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Volkswagen Expected To Pay Billions To Settle Emissions Scandal


A settlement in the Volkswagen diesel scandal is expected today. VW has to pay up after admitting to deceiving regulators on emissions tests. The company promoted its diesel vehicles as clean. They were not. The company created software to disguise the fact that their so-called clean diesel vehicles are anything but. The payout for the cheat is historic - nearly $15 billion - making it by far the largest settlement in car history. NPR's Sonari Glinton has been covering the Volkswagen scandal and he joins us from Berkeley in California. Sonari, $15 billion seems like a lot of money, even for a car company. Break it down for us.

SONARI GLINTON, BYLINE: Well, according to my sources, Linda, that top line number is just shy of $15 billion with $10 billion going to customers in the form of buybacks. And VW will buy back your diesel or they'll fix it to make it compliant with the regulations. Now, it's been widely reported that VW will compensate drivers between $5,000 and $10,000 for their vehicle, and that's essentially for the deception. Now, the government gets nearly $5 billion, and that's for fines as well as environmental remediation. Part of that means that the company will have to invest in new technology.

WERTHEIMER: So what makes that dollar figure historic?

GLINTON: Well, to give you an idea, two years ago, Toyota paid $1.2 billion for not properly reporting complaints about sudden acceleration. Last year, General Motors paid $900 million to settle criminal charges related to its flawed ignition switch, which was tied to about 124 deaths. And safety advocates say that, you know, they want VW executives to go to jail. But $15 billion, which is 20 percent of VW's worth, you can call it what you want, but you can't call it a slap on the wrist. It's some major money for a company that size.

WERTHEIMER: So is this an existential crisis for the company? Could Volkswagen go under?

GLINTON: Well, not really. We're likely to see more fines from other regulators in Europe and elsewhere. But VW is selling cars in China, the most important market, and it's still dominating in Europe and many other places. Now, how this hurts is now VW doesn't have $15 billion to invest in, say, self-driving cars or the new technology to, you know, grab new, young customers.

WERTHEIMER: So with this settlement, does this put an end to Volkswagen's diesel scandal?

GLINTON: Well, there are still criminal investigations, not just here but in Germany and elsewhere. And there are still attorneys general around the country who want to take a bite of Volkswagen. Though, I'm mindful that Toyota had one of its best years after it got caught up in the sudden acceleration scandal.

WERTHEIMER: Sonari, when will the cars be fixed, assuming they can be fixed?

WERTHEIMER: Well, we don't really know for sure. And that's the funny part of this whole thing is that when VW cheated, if they knew how to make them clean they would have done it in the first place. So there's a lot of energy and a lot of time spent on making a fix that customers will accept. Also all these papers that have to be filed today, they have to be approved by a judge. And after all is said and done, diesel owners won't get their checks or their cars fixed probably until late in the fall.

WERTHEIMER: NPR's Sonari Glinton reporting from California. Sonari, thank you very much.

GLINTON: Always a pleasure. Transcript provided by NPR, Copyright NPR.

Sonari Glinton is a NPR Business Desk Correspondent based at our NPR West bureau. He covers the auto industry, consumer goods, and consumer behavior, as well as marketing and advertising for NPR and Planet Money.