January 11, 2017 / 9:53 AM / in 7 months

Timeline: Volkswagen's long road to a U.S. Dieselgate settlement

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The Volkswagen logo is seen at the company's display during the North American International Auto Show in Detroit, Michigan, U.S., January 10, 2017.Mark Blinch

(Reuters) - Sixteen months after admitting in September 2015 that it cheated U.S. diesel emissions tests, Volkswagen (VOWG_p.DE) is still battling regulatory investigations and investors lawsuits, and striving to rebuild its reputation.

Following are key developments in the scandal.

2005: VW tries to make a new diesel engine, the EA 189, to conform to much stricter U.S. pollution standards that focus on cutting nitrogen oxide (NOx) emissions. A group of VW employees, whose identity is still being determined, decided to use software to modify engine performance to cheat emissions tests.

May 2014: The California Air Resources Board (CARB) receives a study published by the International Council on Clean Transportation (ICCT) which shows NOx values for VW diesel vehicles deviate significantly between bench testing and road operation. CARB requests an explanation from VW.

May 23, 2014: A memo about the ICCT study is prepared for Martin Winterkorn, then VW group CEO, which was included in what the company calls his "extensive weekend email". VW says it has not been documented as to whether, or how much, Winterkorn took notice of the memo.

Nov. 14, 2014: Winterkorn receives another memo that contains, among other items, information on current product defects and which refers to costs of approximately 20 million euros ($22 million) for the diesel issue in North America.

December 2014: VW offers to recalibrate the first and second generation EA 189 diesel engines as part of regular service work in the hope that the engines will then pass muster with CARB.

In 2014: Winterkorn received information on problems with U.S. diesel emissions tests. The issue "did not initially receive particular attention at the management levels" since management regarded it as a "technical problem that did not differ from other everyday technical problems," VW said in a 2016 statement summarizing its response to a shareholder lawsuit.

Summer 2015: VW's Committee for Product Safety (APS) establishes a diesel task force after CARB tests show modified engines still produce excessive levels of NOx. VW retains U.S. law firm Kirkland & Ellis to advise on questions related to U.S. emissions law.

July 27, 2015: Some VW employees discuss the U.S. diesel problems on the sidelines of a regular meeting about damage and product issues, in the presence of Winterkorn and Herbert Diess, head of the VW brand. VW says it is still constructing details of the meeting, and establishing whether those present understood the change in software violated U.S. regulations. VW says Winterkorn asked for further clarification of the issue.

End of August, 2015: VW technicians give a full explanation of causes for discrepancies in NOx emissions to VW's in-house lawyers as well to U.S. attorneys from Kirkland & Ellis. A management board member - not identified by VW - realizes the software changes constitute a defeat device prohibited under U.S. law.

Sept. 3, 2015: VW formally communicates information about the defeat device to CARB and the U.S. Environmental Protection Agency (EPA) during a meeting. Winterkorn is informed in a note, dated Sept. 4.

Sept. 18, 2015: The EPA issues a public notice of violation of the Clean Air Act to VW, alleging that model year 2009-2015 VW and Audi diesel cars with 2.0 liter engine included defeat devices. The disclosure by U.S. regulators comes as a surprise to VW which had hoped to resolve the case "amicably" with U.S. authorities without having to make a disclosure. VW admits to 11 million vehicles affected worldwide.

Sept. 23, 2015: Winterkorn resigns, saying his departure cleared the way for a "fresh start."

Sept. 25, 2015: VW appoints Matthias Mueller, head of its Porsche unit, as new chief executive.

Oct. 14, 2015: Winfried Vahland, a company veteran designated to head up operations in the United States from Nov. 1, 2015 onwards, unexpectedly quits.

Jan. 4, 2016: The United States Justice Department files a civil suit against VW seeking up to $46 billion for Clean Air Act violations.

March 29, 2016: The U.S. Federal Trade Commission files a lawsuit against VW for false advertising over claims that diesel vehicles were environmentally friendly, saying U.S. consumers suffered "billions of dollars in injury."

April 22, 2016: VW posts a 4.1 billion euros operating loss for 2015, thanks a 16.2 billion euros hit to pay for the emissions scandal.

Oct. 25, 2016: U.S. District Judge Charles Breyer in San Francisco signs off on a settlement with federal and California regulators. VW agrees to spend up to $10.03 billion on vehicle buybacks and owner compensation and $4.7 billion on programs to offset excess emissions and boost clean-vehicle projects.

Nov. 22, 2016: VW says it will stop selling diesel vehicles in the United States.

Dec. 22, 2016: U.S. District Judge Breyer says an agreement in principle has been reached to provide "substantial compensation" to owners of about 80,000 3.0 liter diesel vehicles.

Jan. 4, 2017: VW says CEO Mueller will skip the Detroit auto show.

Jan. 10, 2017: VW says it is in advanced talks with the U.S. Department of Justice and U.S. Customs and Border protection to reach a $4.3 billion settlement of criminal investigations and legal fines in connection with the emissions cheating.

Jan. 11, 2017: VW's supervisory board meets to discuss U.S. settlement.

Reporting by Edward Taylor; Editing by Mark Potter

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