Volkswagen AG (VW) on Friday took a big step toward resolving its legal problems in the US when it pleaded guilty to its vast emissions deception, but in Europe, its troubles might be just beginning.
Across Europe, the German carmaker faces not only an expanding criminal investigation, but also thousands of lawsuits from consumers demanding recourse.
An Irish nurse wants compensation for the plunging value of her Volkswagen diesel car, lawyers in London have filed the British version of a class-action suit and a German seafood supplier claims it was tricked into believing it was going “green” by shipping shrimp and cod to market in a fleet of Volkswagen “clean diesel” vehicles.
The lawsuits are a potentially costly unknown — since there are far more diesel car owners in Europe than in the US — adding to Volkswagen’s ballooning legal bill, which has weighed on profits and shaken management ranks.
The company formally pleaded guilty in a Detroit courtroom on Friday to US federal charges that included conspiracy to violate the Clean Air Act and obstruction of justice. Six executives have so far been charged in the US, and one engineer has pleaded guilty to conspiring to defraud regulators and car owners.
Separately, the fate of the executives’ cases is unclear, since five of the six people indicted are believed to be in Germany, which does not usually extradite its citizens outside of the EU.
Volkswagen agreed to pay US$4.3 billion in civil and criminal penalties in the case brought by the US Department of Justice. It was just a piece of the US$22 billion in settlements and fines in the US.
“Volkswagen deeply regrets the behavior that gave rise to the diesel crisis,” the company said in a statement. “The agreements that we have reached with the US government reflect our determination to address misconduct that went against all of the values Volkswagen holds so dear.”
Europe is now the big wild card that remains for Volkswagen. This week, consumer protection authorities from a group of EU countries agreed to join forces to put pressure on the company to compensate car owners.
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