Volkswagen pleads guilty in emissions case

Hearing set for next month to decide what amends company must make for offenses

DETROIT Volkswagen Group pleaded guilty Friday to three criminal charges arising from its diesel emissions scandal, setting it up for a penalty that will probably propel its total costs from the debacle past the $20 billion mark.

U.S. District Court Judge Sean Cox in Detroit accepted the plea but postponed agreeing to proposed fines and terms of a settlement. Another hearing was set for April 21.

Volkswagen, the German automaker that became an icon with its humble Beetle, pleaded guilty to charges of fraud, obstruction of justice and misrepresenting the capability of vehicles with diesel engines it imported into the USA.

Cox said he wanted more time to review the terms of the settlement agreement, which proposes a $4.3 billion fine that is far less than what the company could be fined under federal sentencing guidelines. Volkswagen has agreed to settlements worth about $17 billion for U.S. consumers and dealers who own the automaker’s diesel vehicles.

“With all due respect ... this is a very, very serious offense,” Cox said, adding that he wanted more time to consider objections filed on behalf of some customers.

The judge accepted Volkswagen’s decision to appear in court, plead guilty and waive its right to a jury trial.

Manfred Doess, Volkswagen’s general counsel, acknowledged that the company, the world’s largest automaker, willfully and knowingly created software designed to fool government regulators so its diesel engines could pass tougher emissions standards adopted in 2007. The software allowed the cars to engage all their emissions gear during testing, then turn it off on the open road. Volkswagen’s engines spewed nitrogen oxides at up to 35 times the legal limit in real-world conditions.

“Volkswagen AG is pleading guilty on all three counts of the allegations because it is guilty of all three counts,” Doess said.

Doess admitted that Volkswagen employees designed software intended to cheat on emissions and that some employees destroyed documents after they knew the company was under investigation.

Doess said that although highlevel employees were involved, they were “below the level of Volkswagen AG management board.”

As part of a proposal announced in January, the company agreed to sweeping changes, new audits and oversight by an independent monitor for three years.