£12 billion Volkswagen settlement set for US approval
A US judge signals that approval of a proposed buyback and compensation settlement from VW is likely in the wake of dieselgate
A proposed buyback and compensation offer from Volkswagen looks set to go ahead after a US judge said he was “strongly inclined” to approve it.
The settlement will compensate 475,000 VW owners in the US affected by the dieselgate scandal to the tune of $10.03 billion dollars (£8.15bn). An extra $4.7bn (£3.8bn) has been earmarked for environmental pollution offsetting and the promotion of EVs (electric vehicles).
On Tuesday, US district judge Charles Breyer said he will make a final decision by 25 October. He was speaking at a hearing in San Francisco, in which lawyers and some VW owners argued that the deal didn’t go far enough, and that the money offered would not cover expenses such as extended warranties, maintenance and government licensing fees. However, lead counsel for owners, Elizabeth Cabraser, said that while not perfect, the offer represented a “fair, reasonable and adequate” settlement.
Judge Breyer told those present that he would consider the objections and whether to make any changes to the offer, but said it was imperative to act quickly.
He also gave preliminary approval to an agreement with VW dealers in the US. Earlier this month, VW agreed to pay 652 dealers a total of $1.21bn (£939 million) in compensation as part of a deal that will see the manufacturer buy back certain ‘unfixable’ models. The company is offering between $5,100 and $10,000 compensation per car, in addition to the repurchase price, and has hired 900 people to handle the process.
A deal to fix some of the 2.0-litre models affected by the emissions scandal is still being discussed.
As part of its settlement, VW looks set to pay more than $600m to 44 US states and spend $2bn promoting zero-emissions vehicles and infrastructure, as well as another $2.7bn to offset diesel pollution. These measures also need approval from Judge Breyer.
Separate discussions are ongoing about whether the Volkswagen Group should buy back some 85,000 VW, Porsche and Audi vehicles and offer compensation to their owners. These concern 3.0-litre-engined vehicles that also exceeded emissions standards. Judge Breyer has arranged a hearing on that issue for November 3.
Despite the latest arrangements, VW still faces the possibilities of massive fines from the US Government as criminal investigations into the scandal continue. The German manufacturer has admitted that it used software fitted in vehicles to falsify emissions data during official tests, affecting millions of vehicles worldwide.