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VW to pay over $1.2-billion to 3.0-litre diesel engine owners

2017-02-03 14:36

END OF THE ROAD? Volkswagen has agreed to buy back almost 20 000 diesel cars from owners who bought vehicles fitted with an emissions-cheating device. Image: AP / Damian Dovarganes

Frankfurt - Volkswagen has agreed to pay at least $1.2-billion in buybacks and compensation to settle claims from US owners of cars with larger diesel engines that the company rigged to cheat on emissions tests.

And the company could pay even more, as much as $4-billion, if it can't come up with an acceptable fix for cars that can be repaired.

The proposed settlement filed late Tuesday (January 31) before Judge Charles R. Breyer in US District Court in San Francisco covers owners of some 75 000 Audi, Volkswagen and Porsche cars with 3.0-litre diesel engines.

$15-billion settlement

Volkswagen has already agreed on a $15-billion settlement for some 500 000 smaller, 2.0-litre diesel engines.

Under Tuesday's proposed class action settlement, owners of older models from 2009-2012, which cannot be fixed to meet pollution standards, will be offered buybacks or trade-ins plus compensation ranging from $7755 to $13 880, according to a statement from owners' attorneys.

People with newer cars from model years 2013-16, which can be fixed, will get compensation of $7039 to $16 114.

More: VW emissions scandal: What does it mean for SA?

That's if VW can come up with a fix approved by US environmental authorities by an agreed deadline. If not, buybacks could push the cost as high as the $4.04-billion laid out in court documents. The deal must still get court approval to take effect.

Also Tuesday, parts supplier Robert Bosch GmbH agreed to pay $327.5-million to settle claims from consumers and dealers of used vehicles regarding 2.0-litre and 3.0-litre engines, while not accepting it was at fault. CEO Volkmar Denner said the company settled so it could focus on its business activities.

"We wish to devote our attention and our resources to the transition in mobility and in other areas of activity," Denner said in a statement.

Defeat device 

The Wolfsburg-based automaker has admitted it equipped diesel engines with software that detected when the vehicle was being tested and turned the emissions controls off during everyday driving. The result was cars that emitted some 40 times the US limits of nitrogen oxides, a pollutant that can harm people's health. Some 11-million cars worldwide have the deceptive software.

The proposed civil diesel settlements help put the scandal behind the company, after it agreed to plead guilty and pay $4.3-billion to settle US criminal issues. But legal issues remain for Volkswagen's former CEO, Martin Winterkorn, and 36 others who are under criminal investigation in Germany. US prosecutors have criminally charged seven former Volkswagen employees.

Investors in Germany are suing the company, saying management didn't inform them of the problem in a timely way. Volkswagen shares plunged after the scandal broke.

The company's reputation has taken a beating since US authorities revealed the cheating in September 2015. But that didn't stop VW from passing Toyota last  to become the world's largest carmaker by sales. Booming sales in China helped Volkswagen win the sales crown with 10.3-million vehicles sold to 10.2-million for Toyota.


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