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Germany to accept diesel software fix rather than retrofit millions of cars

BERLIN — The German government will not force the car industry to make costly changes to engines to cut diesel emissions but will settle for software updates for around 2 million vehicles, industry and government sources said on Tuesday. The sources were speaking before a summit of politicians and car executives scheduled for Wednesday to discuss ways to cut inner-city pollution to try to head off bans on diesel cars — a sensitive issue ahead of national elections next month. The summit must also start to restore the reputation of one of Germany's major industries which has been badly tarnished since the Volkswagen emissions scandal broke in September 2015. The auto industry has agreed to software updates for around 2 million cars that will cost around 300 million euros ($354 million), a government source said. An industry source said foreign car makers had not agreed to participate for now. The deal suggests the industry has headed off demands for hardware upgrades that would cut more pollution but would also be much more expensive — with the potential costs as high as 10 billion euros. The deal also foresees a range of other measures to reduce emissions, the sources said, such as subsidies for electric buses, taxis and other municipal vehicles, as well as a commitment to increase the number of charging stations. The sector and the government will each contribute half to a 500 million euro fund aimed at helping local governments reduce pollution, blamed for causing respiratory diseases. CITY BANS The compromise might not cut emissions enough to stop bans of diesel cars in German cities - like the one in Stuttgart confirmed by a regional court last week. DUH, the environmental lobby group that brought the Stuttgart case, has said it wants moves to go beyond voluntary software updates or it will take further legal action. Chancellor Angela Merkel's conservatives have come under fire from consumer and environmental groups as well as opposition lawmakers for their close links to carmakers. "The car industry can always rely on the support of the government when things get difficult," said Timo Lange, a campaigner with LobbyControl, a non-profit group. Transport Minister Alexander Dobrindt rejected suggestions on Tuesday that he is too closely tied to the industry. The Environment Ministry has already made clear that software improvements can only be a first step as they reduce nitrogen oxide emissions by about 25 percent on average.

UAW Falls 87 Votes Short Of Major Victory In South

Just 87 votes at the Volkswagen plant in Tennessee separated the United Auto Workers union from what would have been its first successful organization of workers at a foreign automaker in the South. Instead of celebrating a potential watershed moment for labor politics in the region, UAW supporters were left crestfallen by the 712-626 vote against union representation in the election that ended Friday night. The result stunned many labor experts who expected a UAW win because Volkswagen tacitly endorsed the union and even allowed organizers into the Chattanooga factory to make sales pitches. The loss is a major setback for the UAW's effort to make inroads in the growing South, where foreign automakers have 14 assembly plants, eight built in the past decade, said Kristin Dziczek, director of the labor and industry group at the Center for Automotive Research, an industry think tank in Michigan. "If this was going to work anywhere, this is where it was going to work," she said of the Volkswagen vote. Organizing a Southern plant is so crucial to the union that UAW President Bob King told workers in a speech that the union has no long-term future without it. The loss means the union remains largely quarantined with the Detroit Three in the Midwest and Northeast. Many viewed VW as the union's best chance to gain a crucial foothold in the South because other automakers have not been as welcoming as Volkswagen. Labor interests make up half of the supervisory board at VW in Germany, and they questioned why the Chattanooga plant is the company's only major factory worldwide without formal worker representation. VW wanted a German-style "works council" in Chattanooga to give employees a say over working conditions. The company says U.S. law won't allow it without an independent union. In Chattanooga, the union faced stern opposition from Republican politicians who warned that a UAW victory would chase away other automakers who might come to the region. Sen. Bob Corker of Tennessee was the most vocal opponent, saying that he was told that VW would soon announce plans to build a new SUV in Chattanooga if workers rejected the union. That was later denied by a VW executive, who said the union vote had no bearing on expansion decisions. Other state politicians threatened to cut off state incentives for the plant to expand if the union was approved.

Volkswagen could outsell GM in China for the first time in nine years

As of the end of November, Volkswagen had sold 70,000 more cars than General Motors in China in 2013, making it appear inevitable that VW will outsell GM there. The feat would return the German brand to the top of chart in China for the first time in nine years, but even the second-place getter won't be complaining too loudly: both automakers sold more than three million vehicles in a market pegged to hit 16 million sales this year.
Volkswagen said it could have sold more cars if it had had more production capacity in China. The arrival of a new-to-China Audi A4, a China-built A3 sedan, the VW Bora and Skoda Octavia, as well as an $18.2-billion-euro investment in the country to construct new factories, means VW should see its numbers grow in 2014. GM's lineup is expanding next year, too, adding four Chevrolet nameplates and two vehicles to its Baojun brand as it tries to get to five million in sales by 2015.
Among other automakers, Ford benefited from good product and woes for Japanese automakers over a territorial dispute with China, outselling Toyota by almost 32,000 units through the end of November. The Ford Focus is China's best-selling vehicle so far this year.