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Volkswagen Agrees To $14.7 Billion Settlement In Emissions Cheating Scandal


A federal judge has approved a nearly $15 billion settlement between the carmaker Volkswagen and the U.S. government and consumers. Just over a year ago, VW admitted it installed software on its diesel vehicles that cheated on emissions tests. The company says it will begin buying back vehicles from customers next month. And it will pay to offset pollution caused by its dirty cars. NPR's Sonari Glinton reports.

SONARI GLINTON, BYLINE: To understand Volkswagen's diesel settlement, you need to know that the company was intent on becoming the world's No. 1 car brand. One of the ways to do that - capture the American market with diesel. Karl Brauer is with Kelley Blue Book.

KARL BRAUER: Really the heart of his problem was an extremely demanding management, you know, team that wanted something that really wasn't possible. But the pressure to deliver was so high that those below them kind of felt they had to do something, even if it wasn't necessarily the right thing, to keep management happy.

JAMES KOHM: Well, the lesson is don't cheat, that (laughter) if you cheat, you'll be caught. And the cost will be significant.

GLINTON: James Kohm is the associate director of enforcement at the Federal Trade Commission. He says VW is not out of the woods. It still has to settle on its 3-liter diesels. The EPA is still suing for civil penalties under the Clean Air Act. There are still cases pending in Europe. And he says...

KOHM: So at the end of this process, it is hard to see how Volkswagen would have any incentive to repeat this process that has been disastrous for them.

GLINTON: Customers get the value of the car before the scandal was announced plus money for the hassle. The company also settled with dealers in the U.S. David Uhlmann is law professor at the University of Michigan. He notes the speed that VW has settled this case - just over a year.

DAVID UHLMANN: Volkswagen paid top dollar to resolve the consumer claims. But what they got by paying top dollar was the ability to start moving beyond this crisis.

GLINTON: And they need to get this behind them because it is such a competitive and fast-changing market.

LAURA MACCLEERY: We're absolutely on the brink of a major shift in how consumer products will work in general.

GLINTON: Laura MacCleery is with Consumer Union, the consumer advocacy group that started Consumer Reports. She says as products become more complex and cars start driving themselves, software matters.

MACCLEERY: Transparency around that is actually a matter of life and death. And so we need trust in auto makers and other product manufacturers now, more than ever. And we need to make sure that regulators aren't caught unawares or, you know, deceived.

GLINTON: And a shout-out to my high school English teacher Mr. Kizelevicus for teaching me about irony 'cause I'm pretty sure this is it. Remember at the top of this story, I said that VW wanted to be the No. 1 car company in the world? Well, Karl Brauer with Kelley Blue Book says this year, it likely will be.

BRAUER: You can have a major issue in the U.S. market. But if you've got success in a market like China, it more than counteracts it. And you still end up as a global leader in terms of automotive sales and revenue.

GLINTON: Volkswagen says it will begin buying back diesel vehicles in mid-November. It comes out with a new SUV on Thursday. Sonari Glinton, NPR News. Transcript provided by NPR, Copyright NPR.

Sonari Glinton
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.