The Heat Is … Off? Porsche Pays Up to Distance Itself From Diesel Scandal

Porsche, builder of SUVs (but also some sports cars), wasn’t eager to draw out the nearly four-year-long diesel emissions scandal any longer. The automaker has agreed to fork over a third bundle of cash to rid itself of the scandal foisted on the brand by its Volkswagen AG parent company.

Well, that’s not entirely correct. German prosecutors are still probing VW Group brass, both current and former, but the mechanical and regulatory side of Porsche’s involvement will pass into history after it pays $599 million.

According to German public broadcaster Deutsche Welle, prosecutors say Porsche “abstained from a legal challenge,” preferring instead to pay the fine and be done with it. The fine, which brings Porsche’s payout to $2.57 billion since the scandal broke, covers the sale of vehicles equipped with emissions-rigged diesel engines since 2009.

For Porsche, the penalties are an especially bitter pill, as the non-compliant engines did not originate from its shop. Those mills — and their undisclosed defeat devices — were Audi’s baby.

Still, the payment, which will appear in the company’s second-quarter earnings report, closes the book on the non-human side of the dieselgate affair. Volkswagen added a provision for 1 billion euros in Q1, knowing the fine was coming down the pipe. All told, VW’s fiscal punishment for its deception amounts to over $33 billion.

Managers are still under scrutiny for allowing it to happen, however. Last month, German prosecutors indicted former VW CEO Martin Winterkorn on fraud charges stemming from the scandal. It was that country’s first criminal indictment in relation to the diesel affair. Winterkorn also faces charges in the U.S., where James Liang, a former VW engineer, and Oliver Schmidt, former head of the automaker’s U.S. environmental and engineering office, are already serving prison terms.

Will Germany’s legal axe land on the necks of current VW Group brass? As the painfully drawn-out saga continues, many are asking this exact question.

[Image: Porsche]