Its reputation in tatters, Volkswagen is seeking to move past its lies by paying $14.7 billion in a nationwide settlement of civil claims over defeat devices it installed so its dirty diesel-powered cars would pass smog tests.
Attorney General Kamala Harris and California Air Resources Board chairwoman Mary Nichols held a news conference Tuesday and rightly took credit for helping to force the world’s largest automaker to disgorge some of its ill-gotten gains.
The settlement involves cases brought by the U.S. Department of Justice and other states. It’s fitting that California receive an outsized share of the proceeds, $1.18 billion. VW went to great lengths to evade California’s emission’s laws, and California air board engineers unraveled the deception, after the nonprofit International Council on Clean Transportation discovered irregularities in VW emissions.
The settlement, which must be approved by U.S. District Judge Charles Breyer of San Francisco, should serve as a warning to other auto manufacturers that might be tempted to skirt clean air laws. No one should underestimate the deterrent value of a $14.7 billion settlement, Harris noted.
However, VW pointed out in its news release that the “agreements announced today are not an admission of liability by Volkswagen.” That is beyond insulting. Officials clearly thought deeply about settlement details but should have insisted that the company directly own up to its deceit.
A criminal investigation continues. Such deception could not have taken place without knowledge of key personnel at VW.
California leads the nation in the fight against climate change by reducing greenhouse gas emissions. Diesel exhaust poses a more immediate threat by damaging lungs and causing cancer.
A similar cheating scandal occurred in the 1990s when seven diesel truck manufacturers paid $1 billion after being found to have installed defeat devices that allowed them to evade clean air standards. Regulators clearly must remain vigilant.
The Volkswagen settlement includes $10 billion to buy back, modify or scrap 475,000 diesel-powered Beetles, Golfs, Jettas, Passats and Audi A3s sold through 2015, including 87,000 sold in California. Individual VW owners stand to receive as much as $10,000.
The other $4.7 billion in settlement payments could have more far-reaching implications. Volkswagen promises to spend $2.7 billion on programs to reduce emissions, including $380 million in California.
The company committed another $2 billion over 10 years to develop, market and charge zero-emission vehicles. Of that, 40 percent, or $80 million a year, must be spent in California.
Over time, the payments could bring about important innovations that will lead to cleaner air here and across the country. Whether VW’s payments restore its reputation is another question.