Commentary

Volkswagen Reaches Another Settlement In U.S.; More To Come

Umpteen billion here; another billion there. That’s how it’s going at Volkswagen these days as the German automaker agreed yesterday to recall 63,000 model year 2013 to 2016 vehicles; buy back, modify or terminate the leases of 20,000 model year 2009 to 2012 vehicles, and fund projects focused on reducing nitrogen oxide emissions to the tune of $225 million.

“The agreement … is another important step forward in our efforts to make things right for our customers …,” said Hinrich J. Woebcken, president and CEO of Volkswagen Group of America in a news release. “We are committed to earning back the trust of all our stakeholders and thank our customers and dealers in the United States for their patience as the process moves forward.”

And what a process it must be: The statement reveals that the agreement is “with the United States Department of Justice (DOJ) on behalf of the Environmental Protection Agency (EPA) and the State of California, by and through the California Air Resources Board (CARB) and the California Attorney General.”

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U.S. District Judge Charles Breyer in San Francisco announced the settlement in San Francisco.

“The agreement addresses vehicles that were not included in Volkswagen’s agreement in June …,” reports Hiroko Tabuchi for the New York Times. “Some details were still being worked out on Tuesday by the parties [involved].”

“This settlement is about taking pollution out of the air we breathe,” said Cynthia Giles, the EPA’s assistant administrator for enforcement and compliance assurance, Tabuchi reports. “It’s also about showing what a strong EPA enforcement presence means for those who may break the law.” 

So far, a lot of restitution and fines if they’re caught.

“Breyer in October approved VW's earlier settlement worth about $15 billion with regulators and the U.S. owners of 475,000 polluting diesel vehicles with smaller 2.0-liter engines, including an offer to buy back all of the cars,” Automotive News’ David Shepardson reminds us. “Breyer on Tuesday also said German engineering company Robert Bosch GmbH, which produced the software for the VW diesels, has agreed in principle to settle civil allegations made by U.S. diesel vehicle owners. The company confirmed it had reached the agreement, but declined to discuss specifics.”

On Monday, Canada’s Competition Bureau, its antitrust watchdog, said it “reached a 2.1-billion-Canadian-dollar ($1.57 billion) class-action settlement to resolve Canadian claims about ‘false and misleading’ marketing from the company about its diesel-engine emissions,” Paul Viera writes for the Wall Street Journal. “If the settlement agreement is approved by the courts, it would provide restitution to owners of roughly 105,000 vehicles, it said.”

“Consumers expect and deserve truth in advertising, particularly when it relates to such a significant investment,” said John Pecman, the commissioner of the bureau, which, indeed, exists to “promote truth in advertising in the marketplace by discouraging deceptive business practices. …”

There’s more to come, it appears.

Yesterday’s “deal covered luxury VW, Audi and Porsche vehicles with 3.0-liter engines, meaning Volkswagen has now agreed to spend as much as $17.5 billion in the United States to resolve claims from owners as well as federal and state regulators over polluting diesel vehicles,” writes Reuters’ David Shepardson. 

“The world's No. 2 automaker still faces the possibility of spending billions of dollars more to resolve a U.S. Justice Department criminal investigation and federal and state environmental claims, as well as oversight by a federal monitor.”

An additional $25 million will be given to California to promote environmentally friendly cars and Volkswagen agreed to introduce several electric models in the state, Nathan Bomey reports for USA Today.

“This settlement highlights the fact that cheating to get a car certified has consequences for air quality and the public’s health — and that cheaters will be caught and held accountable,” California Air Resources Board executive officer Richard Corey said in a statement, Bomey reports. “The mitigation in this settlement will now help California address its serious air quality and climate challenges with a focus on putting the very cleanest vehicles in disadvantaged communities where they are needed most.”

The criminal investigation by the Justice Dept. meanwhile, “continues.”

2 comments about "Volkswagen Reaches Another Settlement In U.S.; More To Come".
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  1. John Parikhal from joint communications, December 21, 2016 at 8:35 a.m.

    I assume all this stops when the new head of the EPA dismantles the department? This is not a political statement. Merely an observation based on the clearly and repeatedly stated positions of the president-elect and the person he has chosen to do this job. It might even mean that eventually Volkswagen can put the "recalled" and "re-bought" cars back on the market. Is this possible?

  2. Paula Lynn from Who Else Unlimited, December 21, 2016 at 9:55 a.m.

    So worried about VW to make people whole for such a significant investment, so what about all the financiers who through people under the bus (vs car) via mortgages, etc. ? Their fines were a measley few million if any, not billions which it should have been and still should...oh wait, some of them are now government officials beginning 1/20. Gag us with a spoon.

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