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

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<v Speaker 1>Good afternoon, Katherine Sharp gains for u S stocks after

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<v Speaker 1>by two d and thirty one point says It's game

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<v Speaker 1>sectors are higher, led by games and energy, Financials and technology.

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<v Speaker 1>leaders included Travelers, Jape and Morgan, and Visa, while DuPont

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<v Speaker 1>fell two point seven percent. Shares Word downgraded to neutral

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<v Speaker 1>over at JP Morgan after the bell Tonight look for

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<v Speaker 1>earnings from Nike. Estimates are four forty eight cents on

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<v Speaker 1>revenues of eight point to eight billion. Live from the

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<v Speaker 1>First and Breagan News desk on Bill Maloney, Katherine, thank you,

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<v Speaker 1>billan to hear live breaking news over your Bloomberg type

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<v Speaker 1>squ a k on your terminal. West Texas Intermediate crude

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<v Speaker 1>oil is up a dollar forty eight of barrel three

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<v Speaker 1>point two percent to forty one. Spockle down nine dollars

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<v Speaker 1>fifty cents announced at thirteen fifteen twenty and the ten

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<v Speaker 1>year treasury down five thirty seconds with the yield of

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<v Speaker 1>one point four five percent. And that's a Bloomberg business

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<v Speaker 1>flash you're listening to taking stock with Pim Fox and

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<v Speaker 1>Kathleen Hayes on Bloomberg Radio. Fourteen point seven billion dollars.

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<v Speaker 1>That's what v W has agreed to pay to settle

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<v Speaker 1>its claims from the emissions cheating scandal. It's one of

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<v Speaker 1>the nation's largest consumer class action settlements on record, and

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<v Speaker 1>in fact it is the largest ever paid by an

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<v Speaker 1>auto company. Joining US now is Patrick Ambrosio. He's environmental

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<v Speaker 1>reporter for Bloomberg b n A. He joins US now

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<v Speaker 1>from b NA headquarters in Alexandria, Virginia, the Washington d C.

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<v Speaker 1>Metro area. He was over across the river looking at

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<v Speaker 1>and listening to some very important testimony today. Patrick, thank

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<v Speaker 1>you for joining us. Yeah, thanks for having me. So

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<v Speaker 1>you were at the Department of Justice as press conference.

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<v Speaker 1>You're sitting on a call with plaintiffs attorneys. First of all,

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<v Speaker 1>tell us a little bit more about the settlement. I

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<v Speaker 1>understand that a big chunk of this money is going

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<v Speaker 1>to be used to buy back cars with the with

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<v Speaker 1>the diesel engines. Uh, buying back from the customers. I

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<v Speaker 1>guess I'd be pretty lucky in a sense if I

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<v Speaker 1>owned one. Yeah, that is a significant portion of that

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<v Speaker 1>big fourteen point seven billion number. Today, About ten billion

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<v Speaker 1>of that is going to go to consumers. Uh. The

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<v Speaker 1>consumers will have options. There's going to be a buy

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<v Speaker 1>back option that should start later this year. Uh. It's

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<v Speaker 1>how much you're gonna get it brought back for. It

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<v Speaker 1>is going to depend on the model. Uh. It could

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<v Speaker 1>range anywhere from twelve thousand, five hundred for some of

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<v Speaker 1>the older vehicles to as much as forty four thousand

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<v Speaker 1>for for some of the more recent vehicles. UH. It's

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<v Speaker 1>there's also the still the potential for a fix. UH,

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<v Speaker 1>Folkswagan has been looking for a way to bring these

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<v Speaker 1>vehicles into compliance with the emission standards. They haven't gotten

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<v Speaker 1>it approved, but if they do get one approved, UH,

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<v Speaker 1>sometime in the near future, consumers will be able to

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<v Speaker 1>get it to proved for get it fixed for free,

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<v Speaker 1>and get a payment on top of that to cover

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<v Speaker 1>any any sort of issue that they may have. So

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<v Speaker 1>what kind of things did you hear to at a

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<v Speaker 1>press conference today and on this call a plane if attorneys?

