German carmakers face political reckoning over diesel

BERLIN/FRANKFURT (Reuters) – German lawmakers must balance conflicting demands at a national summit to discuss pollution from diesel vehicles this week, wanting to appear tough ahead of federal elections next month while trying to avoid damaging the car industry.

Political leaders and car industry executives will meet in Berlin on Wednesday to discuss inner-city pollution in a last-ditch effort to restore the battered reputation of the automotive industry and preserve hundreds of thousands of jobs.

Germany is open in principle to class action lawsuits against carmakers engulfed in the emissions cheating scandal, the Transport Ministry said on Monday, taking a hard line ahead of the talks.

Germany is home to some of the world’s largest carmakers but the industry has been under a cloud since Volkswagen (VOWG_p.DE) admitted to cheating emissions tests in 2015.

The sense of crisis deepened when German magazine Der Spiegel accused VW, Daimler (DAIGn.DE), BMW (BMWG.DE), Audi (NSUG.DE) and Porsche of colluding for decades on prices, technologies and the choice of suppliers to the detriment of foreign rivals.

“The meeting is taking place for politicians to express their expectations to the car industry. It is about what manipulation there was and how the industry will make good the damage,” government spokeswoman Ulrike Demmer said on Monday.

She said German Chancellor Angela Merkel herself was taking a personal interest, despite being on holiday.

“We need a strong and innovative and also honest industry, and it is about criticising what there is to be criticised but always in the knowledge that this is a strategically important branch of industry,” Demmer added.

A motor mechanic measures exhaust emissions in a diesel-engined car in Eichenau, Germany July 28, 2017.Michaela Rehle

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