$15 Billion Settlement Proposed In Volkswagen Emissions Scandal | KERA News

$15 Billion Settlement Proposed In Volkswagen Emissions Scandal

Jun 28, 2016
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LINDA WERTHEIMER, HOST:

The U.S. government, today, announced a broad-reaching $14.7 billion settlement in the Vokswagen emissions cheating scandal. EPA Administrator Gina McCarthy outlined the heart of the agreement during a news conference this morning.

(SOUNDBITE OF PRESS CONFERENCE)

GINA MCCARTHY: VW will get its polluting cars off the road. Using the Clean Air Act, EPA has secured every consumer the choice of having VW buy back their car or their lease or modifying their car at no cost, if and when a modification to reduce emissions is approved.

WERTHEIMER: NPR's John Ydstie has been following this story. He joins us now. John, Gina McCarthy says the centerpiece says VW will buy back or fix these polluting cars. How many cars are we talking about? How much will the owners get?

JOHN YDSTIE, BYLINE: Well, the owners will get, in total, about $10 billion of this settlement dedicated to this part of the deal. It will involve 475,000 2-liter diesel cars, whose engines were fitted with this software allowing them to cheat on emissions tests. The owners of these cars will be able to decide whether to sell them back to Volkswagen or have the company fix them. Volkswagen has agreed to buy them back at the pre-scandal price, the price...

WERTHEIMER: That would be, like, up to $40,000, as I understand it.

YDSTIE: It could be - if a car was brand new. But the price would be the mid-September price last year. In addition to that payment for the car, VW will pay additional compensation to owners totaling between $5,100 and $10,000, depending on how old the car is. And the cars involved are model years 2009 to 2015. Owners who want their car fixed will get the same amount of additional compensation. Now, this deal does not include the VW vehicles with 3-liter diesel engines involved in the scandal, including VW, Audi Porsche SUVs. That deal's still being worked out.

WERTHEIMER: So that's $10 billion of this settlement. That's what it would be used for. What about the other 4.7 billion?

YDSTIE: Well, 2.7 billion would go toward remediating the pollution that these VW cars spewed into the atmosphere over the years. EPA Administrator Gina McCarthy says it's the largest single program to remediate air pollution in EPA history. My understanding is that states will be able to apply for grants to use this money for specific programs that they develop. The other $2 billion will go toward promoting the use of zero-emissions vehicles, like electric cars, both development of those cars and public relations campaigns promoting them.

WERTHEIMER: What about holding executives responsible? Does anybody go to jail?

YDSTIE: Not as a result of this settlement. However, there are investigations underway in Germany and the U.S. that could end up in criminal charges against both executives and the company.

WERTHEIMER: Huge fine - could it put Volkswagen out of business?

YDSTIE: Most analysts would say no. VW is a huge, global company. The U.S. is actually a very small market for it. There's no question its brand will suffer. But I think we'll see how it goes over time.

WERTHEIMER: Thanks very much, John. John Ydstie is following this story for NPR News. Transcript provided by NPR, Copyright NPR.