U.S. public. Dorenkamp, Neusser, Hadler, Gottweis, Schmidt, Peter and their co-conspirators then marketed, and caused to be marketed, VW diesel vehicles to the U.S. public as “clean diesel” and environmentally-friendly. Around 2012, hardware failures developed in certain of the diesel vehicles. VW engineers believed the increased stress on the exhaust system from being driven in the “dyno mode” could be the cause of the hardware failures. In July 2012, VW engineers met with Neusser and Gottweis to explain what they believed to be the cause of the hardware failures and explained the defeat device. Gottweis and Neusser each encouraged further concealment of the software. In 2014, the co-conspirators perfected their cheating software by starting the vehicle in “street mode,” and, when the defeat device realized the vehicle was being tested, switching to the “dyno mode.” To increase the ability of the vehicle’s software to recognize that it was being tested on the dynamometer, the VW engineers activated a “steering wheel angle recognition feature.” With these alterations, it was believed the stress on the exhaust system would be reduced because the engine would not be operating for as long in “dyno mode.” The new function was installed in existing vehicles through software updates. The defendants and other co-conspirators falsely represented, and caused to be represented, to U.S. regulators, U.S. customers and others that the software update was intended to improve durability and emissions issues in the vehicles when, in fact, they knew it was used to more quickly deactivate emission control systems when the vehicle was not undergoing emissions tests. After years of VW selling their “clean diesel” vehicles in the United States that had the cheating software, in March 2014, West Virginia University’s Center for Alternative Fuels, Engines and Emissions published the results of a study commissioned by the International Council on Clean Transportation (ICCT). The ICCT study identified substantial discrepancies in the NOx emissions from certain VW vehicles when tested on the road compared to when these vehicles were undergoing EPA and CARB standard drive cycle tests on a dynamometer. Rather than tell the truth, VW employees, including Neusser, Gottweis, Schmidt and Peter, pursued a strategy to disclose as little as possible – to continue to hide the existence of the software from U.S. regulators, U.S. customers and the U.S. public. Following the ICCT study, CARB, in coordination with the EPA, attempted to work with VW to determine the cause for the higher NOx emissions in VW diesel vehicles when being driven on the road as opposed to on the dynamometer undergoing standard emissions test cycles. To do this, CARB, in coordination with the EPA, repeatedly asked VW questions that became increasingly more specific and detailed, and tested the vehicles themselves. In implementing their strategy of disclosing as little as possible, Neusser, Gottweis, Schmidt, Peter and their co-conspirators provided EPA and CARB with testing results, data, presentations and statements in an attempt to make it appear that there were innocent mechanical and technological problems to blame, while secretly knowing that the primary reason for the discrepancy was their cheating software that was installed in every VW diesel vehicle sold in the United States. The co-conspirators continued this back-and-forth with the EPA and CARB for over 18 months, obstructing the regulators’ attempts to uncover the truth. The charges in the indictment are merely accusations and each defendant is presumed innocent unless and until proven guilty. The case was investigated by the FBI and EPA-CID. The prosecution and corporate investigation are being handled by Securities and Financial Fraud Unit Chief Benjamin D. Singer and Trial Attorneys David Fuhr, Alison Anderson, Christopher Fenton and Gary Winters of the Criminal Division’s Fraud Section; Trial Attorney Jennifer Blackwell of the Environment and Natural Resources Division’s Environmental Crimes Section; and from the U.S. Attorney’s Office for the Eastern District of Michigan, Criminal Division Chief Mark Chutkow and White Collar Crime Unit Chief John K. Neal and Assistant U.S. Attorney Timothy J. Wyse. The Justice Department’s Office of International Affairs also assisted in the case. The Justice Department also extends its thanks to the Office of the Public Prosecutor in Braunschweig, Germany. The Civil Resolutions: The first civil settlement resolves EPA’s remaining claims against six VW-related entities (including Volkswagen AG, Audi AG and Porsche AG) currently pending in the multidistrict litigation before U.S. District Judge Charles R. Breyer of the Northern District of California. EPA’s complaint alleges that VW violated the Clean Air Act by selling approximately 590,000 cars that the United States alleges are equipped with defeat devices and, during normal operation and use, emit pollution significantly in excess of EPA-compliant levels. VW has agreed to pay $1.45 billion to resolve EPA’s civil penalty claims, as well as the civil penalty claim of CBP described below. The consent decree resolving the Clean Air Act claims also resolves EPA’s remaining claim in the complaint for injunctive relief to prevent future violations by requiring VW to undertake a number of corporate governance reforms and perform in-use testing of its vehicles using a portable emissions measurement system of the same type used to catch VW’s cheating in the first place. Today’s settlement is in addition the historic $14.7 billion settlement that addressed the 2.0 liter cars on the road and associated environmental harm announced in June 2016, and $1 billion settlement that addressed the 3.0 liter cars on the road and associated environmental harm announced in December 2016, which together included nearly $3 billion for environmental mitigation projects. A second civil settlement resolves civil fraud claims asserted by U.S. Customs and Border Protection (CBP) against VW entities. VW entities violated criminal and civil customs laws by knowingly submitting to CBP material false statements and omitting material information, over multiple years, with the intent of deceiving or misleading CBP concerning the admissibility of vehicles into the United States. CBP enforces U.S. customs laws as well as numerous laws on behalf of other governmental agencies related to health, safety, and border security. At the time of importation, VW falsely represented to CBP that each of the nearly 590,000 imported vehicles complied with all applicable environmental laws, knowing those representations to be untrue. CBP’s relationship with the importing community is one based on trust, and this resolution demonstrates that CBP will not tolerate abrogation of importer responsibilities and schemes to defraud the revenue of the United States. The $1.45 billion paid under the EPA settlement also resolves CBP’s claims. In a third settlement, VW has agreed to pay $50 million in civil penalties for alleged violations of FIRREA. The Justice Department alleged that a VW entity supported the sales and leasing of certain VW vehicles, including the defeat-device vehicles, by offering competitive financing terms by purchasing from dealers certain automobile retail installment contracts (i.e. loans) and leases entered into by customers that purchased or leased certain VW vehicles, as well as dealer floorplan loans. These financing arrangements were primarily collateralized by the vehicles underlying the loan and lease transactions. The department alleged that certain of these loans, leases and floorplan financings were pooled together to create asset-backed securities and that federally insured financial institutions purchased certain notes in these securities. Today’s FIRREA resolution is part of the department’s ongoing efforts to deter wrongdoers from using the financial markets to facilitate their fraud and to ensure the stability of the nation’s financial system. Except where based on admissions by VW, the claims resolved by the civil agreements are allegations only. The civil settlements were handled by the Environmental and Natural Resources Division’s Environmental Enforcement Section, with assistance from the EPA; the Civil Division’s Commercial Litigation Branch; and CBP.

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