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Volkswagen to pay $1B in settlement with US government

Volkswagen headquarters

Diesel related woes still continue for Volkswagen in the US. The German automaker and the US government have now come to a settlement for the civil claims against the automaker’s 3.0-litre diesel V6s.

Over 83,000 offending V6 TDI-powered models are reportedly on US roads.The settlement allows VW to recall over 75 per cent of the affected V6 diesels and bring them into compliance. The models using the V6 include newer VW Touaregs, Audi A6, A7, A8, Q5, and Q7s, and Porsche Cayennes built between 2013 and 2016.

According to the company, the recall will bring these so-called Generation Two engines up to emissions specs, provided the EPA and CARB okay the modifications. Should the regulators say no to VW’s tweaks, the company will buy back or terminate leases with affected owners.

As part of its agreement over the emissions-cheating V6s, Volkswagen will contribute US$225 million to the “environmental remediation trust” it established as part of its settlement over cheating 2.0-liter TDIs. VW is also on the hook for $25 million with CARB, bringing the total for the six-cylinder part of its emissions cheating scandal to around US$1billion.

In a separate incident, six Volkswagen executives have been indicted in emissions-cheating scandal. Five of the six executives are thought to be residing in Germany, according to the Department of Justice. The pursuit of executives by criminal prosecutors is a rare occurrence among big companies, whose top people almost never face jail time. In other recent scandals involving automakers such as GM and Toyota — in which safety defects led to deaths of drivers and passengers — the companies paid big fines but admitted no criminal wrongdoing and no executive actually spent time in prison.

Those indicted were Heinz-Jakob Neusser, 56, Jens Hadler, 50, Richard Dorenkamp, 68, Bernd Gottweis, 69, Oliver Schmidt, 48, and Jürgen Peter, 59, all of Germany. All of the accused have ties to Volkswagen’s engine development and quality assurance divisions, both in the US and Germany. It is alleged that they directed employees to develop and install technology to evade emissions testing and then falsely marketed the car engines as “clean diesel,” according to the DOJ.

Automan’s take

The Volkswagen settlement sends a message to other companies that illegal conduct can come with harsh penalties. Volkswagen is charged with conspiring to defraud the government and violate environmental regulations from May 2006 to November 2015 by installing devices in its diesel engine vehicles that obscure the amount of nitrogen oxide they spew into the air. Those devices and accompanying software allowed Volkswagen to evade regulators for years.

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