There are several facets of the long running Volkswagen diesel emissions cheating scandal that are happening just below the surface. First, the US Justice Department is trying to decide just how much a criminal fine it can levy against the German car maker without putting it out of business. Second, Audi and Bosch are getting drawn more deeply into the mess. And third, word is spreading in the German press that Martin Winterkorn, the man who replaced Ferdinand Piech as head of Volkswagen more than a year ago then suddenly departed the company after the scandal broke, may have been more deeply involved than he has admitted. Let’s take them in order.
First, the US Justice Department and Volkswagen are negotiating just how large a fine the company should pay to settle a criminal investigation against the company. According to Bloomberg, both sides want to wrap things up before the next president of the United States takes office in January. Business dislikes uncertainty and the prospect of having to deal with a new crop of government lawyers a few months from now is making Volkswagen anxious to get this phase of the scandal’s aftermath over with. Call it the “Better the devil I know than the devil I don’t know” strategy.
The Justice Department has broad authority to consider what effect its punitive power will have on the financial viability of any company it is dealing with. Volkswagen has already agreed to pay a record civil fine approaching $15 billion. Part of that agreement includes $2 billion to be used to improve electric car infrastructure, such as adding more charging stations. How ironic that a company that chose not to build an EV charging infrastructure for its customers the way Tesla has done should wind up paying for charging facilities its competitors can use.