Volkswagen prepares to plead guilty and pay US regulators $4.3 billion – The Verge

Posted: Wednesday, January 11, 2017

Volkswagen is close to reaching a final deal with US regulators over its 2015 diesel emissions scandals, reports Reuters. The German automaker said it expects to plead guilty to criminal charges and pay the government some $4.3 billion as a settlement. In September last year, the company admitted installing secret software in more than half a million vehicles sold in the US that it used to fool exhaust emissions tests. Investment firm Evercore ISI said in a research note it expects the settlement would “draw a line under all remaining US-related legal risk.”

According to The New York Times, the company is expected to plead guilty to a number of charges including conspiracy to violate the Clean Air Act and the obstruction of justice. The $4.3 billion fine would cover criminal and civil charges from the federal government (including environmental penalties) but is separate to the billions the company has set aside for civil suits with individual car owners. Including these, the cost of settling various claims is expected to exceed $20 billion in the US, making it one of the most expensive corporate scandals in history.

News of the impending settlement comes as prosecutors move to tie up charges against the German automaker. This weekend, VW executive Oliver Schmidt (who ran the company’s regulatory compliance office) was accused of conspiracy to defraud the United States and taken into custody by the FBI at Miami International Airport. Schmidt is charged with defrauding the government and violating the Clean Air Act, and is the second individual to receive criminal charges in the case. The first was Volkswagen engineer James Liang, who pleaded guilty last September to similar charges.

Despite the scandal, the Volkswagen Group achieved record sales last year. Including its Audi, Porsche, and Skoda brands, the company sold some 10.3 million vehicles worldwide in 2016, an increase of 3.8 percent year-on-year. It’s possible that the VW Group will overtake rival firm Toyota as the world’s largest carmaker by volume, with the Japanese company expected to announce its own sales figures next month.


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