- By David FrancisDavid Francis is a senior reporter for Foreign Policy, where he covers international finance. An award-winning journalist, David has reported from all over Europe, Nigeria, Kenya, Mexico, and Afghanistan on terrorism, national security, the geopolitics of energy, global economics, and the European financial crisis. His work has been published in outlets including the Christian Science Monitor, the Financial Times Deutschland, Slate, and SportsIllustrated.com.
Nearly a year after Volkswagen admitted it cheated to beat U.S. emissions tests, a federal judge has approved one of the largest settlements in U.S. history.
On Tuesday, Judge Charles Breyer of the U.S. District Court in San Francisco authorized a nearly $15 billion settlement between the German carmaker, the U.S. government, and California regulators. This sets into motion a massive program for VW to buy back cars, and will also kick off environmental remediation programs.
“The priority was to get the polluting cars off the road as soon as possible. The settlement does that,” Breyer said in his ruling. He added that even “under heightened scrutiny” which came from the vast scope of the scandal, and the attention it has gotten in both the United States and Europe, the deal is an appropriate finale for the car company’s far-reaching efforts to beat American emissions tests.
Since the scandal began last September, when Volkswagen admitted it had equipped some of its diesel cars with software that allowed them to beat emissions tests, Volkswagen has been under siege both from regulators and from Wall Street. Its stock price has fallen more than 20 percent. Sales have been down both in Europe and the United States. Germany’s reputation for quality manufacturing has also taken a hit. It is no longer the world’s strongest national brand, by some measures.
In a statement, the chief executive of Volkswagen Group of America Hinrich J. Woebcken said the settlement marks an “important milestone in our journey to making things right in the United States, and we appreciate the efforts of all parties involved in this process. Volkswagen is committed to ensuring that the program is now carried out as seamlessly as possible for our affected customers and has devoted significant resources and personnel to making their experience a positive one.”
About 475,000 Volkswagen owners in the United States can pick between a free fix, if a repair is found, or a buyback. Most of the settlement is earmarked for the repairs and buybacks; $2.7 billion will go toward environmental remediation and VW will pay an additional $2 billion in acknowledgement that it violated the emissions standards.
Tuesday’s settlement is not the end of the road. VW is still under criminal investigation by the Justice Department and law enforcement in Germany.
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