A recent 1 billion euro fine comes on top of Volkswagen’s $4.7 billion settlement with the U.S. government in connection to the Dieselgate scandal.
German prosecutors hit Volkswagen with a 1 billion euro (~$1.2 billion) fine, one of the highest ever imposed against a company in the country’s history. In doing so, the prosecutor’s office in Braunschweig, just outside Volkswagen’s headquarters in Wolfsburg, “ascertained a violation of supervisory duties”, according to a Reuters report. The latest fine comes after Volkswagen agreed to settle with U.S. authorities for $4.3 billion to settle outstanding civil and criminal offenses for installing emissions defeat devices in their diesel cars.
Between 2007 and 2015, the Braunschweig Prosecutor’s Office contends 10.7 million cars had these devices installed. More specifically, U.S. and Canadian-spec EA 288 and global EA 189 diesel engines were affected. The fine seeks to punish Volkswagen for its lack of oversight which failed to prevent “impermissible software functions” from being installed in their cars.
Volkswagen also issued its own statement: “Following thorough examination, Volkswagen AG accepted the fine and it will not lodge an appeal against it.” In accepting the fine, Volkswagen went on to state it accepts responsibility for the diesel crisis and considers the settlement a step toward overcoming the Dieselgate scandal.
The fine may bring criminal investigations in Europe to an end, but…
While the fine likely ends criminal investigations of regulatory offenses in Europe, it would not settle lawsuits lodged by Volkswagen’s shareholders. Evercore ISI, a reserach firm mentioned in the Reuters report, mentions that Volkswagen AG has already set aside 28.5 billion euros of provisions to deal with the crisis. However, Volkswagen didn’t include this fine in their provisions, so it will impact their bottom line.
What does this mean for the consumer? Volkswagen’s new CEO Herbert Diess stated the company needed to take further steps to restore consumer trust. German prosecutors in Munich also widened their probe into Audi CEO Rupert Stadler’s alleged fraud and false advertising related to the Dieselgate scandal.
Will this be the end of the major fines levied on Volkswagen? We’ll have to wait and see. Stay tuned to TFLcar.com for more updates! Subscribe to The Fast Lane Car and TFLnow for more news, views and real-world reviews.