Volkswagen AG agrees to pay $4.3bn penalty

Volkswagen AG took a major step toward resolving one of the darkest chapters in its history yesterday, pleading guilty in the US to an emissions-cheating scandal and agreeing to pay $4.3bn (€4bn) in penalties, while prosecutors announced charges against five individuals in Germany.

VW admitted to using false statements to import cars to the US and obstructing investigations when authorities grew suspicious of the emissions levels from the diesel engines.

Among the executives charged with conspiracy were Heinz-Jakob Neusser, who was suspended in 2015, Jens Hadler and Richard Dorenkamp.

The emissions cheating undermined the sterling reputation of German engineering and threatened the viability of a company that vies with Toyota Motor Corp. as the world’s biggest carmaker.

Volkswagen pressed to resolve investigations and lawsuits as quickly as possible, while working to repair its reputation with car buyers and dealers.

It’s now selling more cars and trucks then ever, offsetting declines in the U.S. with strong sales in China.

The company and its executives are still under investigation in Germany and it faces investor lawsuits in the U.S. and at home.

“Volkswagen deeply regrets the behaviour that gave rise to the diesel crisis,” chief executive Matthias Mueller said.

“We will continue to press forward with changes to our way of thinking and working.”

Neusser was head of engine development and a member of the VW brand’s management board. Lawyers for him and Dorenkamp didn’t immediate respond to requests for comment. Representatives for the other men couldn’t immediately be reached.

A total of seven men have been charged so far, with one US-based engineer pleading guilty in September and cooperating in the probe.

Over the weekend, Oliver Schmidt, VW’s liaison with US environmental regulators, was arrested in Miami as he was returning to Germany from vacation.

Germany doesn’t extradite its nationals to the US and Attorney General Loretta Lynch said at a press conference in Washington yesterday that it’s “too early” to say how it would handle prosecutions for individuals there.

VW admitted in 2015 that about 11m diesel cars worldwide were outfitted with so-called defeat devices, embedded algorithms used to game emissions tests.

The settlement pushes the cost of the scandal to more than $23bn in the US and Canada and will force the company to increase the money set aside to pay fines and compensate affected customers.

Bloomberg