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<v Speaker 1>What what is being said? What's the mood? What's the

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<v Speaker 1>sense of where this goes next? Uh? Well, the mood

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<v Speaker 1>uh for the class action of planets for the people

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<v Speaker 1>that bought the cars that they were saying, you know,

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<v Speaker 1>this is this is what we wanted. We wanted substantial

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<v Speaker 1>compensation for the people who bought these cars and didn't

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<v Speaker 1>get what they paid for the buyback option. That was

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<v Speaker 1>something that was really pushed for because there were a

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<v Speaker 1>lot of people who are not happy Uh, there were

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<v Speaker 1>a lot of environmentally conscious consumers who bought these cars

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<v Speaker 1>because they were marketed as being you know, clean diesel,

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<v Speaker 1>they're better for the environment. People bought them and then

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<v Speaker 1>only to find out they were allied to and they're

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<v Speaker 1>actually significantly worse than they thought. On the government side, Uh,

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<v Speaker 1>it was you know, it's it's obviously a historic settlement,

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<v Speaker 1>but you know it's been described by Justice farming officials.

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<v Speaker 1>This is only the first step. This only solved some

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<v Speaker 1>of the problems. There's still a lot more on the table,

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<v Speaker 1>including possible criminal charges as well as of all, penalties

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<v Speaker 1>aren't addressed on this soil. Volkswagen could end up paying

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<v Speaker 1>a lot more than that fifteen billion. Give us a

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<v Speaker 1>sense of how that might add up and who will

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<v Speaker 1>they pay it to. I understand a significant civil penalties

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<v Speaker 1>from the federal government. This is something you have been

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<v Speaker 1>analyzing in your Bloomberg Intelligence research. But could it be

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<v Speaker 1>another fifteen billion? Would it be five hundred million? Where

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<v Speaker 1>does this how does this potentially stack up? Yeah, you know,

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<v Speaker 1>it's that's something they were very moment today. They said,

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<v Speaker 1>we're still in the discovery phase. Uh. They got more

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<v Speaker 1>than one point five million documents from Volkswagen that they're analyzing. UH,

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<v Speaker 1>and and this settlement really doesn't affect any of those

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<v Speaker 1>allegations that the civil penalties would be for violating the

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<v Speaker 1>Clean Air Act, the environmental law that they violated when

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<v Speaker 1>they sold these cars. UH. It's significant penalties are on

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<v Speaker 1>the table. UH, it's whether it's likely to be settled,

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<v Speaker 1>but we don't know what that number is going to

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<v Speaker 1>look like and how the the money that they've already

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<v Speaker 1>agreed to pay, how that's going to affect what the

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<v Speaker 1>what the eventual number that the Justice Department is going

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<v Speaker 1>to settle on to to really punish them for what

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<v Speaker 1>they did. Criminal investigation, what would rise to the level

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<v Speaker 1>of criminal conduct? Would involve more fines? Would it involve

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<v Speaker 1>jail time? It depends. There's there's could be both criminal

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<v Speaker 1>penalties sought against the company itself as well as individuals. UH.

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<v Speaker 1>Deputy Attorney General Yates said today that they are investigating companies,

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<v Speaker 1>they're investigating individuals who worked at Volkswagen. UH. There there's

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<v Speaker 1>monetary penalties. There also is the possibility of jail time, UM,

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<v Speaker 1>though it's not clear how that would work out. It

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<v Speaker 1>if the people were you know, German citizens working in Germany.

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<v Speaker 1>What kind of jurisdiction there would be there, That's still

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<v Speaker 1>a question that remains to be seen. Yeah, a lot

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<v Speaker 1>of big questions if it goes that far. What's next?

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<v Speaker 1>What are you watching next? And what should we be

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<v Speaker 1>watching nick met next? As Uh, this first settlement has

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<v Speaker 1>agreed and other charges are pursued. Well, right now, it's

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<v Speaker 1>a proposed settlement. It undergoes a comment area than the

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<v Speaker 1>judge needs to approve it, so that should be wrapped

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<v Speaker 1>up sometime in the fall. Uh. And then consumers will

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<v Speaker 1>actually need to take action and sell back their car

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<v Speaker 1>if they want to. Uh. As far as what's next,

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<v Speaker 1>keep looking out for possible criminal charges. Uh. There's also

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<v Speaker 1>individual states are still pursuing actions. Uh. And and what's

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<v Speaker 1>going to happen in Europe? They they they still haven't

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<v Speaker 1>figured out what they're doing for the car owners in Europe.

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<v Speaker 1>So so really we don't know what the finals have

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<v Speaker 1>on this is gonna be, but it's it's gonna be high.

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<v Speaker 1>I'll starting a fifteen billion, my friend. Uh, that's uh,

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<v Speaker 1>that's not chump changes people used to say. Patrick Ambrosio

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<v Speaker 1>is environmental reporter for Bloomberg b NA based in the

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<v Speaker 1>Washington d C. Metro area Arlington, Virginia. This is Bloomberg Radio.

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