VW confirms $4.3 billion U.S. settlement over diesel emissions

BERLIN -- Volkswagen Group confirmed Tuesday it has negotiated a $4.3 billion concrete draft settlement with U.S. regulators to resolve its diesel emissions issues and plans to plead guilty to criminal misconduct as part of the civil and criminal settlement.

VW said with the addition of the fine, the automaker's diesel costs are now set to exceed the nearly 18.2 billion euros ($19.2 billion) it has set aside to handle the problem. VW also said it will face oversight by an independent monitor over the next three years.

The automaker's supervisory board is set to meet on Wednesday to approve a civil and criminal settlement with the U.S. Justice Department.

The settlement includes a guilty plea by the automaker regarding certain U.S. criminal law provisions and a statement of facts on the basis of which the fines have to be made, VW said.

VW said the impact of the accord on its 2016 financial results cannot yet be defined.

The deal comes as the automaker seeks to move past its emissions cheating scandal.

Analysts welcomed that a settlement looked set to be reached before President-elect Donald Trump takes office on Jan. 20, saying it would mark a milestone in VW's efforts to overcome its biggest-ever corporate scandal.

"There is apprehension in the market that Trump may become an unpredictable president and turn against non-U.S. companies," said Bankhaus Metzler analyst Juergen Pieper. "The deal is not cheap but it gives clarity to investors and relief to VW."

VW admitted in September 2015 to installing secret software in hundreds of thousands of U.S. diesel cars to cheat exhaust emissions tests and make them appear cleaner than they were on the road. It said as many as 11 million vehicles could have similar software installed worldwide.

On Monday, VW executive Oliver Schmidt was charged with conspiracy to defraud the United States over the emissions cheating and VW was charged with concealing the cheating from regulators. It's still not clear where criminal investigations into the responsibility of individual managers will end after Schmidt was charged. U.S. prosecutors plan to charge high-level VW executives based in Germany over the scandal, Bloomberg reported, citing a person familiar with the matter.

In Germany, state prosecutors are investigating whether former CEO Martin Winterkorn misled investors by withholding information about the scale of its problems with U.S. regulators. Prosecutors are also investigating the roles of chairman Hans Dieter Poetsch, previously finance chief, and VW brand head Herbert Diess.

VW has repeatedly said no current or former board members were involved in the cheating.

The company has agreed to spend up to $17.5 billion in the United States to resolve claims by U.S. regulators, owners and dealers and offered to buy back nearly 500,000 polluting vehicles.

Pieper said that with 31 billion euros ($33 billion) of net liquidity at the end of September, VW was able to cope with the cost of the diesel scandal, which he expects to reach 30 billion euros.

VW would face major financial difficulties if the European Commission, governments and consumer groups were to succeed in pushing VW to grant redress to owners of affected diesel cars similar to that agreed in the U.S., Pieper said.

VW Group said on Tuesday it had record sales in 2016 of 10.3 million vehicles, including a 12 percent jump in December. That figure should put VW ahead of Japanese rival Toyota Motor Co as the world's largest car producer by volume for the year.