Volkswagen reaches settlement with US over Dieselgate scandal

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On Thursday, Volkswagen announced a major deal to purchase or possibly fix half a million polluting diesel vehicles and set up environmental and consumer compensation funds.

Reuters reported that the settlement could cost Volkswagen at least $10 billion and will not likely end the Dieselgate scandal which started last September when the second largest automaker in the world admitted using sophisticated concealed software in its car to get away with exhaust emissions test. Despite the potentially crippling settlement price, the company's share rose to 6 percent on Thursday, after rising nearly 7 percent on Wednesday.

Volkswagen said that the settlement is an "important step" on the road to making things right. The car maker plans to pay their customers with full compensation and alleviate any impact on the environment from harmful diesel emissions.

According to The Wall Street Journal, the agreement would include an undisclosed payment to fund environmental remediation efforts related to the cars, which were installed with devices that allowed them to emit nitrogen oxides in excess of US vehicle standards. US Judge Charles Breyer added that other funds will directly proceed in promoting green automotive technology.

Volkswagen faces US Department of Justice fines as part of an expected civil settlement, an ongoing DOJ investigation that could lead to criminal charges. The Daily Globe said that the framework of the agreement was molded out by the German company with the DOJ, Federal Commission, US Environmental Protection Agency, and the State of California.

Robert Mueller, former director of the FBI, was appointed as the mediator by the court. The case is expected to settle more than 600 class suits in US courts. Judge Breyer expects that the issues of Justice Department fines and resolving the 3.0 liter engines will be addressed expeditiously.

General Motors and Toyota Motor Corp have been shaken by safety scandals in recent years as well. Nonetheless, giant automakers have shown resiliency once damaging scandals are settled.

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Volkswagen, US

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