Volkswagen AG has a long list of things to do after admitting it systematically cheated on emissions testing on 11 million diesel vehicles.
First is fixing the affected vehicles worldwide. Then, VW must compensate those harmed by its deceit.
But Volkswagen has a third challenge to address quickly, while it can exert some control. VW must reimburse governments for subsidies they made to encourage citizens to buy "clean diesels" that weren't.
Plenty of governments are hopping mad. Correctly, they want their taxpayer funds back. Volkswagen should immediately agree to return them because governments have other powers: They can levy fines and bring criminal charges against VW and individual employees.
VW has reserved $7.3 billion for diesel scandal costs, about $660 per affected vehicle. That's clearly inadequate. Lawsuits are mounting. So are investigations of wrongdoing, false advertising and tax fraud.
Consider the variety. France and Spain want back 1,000 euro ( $1,128 on Oct. 8) subsidies made to VW diesel buyers. In West Virginia, the attorney general sued, seeking restitution payments of up to $6,855 each to 2,684 VW buyers, plus state civil penalties of $5,000 per vehicle. Harris County, Texas, sued VW for $100 million for polluting local air. Class actions are being sought by VW owners, investors, even independent used-car dealers citing falling values of used VWs.
Volkswagen must fix the vehicles, compensate those directly harmed and repay taxpayer funds falsely obtained. That's a moral obligation. But VW also should urgently signal its willingness to cooperate.