Former executives, including CEO Martin Winterkorn, will have to pay VW $351 million in damages over the Dieselgate scandal.
The memories and repercussions of the Dieselgate scandal have been haunting Volkswagen and its subsidiaries for a long time now. However, after tarnishing VW’s reputation and reliability considerably, the Dieselgate scandal is far from being over. Also termed as the “diesel dupe,” the September 2015 incident found Volkswagen guilty of cheating in the emission tests, courtesy of the Environment Protection Agency.
Finally, after years of deliberation and proceedings, Volkswagen has something to cheer about, following an agreement with the former CEO and other former top executives.
In 2015, the EPA accused VW of lying in the emission tests of its cars to overcome the United States’ stringent pollution laws regarding diesel vehicles. The EPA had found out that many of Volkswagen’s diesel models featured a “defeat device.” Specifically, the software could detect when a vehicle was tested, decreasing the power and torque to improve emission results.
VW has confessed that it had indeed resorted to these unethical means to push the sale of diesel cars in the US. But, unfortunately, it had also admitted to equipping more than 11 million cars worldwide (such as the Audi A3, VW Jetta, Beetle, Golf, and Passat) with this trickery.
The results were expectedly disastrous. Engines started emitting 30 to 40 times more pollutants than the maximum allowable limit. As a result, the German marque had to recall millions of cars worldwide. Moreover, top executives had reportedly said that the company had “screwed up” and the priority would be to regain the customer’s trust.
At that time, the group’s chief executive, Martin Winterkorn, had resigned as a direct outcome of the Dieselgate scandal, relinquishing this chair to Mr. Matthias Mueller. It was a financial catastrophe for Volkswagen who had to dish out almost $40 billion in the form of fines, court fees, and settlements.
However, it’s payback time now. The main people behind the scandal have agreed to pay Volkswagen to compensate for their involvement in Dieselgate. Ex CEO Mr. Winterkorn has agreed to pay $13.6 million, while former Audi boss Rupert Stadler would cough up $5 million.
In addition, VW’s former head engineer Wolfgang Hatz and Audi’s ex-development head would dish out $1.2 million and $1.84 million respectively as compensation. And finally, Volkswagen would carve out some $330 million from its directors’ and officers’ (D&O’s) liability insurances. Overall, the total amount is almost $351 million, which is still nothing compared to the $40 billion that Volkswagen had to shell out.
Nonetheless, it was good seeing former “important” people taking responsibility for their actions.
