The Cable

VW’s Labor Chief: U.S. Fines For Emissions Cheat Could Cost U.S. Jobs

A top Volkswagen official says U.S. fines for emissions cheat could lead to U.S. job losses.

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The U.S. Justice Department is suing Volkswagen for up to $46 billion for breaching American environmental laws‎. The German-based company is now warning this could have stark repercussions in the United States.

Speaking Tuesday at a meeting of 20,000 workers inside Volkswagen’s headquarters in Wolfsburg, Germany, top VW official Bernd Osterloh warned that the eventual size of the fine could force the iconic carmakers to cut jobs, on both side of the Atlantic. Settlement talks between the company and the United States are ongoing, with VW’s lawyer Robert Giuffra telling U.S. District Judge Charles Breyer last months that talks are “progressing.”

“Should the future viability of Volkswagen be endangered by an unprecedented financial penalty, this will have dramatic social consequences,” Osterloh said. ”We very much hope that the U.S. authorities also have an eye for this social and employment-political dimension.”

The remarks could could be interpreted as a clear message to Washington: back off, or prepare for layoffs.

Osterloh’s warning comes as voters in Michigan head to the polls Tuesday. Late last year, skilled-trades workers at Volkswagen’s lone U.S. assembly plant in Tennessee voted to join the United Auto Workers Union, headquartered in Detroit. The plant employs around 2,200 people; 162 agreed to join the union.

VW is Europe’s largest automaker. It employs around 600,000 people at around 120 factories worldwide, including 270,000 in Germany. So far, it’s only laid off 600 temporary workers in Germany.

Volkswagen’s leadership has promised to cooperate with the U.S. investigation into software that allowed its diesel vehicles to beat U.S. emissions tests, which impacts nearly 600,000 cars in the United States. Six months after the emissions cheat was revealed, the company has yet to offer a fix.

The scandal has already cost VW dearly, both financially and in terms of its once sky-high reputation as the standard-bearer of German industry. Before news of the U.S. Environmental Protection Agency investigation broke in September, its stock was trading at more than $162. It’s now offered at $112.30 — leading to $1.9 billion in losses during the third quarter of last year.

Photo Credit: Odd Anderson/Getty Images

David Francis was a senior reporter for Foreign Policy, where he covered international finance. @davidcfrancis

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