Volkswagen and US Justice Reach Agreement On Consequences Of VW Diesel Lies

Washington DC April 21, 2016; David Shepardson writing for Reuters reported that Volkswagen AG and the Justice Department reached a deal in principle to address excess diesel emissions in nearly 600,000 polluting vehicles that will include buyback offers and a possible fix, a federal judge said Thursday.

U.S. Judge Charles Breyer said the settlement is expected to include a buyback offer for nearly 500,000 2.0-liter vehicles and a possible fix if regulators agree on it. The settlement will include an environmental remediation fund and additional compensation to owners to sell back or have vehicles fixed.

The government and Volkswagen have until late June to complete a final "consent decree" that will face public comment before taking effect.

Editing for Reuters by Chizu Nomiyama

EXPERT COMMENTS

From Rebecca Lindland, senior analyst, Kelley Blue Book: “The plan for Volkswagen going forward involves buy backs, modifications and for lessees, returning vehicles. But this matter is by no means resolved, since penalties and fines still loom. Additionally, Volkswagen has to establish a fund for appropriate remediation efforts and commit other funds to promote ‘green automotive entities.’ We don’t know yet the full financial impact on Volkswagen. While this has provided SOME guidance for owners and lessees, it is clear this matter is a long way from being settled. I believe this is the first time in the history of defeat device cases that the consumer will be compensated. Prior violations all were resolved through fines and penalties to the manufacturers. This could set a new precedent for these kinds of violations.”

From Karl Brauer, senior analyst, Kelley Blue Book: “The nature of Volkswagen’s diesel issue is reflected in this initial, complex ruling by the U.S. legal system. There will be no ‘simple fix’ because the vehicles involved cover a broad spectrum of models and production years. This is only the first step in a long road to final resolution. Volkswagen’s diesel customers now have a sense of what their options will be, but numerous details need to be finalized. Volkswagen’s total costs remain clouded, but beyond customer restitutions we know the company will have to fund various environmental efforts to offset emissions violations.”

From Michelle Krebs, senior analyst, Autotrader: “A federal judge’s blessing of Volkswagen’s framework of a plan to take care of its customers is a long-awaited first step, but much more work needs to be done to flesh out the details in the coming months. Indeed, it is a fairly sketchy framework at this point. Meantime, Volkswagen customers will have to stay patient a bit longer until all of the details of the compensation deal are hammered out. Then they will have to carefully weigh all of their options, which include having Volkswagen buy back their cars, have them repaired if that is possible, or return their lease cars.”

From Detroit News:Volkswagen plans to pay $1 billion to owners of its diesel cars that were rigged to cheat federal emission standards as the automaker tries to move past a scandal that has badly damaged its image in the United States. , Complete Detroit News Report