2005 Volkswagen of America Settlement

On June 15, 2005, the U.S. Environmental Protection Agency and the Department of Justice announced a major Clean Air Act settlement with Volkswagen of America, Inc., to resolve Volkswagen's failure to promptly notify EPA and correct defective oxygen sensors on at least 329,000 of their 1999, 2000 and 2001 Golfs, Jettas and New Beetles.

Manufacturers of new motor vehicles must file an emission defect information report (EDIR) with EPA not more than 15 working days after an emission-related defect is found to affect 25 vehicles or engines of the same model year.

Violation: Volkswagen of America, Inc. failed file EDIR for one year after discovery of emission defect

Penalty: $1.1 million

Remediation/Injunctive Relief:

• At cost of $26 million, recall in January 2002 of 329,422 Golfs, Jettas and New Beetles, model years 1999-2001, sold with the defect. VW reprogrammed oxygen (O₂) sensor control software on 88 percent of affected vehicles; 27 percent were fitted with new O₂ sensors.

• At estimated cost of $660,000, VW implemented an enhanced defect tracking, investigating and reporting system.

Background:

• The defect occurs gradually on engine start-up in cool and damp environments, when the O₂ sensor (part of the emissions control system) cracks from "thermal shock." The dashboard indicator light illuminates, telling the owner to "Check Engine."

• Defect causes higher levels of non-methane hydrocarbons (NMHC) and carbon monoxide (CO) than Federal emission standards allow. NMHC are key reactants in the production of ozone, a major contributor to cancer-causing smog. CO impairs ability to breathe and is especially harmful to children, people with asthma and the elderly.

Timetable:

• Winter 1999-2000 - Volkswagen receives numerous warranty claims associated with cracked O₂ sensors.

• May, 2001 - EPA finds problem in a random surveillance test.

• June, 2001 - VW submits EDIR.

• January 2002 - VW begins recall.

For additional information, contact:

Angela Fitzgerald
U.S. Environmental Protection Agency (2242A)
1200 Pennsylvania Ave., N.W.
Washington, DC 20460-0001
(202) 564-1018
[email protected]