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Science & Technology

Volkswagen Reaches $14.7 Billion Settlement In Emissions Cheating Scheme

ROBERT SIEGEL, HOST:

Volkswagen has agreed to pay more than $15 billion to compensate customers and to fix damage done to the environment. The company is making amends for deceiving customers and regulators about its diesel vehicles. It is the biggest judgment against an automaker ever. And as NPR's Sonari Glinton reports, it could be just the beginning of the pain for Volkswagen.

SONARI GLINTON, BYLINE: Volkswagen admitted in September that it cheated in a kind of unique way. The company programmed its diesel cars to know when they were being tested. When taking the test, they were clean, fun, highly efficient. But in the real world, they were putting out the same pollution as, say, a tractor trailer. Here's Eric Schneiderman, New York's attorney general.

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ERIC SCHNEIDERMAN: This is an unprecedented multi-year scheme to create multiple devices to commit fraud that involved decision making at every level of this huge, multinational conglomerate.

GLINTON: That's Schneiderman announcing a deal on behalf of a group of attorneys generals, lawyers and a slew of federal agencies.

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SCHNEIDERMAN: We will continue to seek penalties that are substantial enough to ensure that Volkswagen or any other car manufacturer will never again attempt this type of deception.

JAMES KOHM: This is the largest judgment by a long shot in the Federal Trade Commission's history.

GLINTON: James Kohm is a lawyer with the Federal Trade Commission.

KOHM: The largest consumer protection case ever. It's a massive deception and is unfortunately of historic proportion.

GLINTON: That money will go to buy back cars from consumers. Volkswagen still has to fix the vehicles if they're going to remain on the road, so whether a diesel owner gets rid of their car or keeps the vehicle, they will get a very big check from VW from $5,100 to $10,000. Now, that will cost the company $10 billion. And Kohm says this is not just to punish Volkswagen but to act as a deterrent.

KOHM: What we want other companies to know is that you will be caught and that it will be extremely expensive and that therefore you shouldn't engage in it in the first place because it's not worth the coin.

GLINTON: Now, the deterrent is very big. In addition, the company has to spend $5 billion on remediation - building charging stations, combating pollution and more. Mark Rechtin is with Consumer Reports. He says Volkswagen, in many ways, has made the right first step.

MARK RECHTIN: So when you look at something along the lines of Volkswagen actually stepping up and actually saying, yes, we lied to you consumers, yeah, you have to somewhat applaud them for doing that. But at the same time, you have to punish them for doing it in the first place. You can't necessarily allow a company to willfully disregard regulations in an effort to sell more cars.

GLINTON: Volkswagen has a long process ahead, but Rechtin says in terms of consumers, a lot is out of Volkswagen's hands.

RECHTIN: So they need to make this as seamless as possible. They need to be as cooperative as possible. The dealers really need to be onboard with this. You know, if Volkswagen makes all the right noises but then it falls apart at the dealer level, it's going to still leave a sour taste in consumers' mouths.

GLINTON: The VW scandal is far from over. Criminal investigations are still pending for the company on at least three continents, and that means more fines to come. And the costs are likely to grow and grow. Sonari Glinton, NPR News. Transcript provided by NPR, Copyright NPR.