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December 24, 2016

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VW deal reached for US 3.0-liter car owners

Source: Agencies | December 24, 2016, Saturday | Print Edition

A US federal judge said Volkswagen AG has reached an agreement in principle to provide “substantial compensation” to the owners of about 80,000 3.0-liter polluting diesel vehicles, a key hurdle to resolve the German automaker’s emissions scandal.

District Judge Charles Breyer did not disclose the amount of owner compensation, which is not included in a US$1 billion settlement announced earlier this week between VW and US regulators. Half of the compensation will be paid at the time Breyer gives final approval of the settlement. Some fixes for the 3.0 liters may not be approved until 2018, Breyer said on Thursday.

Earlier this week, Volkswagen reached the US$1 billion settlement with US regulators, offering to buy back about 20,000 of the vehicles, fix the remaining 60,000 and pay US$225 million into an environmental trust fund to offset the vehicles’ excess emissions.

The settlement covered luxury VW, Audi and Porsche vehicles with 3.0-liter engines. With the agreement, Volkswagen would spend as much as US$17.5 billion in the United States to resolve claims from owners as well as federal and state regulators over polluting diesel vehicles in addition to compensation for the 3.0-liter owners.

Volkswagen spokeswoman Jeannine Ginivan said the automaker was pleased with the agreement in principle, but said details will remain confidential for now.

Breyer said the final agreement must be filed with the court by January 31, and he expects to hold a February 14 hearing to approve the deal. The Federal Trade Commission is also expected to back the deal, he added.

Volkswagen, the world’s No. 2 automaker, could still spend billions more to resolve a US Justice Department criminal investigation and federal and state environmental claims.

A deal could be reached before the end of the Obama administration, said sources briefed on the matter. Breyer in October approved VW’s earlier settlement worth US$15 billion with regulators and US owners of 475,000 diesel vehicles with smaller 2.0-liter engines, including an offer to buy back the cars.

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