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VW Faces Tuesday Deadline For Diesel Emissions Settlement


A judge gave Volkswagen a deadline of this week. It's a deadline to work out a plan to make up for Volkswagen's deception. VW admitted last year, you'll recall, that it cheated on emissions tests, installing devices that let cars test clean while actually running dirty. NPR's Sonari Glinton reports on the price the company will pay.

SONARI GLINTON, BYLINE: It seems like Volkswagen is kind of in trouble with everyone - The Justice Department, the Environmental Protection Agency, the Federal Trade Commission, the California attorney general, the California Air Resources Board - and those are just some of the governmental bodies.

MATT WELCH: You know, they - they broke the trust of the American public. And you can't do that.

GLINTON: Matt Welch runs Auburn Volkswagen, a dealership just south of Seattle. He says one of the things that makes fixing the diesels tough is that they weren't really lemons in the first place.

WELCH: And the people just - that have them - just love them. Once they get one, they're so loyal. They just love them, so to have this happen was - so 30 percent of our business is new diesels. It's been a very difficult thing for the last nine months.

GLINTON: Volkswagen has set aside $10 billion to buy back cars, compensate owners and address the pollution caused, according to various news reports. Customers will potentially get thousands of dollars, whether they decide to sell their cars back or not. Fixes to the diesel cars are expected to affect vehicle performance, though no details of the fix are available yet.

WELCH: Because right now, a lot of customers think that, if they brought their car to us, we're going to do something to their car. Well, there's nothing to do to it because the recall hasn't been announced. We don't even know what it is or what the fix is.

GLINTON: So how ready are Welch and his fellow dealers to get beyond this?

WELCH: We are so ready. You know, this happened in week two of the NFL season last year. To have this be in the news all the time - so ready to - to let our customers know the information.

GLINTON: VW's crisis doesn't really pose an existential threat. Even though the company is one of the biggest in the world, in America, it's an also-ran.

REBECCA LINDLAND: The attitude that's constrained their growth in the U.S. has also led to the situation they find themselves in with this diesel crisis.

GLINTON: Rebecca Lindland with Kelley Blue Book says Volkswagen's diesel scandal is a sign of a much bigger problem.

LINDLAND: It's an attitude of, we know best. That's kind of what led to these decisions being made - these poor decisions. And that kind of culture of at any cost and don't tell me how you got there, just get there - that comes at a cost as well.

GLINTON: Meanwhile, Clarence Ditlow with the Center for Automotive Safety (ph) says, when you look at the auto industry, there is this underlying philosophy that there is no problem too big that money can't solve.

CLARENCE DITLOW: So when they're caught with flagrant violation of law, they take out their checkbook and say to the Justice Department, how big a check do you want us to write to get out of this mess?

GLINTON: Members of Congress have called upon the Justice Department to keep up their investigation. But Ditlow says billion-dollar fines - even multi-billion-dollar fines - are not enough.

DITLOW: The only thing that will really change corporate behavior in the auto industry is sending responsible executives to jail, imposing criminal penalties, not letting them write checks.

GLINTON: Volkswagen must propose its settlement by tomorrow, with recalls, buybacks and incentives expected to come in the late summer and fall. Sonari Glinton, NPR News, San Francisco. Transcript provided by NPR, Copyright NPR.

Sonari Glinton is a NPR Business Desk Correspondent based at our NPR West bureau. He covers the auto industry, consumer goods, and consumer behavior, as well as marketing and advertising for NPR and Planet Money.

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