Volkswagen is one step closer to resolving its long-running ‘dieselgate’ scandal, after recently pleading guilty in a US court. The car maker’s much publicised actions have resulted in a mountain of negative consumer opinion, costly vehicle recalls and billions in dollars of fines. 

Now the company has to wait to learn its fate, as the New York Times reports that the authorities could deliver a particularly harsh punishment to counter accusations that they were too lenient on financial institutions in the wake of the 2008 economic crisis.

Volkswagen’s troubles don’t end there, as the six company executives have been charged in and one engineer has pleaded guilty to conspiring to defraud car owners and regulators. What complicates matters for the US authorities is that five of the six executives are in Germany, a country that doesn’t usually extradite its citizens outside of the EU. 

Still, Volkswagen will be kept busy for a while as it’s already agreed to pay $4.3 billion in fines following a case brought by the US Justice Department. And that’s just a very small part of the $22 billion in penalties and settlements it’s on the hook for in the US alone. In comparison, General Motors was forced to pay just $2 billion for a faulty ignition switch scandal linked to the deaths of more than 100 individuals, while company executives escaped punishment. 

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Curiously Volkswagen’s plight in the US is far removed from its current status in Europe, where it’s steadfastly refused to engage in compensating owners in the same way it has its US customers.

In the UK, the car firm has made a very public point of insisting that its cars are legal, and that its recall programme is purely a run of the mill activity. There will be no cash compensation, and certainly no costly - to VW at least - vehicle buyback scheme. 

However, the legal challenges on this side of the pond are mounting, with individuals and groups lining up to challenge Volkswagen’s stance. And that could be a problem as there are far more diesel cars in Europe and the US, which could prove more costly if governments side with the consumer.

Source: New York Times