Volkswagen Settlement Agreement Gets the Green Light
- Author: Archie Newman Oct 30, 2016,
Oct 30, 2016, 2:27
Volkswagen on Tuesday took a major step toward extricating itself from its diesel emission cheating scandal as a California judge approved a historic $14.7 billion settlement with 475,000 vehicle owners.
During a hearing on October 18 around 20 Volkswagen owners objected, but Judge Breyer described the settlement as "fair, reasonable, and adequate".
That funding pool also covers owners who don't want to participate in buybacks, but instead want to have their cars fixed (though there's still no CARB and EPA-approved vehicle "modification" yet, and VW has until late next year to get that finalized).
A USA judge on Tuesday granted final approval for a $14.7-billion class action settlement in the emissions cheating scandal, the largest such automaker settlement in history. In addition to having their cars bought back, owners can get payments of $5,100 to $10,000.
Failure to do so will require the company to pay an additional $85 million into the environmental mitigation trust.
Vehicle owners have until September 2018 to file a claim.
Another 90,000 cars with 3-liter diesel engines also have cheating software, but they aren't part of this settlement.
About 3,500 USA owners have reportedly opted out the current settlement and most likely will sue the automaker, arguably No. 2 of the world.
The scandal has damaged Volkswagen's reputation and hurt its sales.
There is also an option for owners who wish to have their vehicle fixed instead of being bought back by the German automaker.
The settlement calls for the German automaker to spend up to $10 billion to buy back or fix the affected cars.
The company is still facing criminal investigations by the US Justice Department and German prosecutors which could cost it even more.
To date, almost 340,000 owners have registered to take part in the settlement, and only about 3,500 owners have opted out.
Some owners have objected, saying they should receive the full purchase price of their vehicles. This news comes just over four months after the initial announcement of the $14.7 billion settlement proposal, and more than a year after the Dieselgate scandal first broke. The Volkswagen scandal was reported and disclosed in September 2015 by Environmental Protection Agency. Vehicle owners and the U.S. Department of Justice sued. Subsequent inspection had revealed that the group's cars were emitting 40 times more harmful emissions than the allowed limits. When such a test was detected, the device reduced the amount of pollution emitted by the auto.