Check please! - How much will VW have to pay?
German automakers like BMW, Mercedes-Benz, and Volkswagen have long been regarded as some of the greatest winners of globalization. Even at times when Europe’s economy was contracting, industrial powerhouses sporting the coveted “made in Germany” seal saw sales increase in global markets from China to the US.
While this insulated them against dropping car sales in Europe, where the aftershocks of the Great Recession are still holding back their once loyal customers from buying new vehicles, the newfound independence also came with a catch: Selling to Chinese and American customers also means having to deal with Chinese economic conditions and accepting American rulesets.
VW is now experiencing the latter in the most painful way imaginable. US regulators, who have just recently made clear that they are not at all squeamish when it comes to going up against time-honored European Institutions when they took on FIFA-corruption, have now taken the German company into their crosshairs.
VW has committed fraud on a gigantic scale when it tweaked onboard computers in some of its Diesel cars to show lower emissions than those actually being emitted. But if the company is now punished to the fullest extent possible, penalties could add up to a truly astonishing figure. In the end the total amount VW will have to pay could even surpass apparently bigger corporate offenses like BP’s Deep Water Horizon debacle, which came with a total price tag of roughly $37 Billion.
At the moment there are several sources of trouble on the horizon for VW:
1. In the US specialized law firms are preparing class action suits against VW. The aim to include cheated buyers, people who feel that higher emissions have had a decremental effect on their health, and investors who have lost money due to tumbling share prices of VW’s stock
2. In South Korea, another big car-exporting country, two separate suits being prepared.
3. In the US the EPA and the Department of Justice are collecting evidence. Harris County, Texas alone is suing VW for $100 Million for pollution stemming from regional car sales. More suits will follow in Europe and Australia.
Experts are estimating a figure in the tens of billions of Dollars hitting the automaker if all suits are decided in the various complainants’ favor.
While it is of course important to hold the company to account for the wrongdoing it has doubtlessly committed, it is also advisable not to loose all measure when it comes to doling out the punishment. American case law, that keeps the range of the pricetag within the confines of previously decided cases, might serve as good way to keep things in perspective should demands get out of hand.