Thursday, June 16, 2005

VW to pay $1.1 million fine over pollution device defect

By Jeff Plungis / Detroit News Washington Bureau

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WASHINGTON -- Volkswagen AG agreed to pay a $1.1 million fine for failing to fix or notify federal officials about a faulty oxygen sensor that increased pollution from its Golf, Jetta and New Beetle models.

The Environmental Protection Agency said Wednesday it was the largest fine ever imposed for this type of violation. The fine is part of a settlement filed in U.S. District Court in Washington.

EPA officials said the VW defect permitted thousands of tons of pollutants to enter the atmosphere, including nonmethane hydrocarbons, which cause smog, and carbon monoxide, a poisonous gas.

"This case demonstrates EPA's commitment to ensuring that automobile manufacturers comply with emissions regulations," said Thomas Skinner, acting assistant administrator of EPA's office of enforcement and compliance.

The faulty oxygen sensor was found on 326,000 VW models from 1999 through 2001.

VW has already conducted a recall to fix the cars. EPA estimated VW spent $26 million on the recall.

The oxygen sensor on the affected vehicles could crack in cool and damp environments, prompting the "check engine" light to illuminate.

VW received numerous warranty claims for cracked oxygen sensors in 1999 and 2000, but it did not report the problem to the federal government until June 2001, according to an EPA statement.

Besides the fine, VW agreed to improve its emissions defect investigation and reporting system, the EPA said.

"We were remiss on our end on reporting some of those defects," said Steve Keyes, spokesman for Volkswagen of America. "We have now put processes in place so when these problems do occur, we will be able to notify EPA and take care of our customers."

You can reach Jeff Plungis at (202) 906-8204 or jplungis@detnews.com.