Volkswagen completed the corporate equivalent of probation after a court-appointed monitor said Monday that the carmaker had fulfilled the conditions of a 2017 plea bargain stemming from its use of illegal software to evade emissions regulations.
The final report by Larry Thompson, a former United States prosecutor appointed to enforce Volkswagen’s promise to reform its corporate culture, noted that the German automaker had adopted measures like making it easier for employees to report wrongdoing. It is a major milestone for the company as it tries to recover from one of the biggest scandals in automotive history, one that has cost it well over $30 billion and severely damaged its reputation.
Volkswagen, the world’s largest carmaker, pleaded guilty in 2017 to conspiring to defraud the U.S. government and violate the Clean Air Act. The company had rigged its diesel-powered cars to meet air-quality standards while being tested, while they exceeded those standards in regular driving.
As part of the plea agreement with the U.S. Justice Department, Volkswagen agreed to cooperate with a court-appointed monitor whose job was to ensure that the company reformed its compliance systems and corporate culture so that similar wrongdoing would not happen again.
Mr. Thompson, the monitor, was deputy attorney general under President George W. Bush and later worked as general counsel for PepsiCo.
“Volkswagen is a better organization today than it was three years ago,” Mr. Thompson said in a statement, though he added that keeping the company on an ethical path “will require continued vigilance.”
Volkswagen’s chief executive, Herbert Diess, said in a statement that “Mr. Thompson and his team have helped us make Volkswagen a stronger, more transparent company, but the end of the monitorship is not the end of our journey.”
By court order, Mr. Thompson operated largely in secret, supervising dozens of lawyers and specialists based at Volkswagen’s headquarters in Wolfsburg, Germany, who oversaw attempts by the company to reform its sprawling organization. Volkswagen employs more than 670,000 people; it produced nearly 11 million vehicles last year.
Volkswagen’s unforgiving, win-at-all-costs culture was seen as the underlying cause of the emissions scandal. In 2006, when engineers developing a new diesel engine discovered that they could not meet United States emissions standards, they devised engine software designed to deceive regulators. To admit failure would probably have meant the end of their careers at Volkswagen.
Among other reforms, Volkswagen has created a whistle blower system so that employees can report possible wrongdoing without fear of reprisal. Volkswagen also delegated more responsibility to lower-level managers in an effort to become less hierarchical.