US judge weighing VW settlement
October 25, 2016
The deadline over a proposed settlement between Volkswagen and the US Justice Department over the German company's Dieselgate scandal expires Tuesday with all eyes on a federal judge in San Francisco. US District Judge Charles Breyer already signaled last week he is inclined to approve the multi-billion dollar settlement but wanted time to consider Volkswagen customer's objections and decide whether he should recommend any changes.
The settlement requires the German auto giant to spend up to $10 billion to buy back or repair about 475,000 Volkswagens and Audi vehicles with 2-liter diesel engines and pay their owners an additional $5,100 to $10,000 each. An additional 4.7 billion is earmarked for environmental mitigation and funds to promote zero-emission vehicles.
The company was caught deliberately rigging its emission systems to give false results during diagnostic tests and still faces billions more in fines and possible criminal liability for the fraud scheme.
VW's attorneys have urged the court to approve the deal. But some owners object, arguing they should receive the full purchase price of their vehicles. Mark Dietrich, an Audi owner from San Francisco, told the judge at a hearing last week that Volkswagen played owners for fools and the settlement didn't go far enough to compensate them.
The Wolfsburg-based company said this spring it had set aside $18.2 billion to cover the cost of the global scandal, which erupted in September 2015 when US regulators discovered that VW diesel cars were outfitted with software designed to rig emissions testing to screen the true emission output.
The US Environmental Protection Agency alleged the scheme let the cars spew more than 40 times the allowable limit of nitrogen oxide, which can cause respiratory problems in humans. VW's sales have since faltered. In the first five months of 2015, before the scandal, Volkswagen sold 144,006 cars in the US In the first five months of this year, the total fell 13 percent, to 125,205.
jar/kl (AP, dpa)