In order to resolve its diesel emissions troubles and plans to plead guilty to criminal misconduct, Volkswagen AG confirmed that it has negotiated a $4.3 billion draft settlement with U.S. regulators.
As the automaker looks to restore its tarnished global brand, the guilty plea is part of the civil and criminal deal. Volkswagen’s diesel costs will exceed the nearly 18.2 billion euros ($19.2 billion) it has set aside to handle the problem with the addition of the fine, the company said.
A source familiar with matter said that VW is expected to plead guilty as part of the settlement as early as Wednesday. The plea deal will need the approval of a U.S. judge.
It believes the "settlement is intended to draw a line under all remaining U.S. related legal risk. This is good news", Evercore ISI said in a research note.
Since a change in administration could have delayed a final settlement for months if not longer VW had raced to get a deal done before President Barack Obama leaves office on Jan. 20.
"The most important news is that VW managed to come to an agreement that allows the company to move on from here. It’s a major relief that this doesn’t get dragged into the new U.S. administration," Evercore ISI said.
in order to cheat exhaust emissions tests and make them appear cleaner than they were on the road, VW admitted in September 2015 to installing secret software in hundreds of thousands of U.S. diesel cars. Similar software could have been installed in as many as 11 million vehicles worldwide.
Sources said that more executives may face charges and the Justice Department's investigation into individual misconduct would not end with the Justice Department settlement with VW.
VW faces unresolved lawsuits from U.S. investors and about 20 U.S. states and still must spend the next two years buying back or fixing dirty U.S. vehicles.
In contrast to cases against Toyota Motor Corp and General Motors Co, which were both accused of misleading regulators or consumers and paid fines of $1.2 billion and $900 million, respectively, filed against them by Justice Department which got into deferred prosecution agreements with them, they were not required to plead guilty while Volkswagen is expected to plead guilty.
Citing "various further factors", the impact of the U.S. settlement on 2016 group results cannot be quantified yet, VW warned in a financial disclosure. Compared with 6 percent in 2015, the group operating margin is expected to come in at the upper end of a 5 to 6 percent target range before one-off items, VW said in late October.
A profit warning after the VW news was issued separately, Porsche SE, the main shareholder of VW.
It is possible the net result may drop below the previously reported range of 1.4-2.4 billion euros, the settlement on U.S. criminal and civil fines will negatively affect Porsche SE’s results for 2016, the company said.
Volkswagen had previously offered to buy back nearly 500,000 polluting vehicles and agreed to spend up to $17.5 billion in the United States to resolve claims by U.S. regulators, owners and dealers.
Including chief executive Martin Winterkorn, much of the company's senior management departed following the scandal.
(Source:www.reuters.com)
As the automaker looks to restore its tarnished global brand, the guilty plea is part of the civil and criminal deal. Volkswagen’s diesel costs will exceed the nearly 18.2 billion euros ($19.2 billion) it has set aside to handle the problem with the addition of the fine, the company said.
A source familiar with matter said that VW is expected to plead guilty as part of the settlement as early as Wednesday. The plea deal will need the approval of a U.S. judge.
It believes the "settlement is intended to draw a line under all remaining U.S. related legal risk. This is good news", Evercore ISI said in a research note.
Since a change in administration could have delayed a final settlement for months if not longer VW had raced to get a deal done before President Barack Obama leaves office on Jan. 20.
"The most important news is that VW managed to come to an agreement that allows the company to move on from here. It’s a major relief that this doesn’t get dragged into the new U.S. administration," Evercore ISI said.
in order to cheat exhaust emissions tests and make them appear cleaner than they were on the road, VW admitted in September 2015 to installing secret software in hundreds of thousands of U.S. diesel cars. Similar software could have been installed in as many as 11 million vehicles worldwide.
Sources said that more executives may face charges and the Justice Department's investigation into individual misconduct would not end with the Justice Department settlement with VW.
VW faces unresolved lawsuits from U.S. investors and about 20 U.S. states and still must spend the next two years buying back or fixing dirty U.S. vehicles.
In contrast to cases against Toyota Motor Corp and General Motors Co, which were both accused of misleading regulators or consumers and paid fines of $1.2 billion and $900 million, respectively, filed against them by Justice Department which got into deferred prosecution agreements with them, they were not required to plead guilty while Volkswagen is expected to plead guilty.
Citing "various further factors", the impact of the U.S. settlement on 2016 group results cannot be quantified yet, VW warned in a financial disclosure. Compared with 6 percent in 2015, the group operating margin is expected to come in at the upper end of a 5 to 6 percent target range before one-off items, VW said in late October.
A profit warning after the VW news was issued separately, Porsche SE, the main shareholder of VW.
It is possible the net result may drop below the previously reported range of 1.4-2.4 billion euros, the settlement on U.S. criminal and civil fines will negatively affect Porsche SE’s results for 2016, the company said.
Volkswagen had previously offered to buy back nearly 500,000 polluting vehicles and agreed to spend up to $17.5 billion in the United States to resolve claims by U.S. regulators, owners and dealers.
Including chief executive Martin Winterkorn, much of the company's senior management departed following the scandal.
(Source:www.reuters.com)
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