VW poised for £12bn US settlement 19 | 10 | 2016
VOLKSWAGEN IS POISED to pay an astronomical £12 billion to US customers in a proposed buyback and compensation in the wake of the dieselgate fiasco. A US judge has signalled his approval that the payments should go ahead, saying he was “strong inclined” to approve it.
The agreement includes $10.03 billion dollars (£8.15bn) to compensate 475,000 VW owners in the US affected by the dieselgate. VW has also committed an extra $4.7bn (£3.8bn) for environmental pollution offsetting and the promotion of EVs (electric vehicles). A final decision on the settlement will be made on October 25.
In the ‘Land of Litigation’, lawyers and some VW owners argued the deal didn't go far enough, and the money offered would not cover expenses such as extended warranties, maintenance and government licensing fees.
But at the hearing in San Francisco lead counsel for owners, Elizabeth Cabraser, said that while not perfect, the offer represented a “fair, reasonable and adequate” settlement.
Related: Dieselgate — VW to "buy back" cars
US district judge Judge Breyer, chairing the hearing, also gave preliminary approval to an agreement with VW dealers in the US in which VW agreed to pay 652 dealers a total of $1.21bn (£939 million). This figure is compensation as part of a deal that will see the manufacturer buy back certain 'unfixable' models. The company is offering between $5100 and $10,000 compensation per car, in addition to the repurchase price, and has hired 900 people to handle the process.
Discussions are still ongoing over a deal to fix some of the 2.0-litre models affected by the emissions scandal.
Judge Breyer is also considering the approval of a settlement which will see VW pay more than $600m to 44 US states and spend $2bn promoting zero-emissions vehicles and infrastructure. That’s in addition to another $2.7bn to offset diesel pollution.
Meanwhile, in completely separate discussions to be held on November 3, VW Group is hammering down details of another package which would see it buy back 85,000 VW, Porsche and Audi vehicles — which use the 3.0-litre-engined which also exceeded emissions standards — and offer compensation to their owners.
Related: VW to become "more emotional"
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Jim McGill