Business & Real Estate

California rejects Volkswagen recall plan on 3-liter cars

A Volkswagen diesel vehicles undergoes testing in California.
A Volkswagen diesel vehicles undergoes testing in California. West Virginia University

Two weeks after agreeing to an epic settlement, Volkswagen is still having major headaches with California and federal regulators over its tainted diesel-engine vehicles.

The California Air Resources Board announced late Wednesday that it has rejected Volkswagen’s plans for recalling the 3-liter diesel cars implicated in the German automaker’s air-pollution scandal.

The board, which was instrumental in uncovering the irregularities in the Volkswagen cars, informed the automaker that its recall plans for the 3-liter vehicles are “incomplete, substantially deficient and fall far short of meeting the legal requirements” to bring the cars into compliance with air-pollution regulations. Among other things, Volkswagen has failed to “demonstrate how the proposed fixes are designed to correct the noncomformities,” the air board said in a letter to the company.

While the rejection affects only 16,000 Volkswagens, Audis and Porsches on the road in California, the problem doesn’t end there. The U.S. Environmental Protection Agency said it agrees with the California agency that Volkswagen needs to come up with an acceptable plan for recalling the 3-liter cars.

“VW has not presented an approvable proposed recall plan for the 3.0-liter diesel vehicles,” the federal agency said.

The rejection shows Volkswagen’s legal problems are far from over, even after the carmaker agreed last month to pay up to $14.7 billion to settle federal and state charges over the air-pollution problems. As much as $10 billion of that money will be spent buying back or modifying nearly a half-million cars sold in the United States after 2009, including more than 70,000 in California.

The settlement covers 2-liter engine vehicles but not the pricier 3-liter models.

Volkswagen said the California air board’s decision “is a procedural step under California state law ... We continue to work closely with the U.S. Environmental Protection Agency and CARB to try to secure approval of a technical resolution ... as quickly as possible.”

Federal and state regulators announced last fall that Volkswagen diesel vehicles were equipped with “defeat device” software that activated air-pollution controls during emissions testing but turned them off when the cars were on the road. Automotive experts say the emissions controls can hamper vehicle performance and fuel efficiency.

After initial testing by researchers from West Virginia University, engineers at the Air Resources Board’s laboratory in El Monte were able to confirm the presence of the defeat devices last summer. The discovery forced Volkswagen executives to own up to the problems after months of denials.

Dale Kasler: 916-321-1066, @dakasler

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