VW working on U.S. deal after report of wrongdoing

Elisabeth Behrmann
Bloomberg News

Volkswagen AG said it’s working to reach a final settlement with the Department of Justice and other U.S. regulators over its diesel-emissions cheating scandal following a report that investigators had found evidence of criminal wrongdoing.

“Our discussions are continuing toward a resolution of remaining issues,” the German company said Tuesday in an emailed statement.

Negotiations between the U.S. and Volkswagen are expected to result in significant financial penalties after Justice Department officials found the evidence in its probe of emissions-test cheating by the carmaker, the Wall Street Journal reported, citing people familiar with the talks. The figure could exceed a $1.2 billion penalty levied against Toyota Motor Corp., the newspaper said. The negotiations could conclude before the end of the year, it said.

Volkswagen declined to comment on the report that prosecutors uncovered evidence of wrongdoing. The carmaker, which has set aside 18 billion euros ($20 billion) to cover worldwide costs related to the scandal, reached an agreement with U.S. authorities in July that will cost it as much as $15.3 billion in potential buybacks or possible fixes for affected models.

Volkswagen fell 1.9 percent to 124.32 euros ($140) in Frankfurt trading on Tuesday, extending the stock’s decline this year to 6.9 percent.

The settlement reached in July didn’t absolve the carmaker of possible criminal findings, and it’s also facing regulatory challenges in its home country and elsewhere.

Earlier this month, South Korea blocked sales of 80 VW models and fined the company 17.8 billion won ($16 million) because the carmaker fabricated documents related to emissions and noise-level tests.

The German state of Bavaria, where VW’s Audi brand is based, announced plans to sue for as much as 700,000 euros ($790,000) over losses at a state pension fund that owns the automaker’s stock.