Volkswagen has indicated it will plead guilty to criminal misconduct and pay $4.3 billion in fines as part of a settlement of a U.S. investigation of its cheating of exhaust emission tests.
The automaker said Tuesday it was in “advanced discussions” with the Department of Justice and U.S. Customs and Border Protection and it had negotiated a settlement that included the guilty plea and fines.
The agreement would mark another step in VW’s effort to extricate itself from the diesel emission cheating scandal. It has admitted installing “cheat devices” on diesel-powered cars from 2009 through 2015 that allowed the vehicles’ engines to emit less pollutants during emissions tests than during normal road use.
According to The Washington Post, the guilty plea would be a rare admission of criminal wrongdoing by a major company.
“VW’s admission of guilt struck analysts as both a sign of the strength of the government’s case and the fastest route for an automaker trying to escape damaging headlines that have poured out for more than a year, since the scandal broke,” the Post reported.
VW previously agreed to a $14.7 billion settlement with 475,000 vehicle owners, the largest-ever reached with an automaker accused of misconduct. It said with the addition of the $4.3 billion fine, the costs of the scandal will exceed the nearly 18.2 billion euros ($19.2 billion) it had set aside to handle the problem.
The settlement with U.S. authorities “is intended to draw a line under all remaining U.S.-related legal risk. This is good news,” Evercore ISI said in a research note.
As Reuters reports, VW had raced to get a deal done before President Barack Obama leaves office on Jan. 20. A change in administration could have delayed a final settlement for months if not longer.
Much of VW’s senior management, including chief executive Martin Winterkorn, departed following the scandal. On Monday, a VW executive, Oliver Schmidt, was charged with conspiracy to defraud the U.S. over the emissions cheating and the automaker was accused of concealing the cheating from regulators.