VW CEO Hopeful of Deal With U.S. Authorities By End of the Year

With regards to the size of a fine to settle a criminal investigation of the company’s alleged violations of U.S. clean air laws, Volkswagen is hopeful the German automaker can reach agreement by the end of the year with the U.S. government, its Chief Executive Matthias Mueller said on Wednesday.

Volkswagen could be allowed to repair certain 3.0 liter diesel engines that emit more pollutants than U.S. law allows as Mueller also sees “good progress” toward an agreement with U.S. regulators on the issue, he said on the sidelines of the Paris Motor Show.

Earlier this week, Volkswagen shares were sent into a tailspin over speculation that the U.S. Justice Department will demand a multibillion-dollar fine to settle a criminal investigation of the automaker’s use of illegal software to deceive U.S. environmental regulators.

“We have been in a constructive dialogue with authorities in Germany, in Europe and the U.S. for the past 12 months,” Mueller told reporters and added that “in the foreseeable future” he hopes to know the results of all the investigations.

A Justice Department spokesman declined to comment. Preliminary settlement talks about resolving a criminal probe into the automaker’s diesel emissions scandal were held between Volkswagen and the U.S. Justice Department, Reuters reported in August, citing two sources briefed on the matter. It is not clear when a settlement will be reached but the talks have continued in recent weeks.

A Volkswagen engineer said he will cooperate with the Justice Department investigation earlier this month and pleaded guilty to one count of conspiracy in connection with the diesel emissions cheating case.

To resolve civil litigation related to the emissions cheating, VW in June agreed to pay up to $16.5 billion. The company agreed to fund projects such as expanded electric vehicle charging networks and to buy back vehicles if they could not be repaired as required by U.S. and California regulators.

The size of potential additional fines is a cause of concern, Mueller said. “The settlement that we have … reached with the civil authorities isn’t cheap,” he said. “We have made provisions for everything that we believe we will have to face, including fines, environmental projects, compensation to the people … We will have to see if that’s enough or not.”

To pay for costs related to the global emissions cheating scandal, Volkswagen has set aside 17.8 billion euros ($20 billion). Government regulators in the EU and other markets around the world have also announced imposition of potential fines and civil litigation against the company.

The company faces more than a financial toll, Mueller said on Wednesday. “We gambled away the trust people had in us and now we have to see how to get it back. That will definitely take longer than it took to lose it.”

The company could continue to offer diesel models for the U.S. market and is not ready to abandon diesel technology, Mueller and Volkswagen global brand chief Herbert Diess said.

“At some point there will be a tipping point, where electric mobility will gain the upper hand. I don’t know when this will be. Maybe 2030 or 2035,” Mueller said.

(Adapted from Fortune)


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