The Latest: NY AG opens Volkswagen probe; senator says agencies aren’t protecting car buyers

BERLIN – The latest developments in the scandal enveloping Volkswagen over the company’s admission that it rigged emissions tests for diesel-powered cars.

5:10 p.m.

New York Attorney General Eric. T. Schneiderman says he has opened an investigation into the Volkswagen cars and he will collaborate with other states to enforce consumer and environmental protections in the case. “No company should be allowed to evade our environmental laws or promise consumers a fake bill of goods,” Schneiderman said in a statement announcing the probe.

Meanwhile, A U.S. Senator from Florida is pointing to the Volkswagen emissions deception and other recent auto industry scandals to question why government agencies aren’t better protecting people. In a speech Tuesday, Democratic Sen. Bill Nelson questioned what the Obama administration is doing and why it’s not “dropping the hammer” on corporations and executives who deceive the American people. Nelson says the General Motors ignition switch scandal has cost over 100 lives and faulty air bags made by Takata Corp. can explode with too much force also have killed people. And he says VW deceived consumers about the gas mileage their cars can get. Nelson said executives responsible for these problems should go to jail.

4:10 p.m.

A state senator is urging legislative hearings over the Volkswagen emissions scandal in Tennessee, the home of the German automakers lone U.S. plant. Republican Sen. Bo Watson of Chattanooga, a vocal critic of Volkswagen’s labour policies, on Tuesday cited the state’s “significant investment” into the plant in calling for the Senate Finance Committee to investigate the potential of revelations that VW used secret software thwart pollution controls. Volkswagen received a more than $577 million incentive to build the plant in Chattanooga in 2008. Another state and local package worth up $300 million was offered last year to persuade VW to expand the plant to build a new SUV there.

3:00 p.m.

There are some eye-popping numbers already associated with the Volkswagen scandal. About 11 million of the company’s diesel vehicles worldwide have the software that can fool emissions tests. The company is taking a related charge of $7.3 billion. Over two days, VW shares fell 31 per cent, wiping out more than $26 billion (24 billion euros) of the company’s market value.

12:20 p.m.

Lucia Caudet, industry spokeswoman for the European Commission, told reporters at a daily briefing that while it is “premature to draw any conclusions,” the commission needs to “shed light” on VW’s actions. The German company has not yet explained why so-called “defeat devices” were installed on some diesel models sold between 2008 and this year. “We owe it to our consumers and for the environment. We have to be absolutely certain that industry is respecting emission limits for cars,” Caudet said.

11:30 a.m.

Volkswagen CEO Martin Winterkorn apologized again for the scandal, and pledged a fast and thorough investigation. “Millions of people across the world trust our brands, our cars and our technologies,” he said in a video message. “I am endlessly sorry that we have disappointed this trust.” Earlier, Volkswagen disclosed that some 11 million of its diesel vehicles worldwide were fitted with software programmed to switch engines to a cleaner mode during official emissions testing. The software then switches off again, enabling cars to drive more powerfully on the road while emitting as much as 40 times the legal pollution limit. VW said it was setting aside around 6.5 billion euros ($7.3 billion) to cover the cost of fixing the cars.

German Transport Minister Alexander Dobrindt said he was setting up a commission to determine whether the VW diesel vehicles were built and examined in a way that complied with German and European rules. The governments of France and South Korea also said they would investigate the Volkswagen vehicles.

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This story has been corrected to show that Volkswagen shares dropped 31 per cent over two days, not 35 per cent, and that the company’s market value fell by $26 billion, not $30 billion.