Volkswagen Expected to Plead Guilty, Reach $4.3 Billion Criminal Settlement
Volkswagen has negotiated a conclusive plan with the U.S. Department of Justice for a criminal and civil settlement worth $4.3 billion. While the company has confirmed the status of the settlement, it also stated that the full impact of the deal on its annual finances could not yet be established.
Germany’s largest carmaker said Tuesday that it anticipates a guilty plea in response to the criminal charges against it. It also expects to pay the full settlement over accusations that it intentionally modified over half of a million diesel vehicles with software designed to cheat U.S. emissions standards.
Reuters reports that VW’s supervisory board will meet on Wednesday for final approval on the matter. However, they are likely eager to move past the company’s emissions-cheating scandal as quickly as possible — or at least before the January 20th inauguration of President-elect Donald Trump.
“There is apprehension in the market that Trump may become an unpredictable president and turn against non-U.S. companies,” announced Bankhaus Metzler analyst, Juergen Pieper. “The deal is not cheap but it gives clarity to investors and relief to VW.”
As part of a settlement, Volkswagen is required to comply with significant reforms and face monitoring from an independent overseer.
However, it is not apparent if the settlement will have any impact on the criminal investigations into individual managers and executives. Two VW employees have already been charged by U.S. prosecutors with conspiracy to defraud the United States over the emissions cheating scandal. Prosecutors in Germany have continued to investigate whether former VW CEO Martin Winterkorn intentionally deceived investors by withholding information about the magnitude of its problem with U.S. regulators.
Also under close scrutiny are Volkswagen brand chief Herbert Diess and chairman Hans Dieter Pötsch. VW has maintained that no board members were involved in the planning or concealment of the scandal, explaining that it did not release information on the diesel crisis sooner because it expected to reach a negotiated settlement with U.S. regulators.
The automaker recently agreed to separate civil settlements totaling roughly $17 billion — compensating U.S. consumers and dealers who owned diesel vehicles affected by the scandal while also offering buybacks and software fixes.
Earlier today. Volkswagen announced it enjoyed record group sales in 2016, for a combined sum of 10.3 million vehicles. That number should place VW as the world’s largest car producer by volume for 2016 and is an increase of 3.8 percent on last year’s figure.
A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.
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This is a ridiculous amount of money to fine a company, considering the actual damages from the incremental emissions probably amounts to about 48 cents. . .
That's what - $7,500 per cheating car? Why can't private citizens pay the government $7,500 and drive / import a non-compliant car? Breaking the law is okay when you have attorneys?