Bavaria officials said Tuesday the state will sue Volkswagen for damages caused by the fuel emission scandal, marking the first time the company has been sued by its home state.
The German state of Bavaria – home of benchmark European companies BMW, Siemens and Allianz – has had its financial well-being laid low by last year’s emission scandal. The state’s pension fund lost as much as $783,580.00 after VW’s shares toppled following revelations the company had been placing so-called defeat devices on diesel vehicles to cheat fuel emission tests.
VW acknowledged in September installing devices in many of its most popular vehicles, including the Beetle and Porsche Cayenne, expressly to curb smog-producing nitrous oxide emissions. Nearly 585,000 vehicles in the U.S. had the software, with roughly 11 million vehicles worldwide.
All told, the company’s fuel emission cheating scandal will cost a total of $14.7 billion, $10 billion of which will go to the owners of the tainted vehicles, while another $2.7 billion will go to the Environmental Protection Agency for environmental mitigation. The company will plow another $2 billion investment into electric vehicle technology, which will be distributed within the next decade.
Bavaria owned about 58,000 VW preference shares when the scandal broke, according to a spokeswoman at the Bavarian finance ministry.
State officials expressed their frustration with VW and the damage it has caused to the state’s finances, with Bavarian Finance Minister Markus Soeder telling reporters Tuesday that,”We want this money back.”
Soeder said Bavaria’s pension fund would file the suit in September at the regional court of Braunschweig near VW’s headquarters, according to German press outlet Deutsche Presse-Agentur.
Bavaria’s decision to sue comes as VW was forced to halt vehicle sales in South Korea.
The German environment ministry is considering whether to revoke certification of the 32 VW vehicles, and its Audi brand, which would essentially ban the company’s operations. VW will present its case July 25.
Bavaria is not the only German state to have criticized VW, but it is the first to have sued.
Lower Saxony withheld backing for VW’s former chief executive Martin Winterkorn in June, and current brand chief Herbert Diess, in 2015 when the scandal came to light. Both men are currently being investigated by Braunschweig prosecutors, who are also probing several lower-level VW managers over the scandal.
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