Volkswagen agrees to pay record $14.7billion settlement over Diesel emissions cheating.

Volkswagen has agreed to pay a record $14.7 billion as settlement over emissions cheating and that's just the beginning as they could pay more , court documents have revealed..

The automobile company Volkswagen AG agreed to pay up to $14.7 billion to settle emissions-cheating claims with regulators and owners of nearly 500,000 diesel-powered vehicles, a step toward resolving a major portion of a crisis that sparked litigation and investigations across the globe and cost the company chief executive his job.

Volkswagen reached the civil settlement, the largest-ever for a car production company, with the U.S. Justice Department, Environmental Protection Agency, Federal Trade Commission, California regulators, and consumer plaintiffs’ lawyers. The settlement doesn’t include other possible civil or criminal financial penalties that could later be levied by the Justice Department.

The total payout, detailed in hundreds of pages of settlement documents filed on Tuesday in a San Francisco federal court, includes up to $10.03 billion for owners of affected vehicles with two-liter diesel engines. Volkswagen will also pay $2.7 billion for an environmental remediation fund, and $2 billion to be invested in promoting so-called zero-emission vehicle technology, court documents have revealed.

The settlement is only a preliminary step in the case; the automaker still faces possible criminal charges, as well as civil penalties for Clean Air Act violations.

 The Department of Justice is investigating possible criminal charges against both the company and individuals, said Deputy Attorney General Sally Yates.

Volkswagen's wrongdoing constituted "the most flagrant violations of our consumer and environmental laws in our country's history," said Yates. "We cannot undo the damage that's been done to our air quality but we can offset that damage."

Up to $10 billion of the funds will be paid out to owners of the 500,000 affected diesel cars in the U.S.

 

Car owners will get a cash payment of between $5,100 and $10,000 to compensate them for the lost value of the cars, as well as for Volkswagen's deception in promising that they were buying a "clean diesel." Most of the buyers paid extra for a car with a diesel engine.

Volkswagen also will either repurchase or fix the 487,000 U.S. cars sold under the VW or luxury Audi brands, depending on what the owners want. Owners will have until May 2018 to decide.

“We know that we still have a great deal of work to do to earn back the trust of the American people,” Volkswagen Chief Executive Matthias Müller said. “We are focused on resolving the outstanding issues and building a better company that can shape the future of integrated, sustainable mobility for our customers.”

Source: CNN/ Reuters/ Wall Street Journal