Breyer is expected to decide in October whether to grant final approval of the settlement or tell the parties to keep negotiating. “I think from what I’ve seen, those goals have been achieved, at least preliminarily”. The carmaker would spend up to $10 billion buying back or repairing about 475,000 2 Volkswagens and Audi diesel cars with 2-liter engines and paying owners $5,100 to $10,000 each.
Advertisement
“Because that’s significant, and that’s part of what you’re attempting to achieve in this settlement”, said Breyer, who is overseeing consumer lawsuits and government allegations that Volkswagen’s diesel engines cheated on USA emissions tests.
The pact eats up nearly all of the 16.2 billion euros ($17.8 billion) the company had set aside to cover the cost of the scandal worldwide. VW faces more than 1,100 lawsuits that have been consolidated before Breyer.
Once Breyer formally issues the order, the owners of the roughly 480,000 affected 2.0 liter vehicles will be able to start an online claims process at www.vwcourtsettlement.com.
“This is a very fair and reasonable settlement. and it allows Volkswagen to turn the page and begin to make things right in the United States and begin to re-earn the trust of our customers”, he said.
Under the settlement, eligible owners of these cars will be provided with two choices. Under a consent decree with the Justice Department, Volkswagen faces steep fines if it doesn’t hit an 85% participation rate by June 2019.
“I want these decisions to be fully informed”, Judge Breyer said.
Elizabeth Cabraser, lead lawyer for the consumers, told the judge Tuesday “the money is a means to an end that can not be achieved without a number of parties working together, as they have throughout the course of negotiations to accomplish a plan that works together in the real world”. Regulators have said that in normal driving they emitted up to 40 times more smog-causing nitrogen oxide than the legal limit. So far, U.S. air regulators have not approved a fix, but on Tuesday the head of the California Resources Board (CARB), which has played a large role in the regulatory fallout from Volkswagen’s cheating scandal, told a German paper that regulators were very close to approving a fix. So, far none of the fixes have met agencies’ standards. It does not cover about 85,000 more powerful Volkswagens and Audis with 3-liter engines also caught up in the emissions scandal.
VW plans to hire between 250 to 300 people in MI to process settlement claims and will be overseen full-time by 40 VW Group of America employees. VW is contracting for storage space to house vehicles it repurchases, she said.
VW shares closed up 2.5 percent at 124.75 euros in Frankfurt trading, shaving the stock’s decline since the the emissions-cheating was disclosed on September 18 to 23 percent. They had been marketed as “clean diesels” for the company’s Volkswagen, Audi and Porsche brands between 2008 and 2015.
Advertisement
Before it’s here, it’s on the Bloomberg Terminal.
