Volkswagen announced today that it has agreed to settlements totaling $4.3 billion to resolve criminal, environmental, and civil claims against them in the United States. That brings the total spent so far on the TDI scandal in the US and Canada to $23 billion, well past the $19 billion it set aside at the beginning of the year.
Nonetheless, VW worked hard to get this deal ready before current administration left office with the swearing in of President-elect Trump on January 20.
In all, there are four settlements being agreed to here, including a plea agreement with the US Department of Justice. Along with the agreement, VW has agreed to plead guilty to three felony counts and a criminal fine of $2.8 billion. An independent monitor will also be appointed to VW, who will oversee the company for three years to ensure that the company is abiding by its enhanced ethics program.
Two more settlements, one to resolve environmental and customs-related claims, and the other to the Civil Division of the Department of Justice totaling $1.5 billion have also been agreed to, but VW is not pleading guilty to these claims. The automaker is instead settling to “avoid the uncertainty and expense of protracted litigation.”
“Volkswagen deeply regrets the behavior that gave rise to the diesel crisis,” says Matthias Muller, Volkswagen Group CEO. “The agreements that we have reached with the U.S. government reflect our determination to address misconduct that went against all of the values Volkswagen holds so dear. They are an important step forward for our company and all our employees.”
Although the agreements put VW over budget, as it were, the ultimate result could still be good.
“Although the settlement is higher than reports had indicated, we view the resolution as a positive catalyst for Volkswagen since it removes the final known major liability” analysts at Goldman Sachs, said in a report to clients, according to Automotive News.
Along with these agreements, though, came charges against five VW executives: Heinz-Jakob Neusser, Jens Hadler, Richard Dorenkamp, Bernd Gottweis, and Juergen Peter. Oliver Schmidt, meanwhile, was arrested in Florida last weekend.
Despite that, Muller indicated in a statement today that the company is ready to move forward.
“We have taken significant steps to strengthen accountability, enhance transparency and prevent something like this from happening again,” he said. “We are determined that Volkswagen will become an example of how a socially responsible company should act and lead in the years ahead – and we know that our success can never be divorced from the way we conduct ourselves.”
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