Volkswagen had earlier testified in front of a federal judge about buying back nearly 500,000 vehicles of 2.0-liters diesel vehicles that have been categorized based on the amends that violate the United States emission rules. The settlement comes about a year after Volkswagen admitted that it rigged 11 million vehicles worldwide to cheat on its emissions.
It’s anticipated that most owners will take the buy back option considering the models exceed USA emissions standards in real-world driving conditions.
The terms of the agreement allow affected 2-liter diesel owners and lessees the choice of accepting a vehicle buyback or lease termination, or having the cars fixed.
While huge, the settlement was dwarfed by the $246 billion agreement between the tobacco industry and USA states in 1998 and the $38 billion BP has spent so far for the 2010 oil spill in the Gulf of Mexico, according to Bloomberg.
Additionally $324m will go on attorney’s fees and $8.5m in “out of pocket” costs.
There are lawsuits against the German carmaker in other countries; in the US, there remains a possibility of criminal charges. The next hearing is scheduled for December 19 and 20.
VW agreed to spend $US 10 billion in buyback – plus between $US 5,100 and $US10,000 per vehicle in compensation – with an additional $US 2.7 billion on environmental remediation and $US 2 billion to promote use of “zero emissions” vehicles, notes AFP.
Another 90,000 cars with 3-liter diesel engines also have cheating software, but they aren’t part of this settlement. Breyer had granted preliminary approval for the settlement in July, praising the “enormous efforts” by all sides to reach an agreement and avoid a trial. The Volkswagen owners who would rather have the auto fixed may need to wait for several weeks until the Environment Protection Agency comes up with a software solution that is to work with most vehicles.
VW must make payments available within 10 business days from Tuesday, according to the order. “Maybe I’ll get it for Christmas”, said Melnyk. But, in reality the cars emitted higher-than-legal levels of pollutants.
Late last month, Volkswagen agreed to pay its US dealers up to $1.2 billion to compensate them for losses suffered as a result of the emissions cheating scandal. Under the agreement, VW will buy or fix affected cars.
Some owners objected, saying they should receive the full purchase price of their vehicles.
The settlement calls for the German vehicle giant to spend up to 10 billion dollars (£8.1 billion) to buy back or fix the affected cars.
Employees assemble a Volkswagen Crafter van at the new Volkswagen Nutzfahrzeuge (Commercial Vehicles, VWN) factory in Wrzesnia, Poland, 24 October 2016.
Volkswagen’s long-anticipated $14.7 billion diesel emissions cheating settlement was finalized today in a federal court.
It’s understood Volkswagen Group is now in the process of cutting costs to help pay for the scandal.
The company is still facing criminal investigations by the US Justice Department and German prosecutors which could cost it even more.
Owners have until September 1, 2018, to make a claim and VW estimates it will start compensating those affected by the middle of next month.
The deal could get almost half a million diesel-powered cars off USA roads.
The software recognized when the cars were being tested on a treadmill and turned on pollution controls. The EPA alleged the scheme let the cars spew more than 40 times the allowable limit of nitrogen oxide, which can cause respiratory problems in humans.
Note: for purposes of clarity, “Volkswagen” has been used to refer to the VolkswagenGroup parent company, while “VW” has been used to refer to the company’s mass-market brand of automobiles.
Source: consumes Connection
By: Larry Hoffmann
