Advertisement

Source: VW, U.S. government ink deal to pay owners of cheating diesels

 
Published April 21, 2016

DETROIT — Volkswagen, the U.S. government and private lawyers have reached a deal for the automaker to spend more than $1 billion to compensate owners of about 600,000 diesel-powered cars that cheat on emissions tests, including buyback offers to some owners, according to a person briefed on the matter.

The "deal in principle" includes a maximum amount of spending, but the final details, like how much each owner would get, are still being worked out, according to the person, who asked not to be identified by the Associated Press because the deal hasn't been made public.

Some owners would get a choice of having VW repair their cars or buy them back, but that would vary by model year and engine type, the person said, but the deal does not yet include plans on how to repair the cars, which can spew out harmful nitrogen oxide at 40 times the allowable limit.

The agreement is likely to be announced this morning during a federal court hearing in San Francisco. Plans to fix the cars and the cost of the fixes apparently are still under negotiation.

It means that owners likely won't find out today how their cars will be fixed, and they won't know exactly how much they will get in compensation.

At the hearing, Senior U.S. District Court Judge Charles Breyer also is to discuss a schedule for depositions and information exchange between all sides in the case. He could even set a trial date if he's dissatisfied with the agreement.

Representatives for Volkswagen, the lawyers and the government all declined to comment Wednesday. Wyn Hornbuckle, spokesman for the Justice Department, which has sued Volkswagen, said federal officials would wait until today's hearing before speaking.

The owners filed dozens of lawsuits against VW after it acknowledged in September that it intentionally defeated emissions tests and put dirty vehicles on the road. The cheating allowed cars to pass laboratory emissions tests while polluting on real roads. VW faces as much as $20 billion in fines for Clean Air Act violations alone, before paying to fix the cars or compensate their owners.

California Air Resources Board enforcement chief Todd Sax said last month that he doesn't think it's technically feasible to repair any of VW's 2-liter diesel engines, under the hoods of most of the models at issue, to meet that state's stringent clean air rules.

Breyer said in March that former FBI director Robert Mueller told him Volkswagen, government regulators and attorneys for car owners had made substantial progress toward a resolution that would get the polluting cars off the road. He did not provide any details. Breyer appointed Mueller to oversee settlement talks.