Volkswagen settles in multi-billion deal

When it comes to repairing a damaged reputation, Volkswagen has a long road ahead.

Volkswagen executives are starting to learn the extent of their punishment for the emissions testing scandal that recently rocked the auto industry.

In a record settlement that marks the beginning of the company’s woes, it will pay an estimated $14.7 billion to buy back the diesel cars that were designed to cheat emissions tests or to compensate those who elect to have theirs fixed.

Deputy Attorney General, Sally Yates called it:

The most flagrant violations of our consumer and environmental laws in our country's history. We cannot undo the damage that's been done to our air quality, but we can offset that damage.

There isn’t a quick fix for the affected cars, whose software detects when an emissions test is taking place and changes the car’s output.

Owners of those vehicles who want their cars fixed (assuming that a fix is eventually approved) can expect compensation between $5,100 and $10,000. Buybacks will cost Volkswagen between $12,500 and $44,000.

"We're getting VW's polluting vehicles off the road and we're reducing harmful pollution in our air, pollution that you never should have been emitted in the first place," EPA Administrator Gina McCarthy said at a press conference.

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Volkswagen will also have to pay $2.7 billion to support environmental cleanup and another $2 billion toward zero-emission cars.

"We take our commitment to make things right very seriously and believe these agreements are a significant step forward," VW chief, Matthias Müller said in a statement. "We know that we still have a great deal of work to do to earn back the trust of the American people. We are focused on resolving the outstanding issues and building a better company that can shape the future of integrated, sustainable mobility for our customers."

The settlement requires Volkswagen to ensure that 85 percent of the cars in question are fixed or off the road by July 2019.

This isn’t the end of VW’s trouble. The company (and individuals) could still face criminal charges and civil penalties for violating the Clean Air Act.

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