Volkswagen reaches US$ 14.7 billion settlement in diesel scandal
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A U.S. federal judge approved Volkswagen record US$ 14.7 billion settlement with regulators and owners of 475,000 polluting diesel vehicles in the biggest automotive scandal ever, U.S. media reported.
The German automaker said it would begin buying back the cars in mid-November. In addition to the pre-scandal "trade in" value of the vehicle, owners will receive US$ 5,100 to US$ 10,000 in additional compensation.
VW admitted in September 2015 to installing secret software in diesel cars to cheat exhaust emissions tests and make them appear cleaner than they really were.
The settlement was reached with the U.S. Justice Department, Federal Trade Commission, the state of California and vehicle owners who had filed a class action lawsuit against the world's No. 2 automaker. VW has admitted to misleading regulators and still faces an ongoing criminal investigation.
Volkswagen agreed to spend up to US$ 10.033 billion on the buybacks and owner compensation and US$ 4.7 billion on programs to offset excess emissions and boost clean-vehicle projects.
VW may also be allowed to repair vehicles if regulators approve fixes. The affected vehicles emit up to 40 times legally allowable pollution levels.
It represented the largest civil settlement worldwide ever reached with an automaker accused of misconduct.
Hinrich Woebcken, president and CEO of Volkswagen Group of America Inc, called final approval of a settlement first announced in June "an important milestone in our journey to making things right in the United States," and pledged to carry out the terms "as seamlessly as possible."
Breyer turned away objections from car owners who thought the settlement did not provide enough money, saying it "adequately and fairly compensates" them.
In total, Volkswagen has agreed to date to spend up to US$ 16.5 billion in connection with the scandal, including payments to dealers, states and attorneys for owners. The scandal rattled VW's global business, harmed its reputation and prompted the ouster of its CEO.
The settlement covers 2.0-liter polluting diesel Beetle, Golf, Jetta, Passat and Audi A3 cars from the 2009 through 2015 model years. Up to 490,000 people will take part in the settlement because some vehicles had multiple owners.
VW has hired 900 people, including one to be stationed at each dealership, to handle buybacks.
The company still faces billions more in costs to address 85,000 polluting 3.0 liter vehicles and Justice Department fines for violating clean air laws. It also faces lawsuits from at least 16 U.S. states for additional claims that could hike the company's overall costs.
Last month, a Volkswagen engineer pleaded guilty to helping the company evade U.S. emission standards. His lawyer said he would cooperate with federal authorities in their criminal probe.