Bloomberg's Ambrosio on VW Settling Cheating Claims (Audio)

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fell two point seven percent. Shares Word downgraded to neutral over at JP Morgan after the bell Tonight look for earnings from Nike. Estimates are four forty eight cents on revenues of eight point to eight billion. Live from the First and Breagan News desk on Bill Maloney, Katherine, thank you, billan to hear live breaking news over your Bloomberg type squ a k on your terminal. West Texas Intermediate crude oil is up a dollar forty eight of barrel three

point two percent to forty one. Spockle down nine dollars fifty cents announced at thirteen fifteen twenty and the ten year treasury down five thirty seconds with the yield of one point four five percent. And that's a Bloomberg business flash you're listening to taking stock with Pim Fox and Kathleen Hayes on Bloomberg Radio. Fourteen point seven billion dollars. That's what v W has agreed to pay to settle

its claims from the emissions cheating scandal. It's one of the nation's largest consumer class action settlements on record, and in fact it is the largest ever paid by an auto company. Joining US now is Patrick Ambrosio. He's environmental reporter for Bloomberg b n A. He joins US now from b NA headquarters in Alexandria, Virginia, the Washington d C. Metro area. He was over across the river looking at and listening to some very important testimony today. Patrick, thank

you for joining us. Yeah, thanks for having me. So you were at the Department of Justice as press conference. You're sitting on a call with plaintiffs attorneys. First of all, tell us a little bit more about the settlement. I understand that a big chunk of this money is going to be used to buy back cars with the with the diesel engines. Uh, buying back from the customers. I guess I'd be pretty lucky in a sense if I owned one. Yeah, that is a significant portion of that

big fourteen point seven billion number. Today, About ten billion of that is going to go to consumers. Uh. The consumers will have options. There's going to be a buy back option that should start later this year. Uh. It's how much you're gonna get it brought back for. It is going to depend on the model. Uh. It could range anywhere from twelve thousand, five hundred for some of the older vehicles to as much as forty four thousand for for some of the more recent vehicles. UH. It's

there's also the still the potential for a fix. UH, Folkswagan has been looking for a way to bring these vehicles into compliance with the emission standards. They haven't gotten it approved, but if they do get one approved, UH, sometime in the near future, consumers will be able to get it to proved for get it fixed for free, and get a payment on top of that to cover

any any sort of issue that they may have. So what kind of things did you hear to at a press conference today and on this call a plane if attorneys? What what is being said? What's the mood? What's the sense of where this goes next? Uh? Well, the mood uh for the class action of planets for the people that bought the cars that they were saying, you know, this is this is what we wanted. We wanted substantial compensation for the people who bought these cars and didn't

get what they paid for the buyback option. That was something that was really pushed for because there were a lot of people who are not happy Uh, there were a lot of environmentally conscious consumers who bought these cars because they were marketed as being you know, clean diesel, they're better for the environment. People bought them and then only to find out they were allied to and they're

actually significantly worse than they thought. On the government side, Uh, it was you know, it's it's obviously a historic settlement, but you know it's been described by Justice farming officials. This is only the first step. This only solved some of the problems. There's still a lot more on the table, including possible criminal charges as well as of all, penalties aren't addressed on this soil. Volkswagen could end up paying

a lot more than that fifteen billion. Give us a sense of how that might add up and who will they pay it to. I understand a significant civil penalties from the federal government. This is something you have been analyzing in your Bloomberg Intelligence research. But could it be another fifteen billion? Would it be five hundred million? Where does this how does this potentially stack up? Yeah, you know, it's that's something they were very moment today. They said,

we're still in the discovery phase. Uh. They got more than one point five million documents from Volkswagen that they're analyzing. UH, and and this settlement really doesn't affect any of those allegations that the civil penalties would be for violating the Clean Air Act, the environmental law that they violated when they sold these cars. UH. It's significant penalties are on

the table. UH, it's whether it's likely to be settled, but we don't know what that number is going to look like and how the the money that they've already agreed to pay, how that's going to affect what the what the eventual number that the Justice Department is going to settle on to to really punish them for what they did. Criminal investigation, what would rise to the level of criminal conduct? Would involve more fines? Would it involve

jail time? It depends. There's there's could be both criminal penalties sought against the company itself as well as individuals. UH. Deputy Attorney General Yates said today that they are investigating companies, they're investigating individuals who worked at Volkswagen. UH. There there's monetary penalties. There also is the possibility of jail time, UM, though it's not clear how that would work out. It if the people were you know, German citizens working in Germany.

What kind of jurisdiction there would be there, That's still a question that remains to be seen. Yeah, a lot of big questions if it goes that far. What's next? What are you watching next? And what should we be watching nick met next? As Uh, this first settlement has agreed and other charges are pursued. Well, right now, it's a proposed settlement. It undergoes a comment area than the judge needs to approve it, so that should be wrapped

up sometime in the fall. Uh. And then consumers will actually need to take action and sell back their car if they want to. Uh. As far as what's next, keep looking out for possible criminal charges. Uh. There's also individual states are still pursuing actions. Uh. And and what's going to happen in Europe? They they they still haven't figured out what they're doing for the car owners in Europe. So so really we don't know what the finals have on this is gonna be, but it's it's gonna be high.

I'll starting a fifteen billion, my friend. Uh, that's uh, that's not chump changes people used to say. Patrick Ambrosio is environmental reporter for Bloomberg b NA based in the Washington d C. Metro area Arlington, Virginia. This is Bloomberg Radio. Bloomer Taking Stock is brought to you by Cone RESNUC Accounting, Tax Advisory. Is your business ready to break through? See how professionals at Cone Resnick can help guide your business forward. Find out more at Cone Resnick dot com.