Record VW payout in US ‘dieselgate’ settlement

By Redacción MXN Wednesday, January 11, 2017 comments

db2014au01096_acc

Volkswagen has agreed a draft $4.3bn settlement with US authorities over the emissions-rigging scandal.

 

VW has negotiated a “concrete draft” of a settlement with the US Department of Justice and US customs including criminal and civil fines totalling $4.3bn, as well as appointing an independent monitor for the next three years.

 

 

db2016au00912_golf_1055x500Original Image, courtesy of Volkswagen

 

 

The $4.3bn fine means that the total costs associated with the emissions cheating scandal are set to exceed the $19.2bn the company has set aside to deal with the issue.

 

´Dieselgate´, when it broke, initially wiped over 60 billion euros ($64 billion) off VW’s market value. 

 

So far this year, the company has paid some $17.5 billion to settle civil claims from the Justice Department and environmental regulators, and smooth the ruffled feathers of its U.S. dealers and customers.  It has also paid smaller fines in countries such as South Korea, which last week became the first country to jail a VW executive in connection with the scandal.

 

doorbird_appconnectOriginal Image, courtesy of Volkswagen

 

 

The scandal erupted in September 2015 when the US Environmental Protection Agency (EPA) found that many VW cars sold in America had a “defeat device” – or software – in diesel engines that could detect when they were being tested and adjust the performance accordingly to improve results.

 

The German car giant subsequently admitted cheating emissions tests in the US and many countries throughout the world including Mexico.

 

Earlier this week it emerged that VW executives knew about emissions cheating two months before the scandal broke, but chose not to tell US regulators, according to court papers.

 

 

db2014au01096_accOriginal Image, courtesy of Volkswagen

 

The bosses involved include Oliver Schmidt, who was in charge of VW’s US environmental regulatory compliance office from 2012 until March 2015.

 

He was charged on Monday with conspiracy to defraud and has been remanded ahead of a court appearance today.

 

The general market view is that the bulk of the financial damage from Dieselgate is now accounted for, and that outstanding lawsuits against it will still leave the total bill well short of that 30 billion euro benchmark.