By: Luke Jones, Published on June 29, 2016 11:45 AM, Last Update on June 28, 2016 02:46 PM
Volkswagen announced on Tuesday that it has all but finalized its settlement agreements in the United States regarding the emissions scandal that rocked the automotive industry and the company. The German carmaker says it has agreed a settlement with 44 states, numerous government agencies, and private sector representatives in what will amount to more than $14 billion in payments.
The emissions scandal made headlines last year when it was found that millions of VW vehicles were not pushing out the emissions the company claimed. Volkswagen had included software in diesel engines that allowed them to fool regulators into thinking they were in regulated emission limits. The opposite was true and many of the vehicles were beyond accepted limits.
VW was rocked by the scandal, of proportions that could still crumble the company. While $14 billion is a hefty settlement, it is easily within the company’s ability to pay. So, did VW get off lightly? Possibly, but it is worth noting that this is just a settlement in the US, the company faces similar legal wrangling in other nations, Canada included.
“We take our commitment to make things right very seriously and believe these agreements are a significant step forward,” said Matthias Müller, chief executive officer of Volkswagen AG, in the statement. “We appreciate the constructive engagement of all the parties, and are very grateful to our customers for their continued patience as the settlement approval process moves ahead. We know that we still have a great deal of work to do to earn back the trust of the American people. We are focused on resolving the outstanding issues and building a better company that can shape the future of integrated, sustainable mobility for our customers.”
If those settlements also number in the billions, which is likely, Volkswagen will be facing a very large settlement bill overall. The company forecast an overall global expenditure of $17 billion, and while VW says the US settlement is within its limits, it is unlikely that all settlements will fall under the prediction. However, the company admitted that settlements will take a toll on the business.
“Today’s announcement is within the scope of our provisions and other financial liabilities that we have already disclosed, and we are in a position to manage the consequences. Settlements of this magnitude are clearly a very significant burden for our business,” noted Frank Witter, CEO of Volkswagen AG, in the statement.