Volkswagen set to reveal deal on diesel scandal
It’s a big day for Volkswagen diesel owners.
The automaker, which has admitted to cheating on emissions tests, is scheduled to appear in court and explain how it will fix these cars and compensate their owners.
VW has been in round-the-clock negotiations with U.S. environmental regulators, criminal investigators as well as attorneys for the owners of 600,000 diesel cars in the U.S.
There are widespread reports that the automaker has reached a deal to pay each diesel owner up to $5,000. VW could also offer to buy back cars from owners who no longer want them. Volkswagen declined to comment.
Volkswagen so far has only given owners $500 in cash and $500 in store credits. It’s also hired attorney Kenneth Feinberg to run a compensation fund for owners. But details of that compensation plan have yet to be decided.
So far VW has publicly resisted calls for widespread repurchases. It said it only anticipated repurchasing cars that are too difficult or expensive to fix.
But many owners ,and even members of Congress, have called on the automaker to buy back the cars from unhappy owners.
“Finally, Volkswagen appears to have a proposal to take care of customers who purchased its polluting diesel vehicles,” said Michelle Krebs, senior analyst with AutoTrader. “It’s a critical first step to move Volkswagen forward from this debacle.”
Last fall regulators announced that VW’s diesel cars had been found to contain software which cheated on pass emission tests and let cars dump up to 40 times the allowed level of pollutants into the air. VW’s CEO and head of its U.S. operations both quit as a result.
There are about 11 million of the cars worldwide. VW faces massive fines that could exceed $18 billion for violating the U.S. Clean Air Act, as well as criminal probes and a suit by federal authorities charging it with deceptive advertising that touted “clean diesel” cars.
Judge Charles Breyer, the brother of Supreme Court Justice Stephen Breyer, granted VW a month-long extension in late March after all sides assured him that negotiations were progressing. One VW attorney told Breyer that company engineers and executives have been working around the clock.
“Your honor, I had probably the hardest month of my now 25-year career last month,” VW attorney Robert Giuffra said at the March hearing.
“I’m optimistic that you’ll be able to break your record in the next month. That’s my goal,” Breyer told him.