So they skimped on the emissions controls for a saving of less than $100 per car?

Tells you all you need to know about Daimler's attitude.

And they continue to talk cobblers about how wonderfully clean diesels will be, which make no mistake about it, the see as the primary dive unit going forward.

Not when any ICE engine and its catalytic converter are cold, they aren't low emission:

'Unfortunately, the majority of vehicles Emissions Analytics has tested take more than 5 minutes to warm up their emission-control systems fully.

It's the same reason that in hybrids and plug-in hybrids, when the engine kicks on for the first time after a period of electric-only operation, it usually stays on for 2 to 5 minutes before switching the car back to the default mode of all-electric power.

While those engines are specially fitted and tuned to warm up exceptionally quickly and remain low-emission in frequent on/off cycles, they still must heat their catalytic converters to temperatures of several hundred degrees F.

Across all the cars Emissions Analytics has tested, it calculated that even after 5 minutes, the average NOx emitted by diesel engines of all ages is 7 times the legal limit for new cars today(0.08 g/km) when fully warmed up and about 30 percent more than that when cold.

Gasoline engines suffer from much higher NOx emissions when cold versus when they're warm.

According to the company's calculations, gasoline engines are 4 times over that limit when cold, but emit less than half the maximum permissible NOx once fully warmed up.'

http://www.greencarreports.com/news/1111467_combustion-engines-high-emissions-from-short-commutes-a-huge-challenge

All laboratory test cycles include a cold start. It has been so since the 1970's. Thus, a cold start is always part of the test results. The relative impact varies between the different test cycles. In fact, the ”old” European NEDC test cycle is actually one of the toughest (that I know of) in this respect. This furthermore aggravated by the “slow” city driving after start. The impact in the US FTP test is roughly less than half of that in NEDC, since the driving distance per cold start is more than twice as long in FTP. The impact of the cold start will be somewhat less in the new WLTP cycle than in the NEDC cycle. WLTP is based on logging of huge fleets of cars around the world and should be representative of normal driving. The cycle is based on the latest and best knowledge we have on how cars are used in real traffic. Still, this is not sufficient to regulate emissions under all driving conditions and this is why the on-road testing is now introduced in the RDE legislation in Europe.

I have not studied how Emission Analytics do but according to the new European RDE testing, a cold start should be included. Unfortunately, there are a number of organizations and companies out there who conduct testing and their results may not always be representative of “real-world” driving. They often highlight some specific driving condition. It is not uncommon that on-road tests are only conducted with warm engines; primary to save time and cost. All-in-all, consumers get misinformed by all the headlines such tests may create.

Note that “cold start” usually is defined as a start with cold engine at ~25°C. Cold starts at lower ambient temperatures increase emissions much more than at 25°C. EU regulates this for CO and HC from gasoline cars at -7°C, albeit that the limits are much higher than in the standard test. Cold start emissions of CO and HC are considered much lower from diesel cars and thus, they do not have to be tested. This is based on comprehensive knowledge on results in cold starts in the past. The main problem for cold starts is unregulated emissions that pose health hazard for humans. Gasoline cars are much more affected than diesel cars in this respect (therefore, we want to regulate HC at cold starts). The difference in relative levels can be in the range of 10-100. NOx is generally not a problem during cold starts, since the engine-out NOx is lower (due to lower NO formation) than in a hot start, unless the manufacturer “cheats” in some way.

Stopping the engine via conventional start/stop systems or in a hybrid drive is not necessarily “bad” for emissions. This is of particular relevance to consider for engines with low exhaust temperature, such as e.g. lean-burn gasoline engines and diesel engines. At idle, the exhaust temperature might be lower than catalyst light-off temperature and leaving the engine on idle will cool down the catalyst. Stopping the engine gives much lower heat loss and thus, higher catalyst efficiency. You have perhaps noted that there have been several articles on mild/micro hybrid diesel cars that reduce NOx emissions compared to conventional diesel cars on this site. Synergies via hybrid systems can be identified not only regarding higher catalyst temperature but this will be another topic.

Even thirty years ago, it was common knowledge in the industry that every vehicle "failed the first bag" because the catalyst was cold.

One of the responses I saw was an electrically pre-heated catalyst cartridge, so the catalyst would "light off" right away.  It had a terminal that took a starter-sized power cable.  I can only imagine the size of the battery required to feed that thing.