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California board rejects Volkswagen's diesel fix plan


(Reuters) — The California Air Resources Board said on Tuesday it rejected Volkswagen AG's plan to fix 2.0 liter diesel cars equipped with software that allows them to emit up to 40 times legally allowable pollution.

The state said VW's proposed fix was "incomplete, substantially deficient and falls far short of meeting the legal requirements." It also said the proposal could not be implemented soon enough.

California sent VW a confidential letter offering a detailed explanation of why its proposed solution, or fix, does not work. The state said it will continue its investigation as well as talks with VW.

The automaker said in a statement that it is in talks to find a solution, and said the rejection addresses the initial recall plans submitted to California in December.

"Since then, Volkswagen has had constructive discussions with CARB, including last week when we discussed a framework" to address the issue.

VW has admitted using software that circumvented U.S. and California pollution rules by fully activating the exhaust scrubbing systems only when a car was being put through precisely prescribed government emissions tests.

The state did not assess any immediate penalties, but it issued a new notice that VW had violated California air quality regulations.

VW CEO Matthias Muller is meeting with U.S. Environmental Protection Agency chief Gina McCarthy on Wednesday to discuss the emissions scandal that involves nearly 600,000 vehicles in the United States and up to 11 million vehicles worldwide.

EPA said in a statement it agrees with California "that Volkswagen has not submitted an approvable recall plan to bring the vehicles into compliance and reduce pollution. EPA has conveyed this to the company previously."

VW said it is "committed to working cooperatively with CARB and other regulators, and we plan to continue our discussions tomorrow when we meet with the EPA."

Muller's first U.S. tour -- in which he repeatedly apologized for the emissions scandal -- has not gone as planned and has come under criticism for comments he made in a U.S. radio interview in which he denied VW officials lied in evading emissions rules.

Connecticut Attorney General George Jepsen called Muller's comments disturbing. "We now learn that the company's newly appointed and most senior leader doesn't believe Volkswagen lied, which is undisputable, and cannot say when it plans to deliver its solution to a problem that is affecting millions of Americans, which is unacceptable," Jepsen said. "The time for empty apologies and hollow pledges of cooperation is over."

VW officials have expressed optimism they will soon win approval of a plan to fix the vehicles. They face a separate Feb. 2 deadline to submit a plan to fix 80,000 larger Porsche, Audi and VW 3.0 liter vehicles.

Separately, Tennessee Gov. Bill Haslam said he met in Washington on Monday with Muller. "We obviously have a keen interest in getting their legal issues solved so they can go back to selling cars," Haslam, whose state is home to a VW factory, said in a Reuters interview on the sidelines of the Detroit auto show.

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