VW Offers $900 Million to Diesel Owners in Europe
Volkswagen says it’s ready to begin paying €830 million in reparations in Germany to owners of diesels it rigged to evade European emission standards.
But it refuses to shell out another €50 million ($54 million) that a bunch of plaintiffs’ lawyers demanded in exchange for administering the plan.
Step Right Up
It’s a big move for a company that for four years has rebuffed pressure to pay customers for any lost value or inconvenience. The plan also gives VW the efficiencies of a class-action-type settlement, even though no binding settlement was reached.
VW had previously negotiated the size of the payout with VZBV (the Federation of German Consumer Organizations). But the company says it stopped pursuing a formal deal when attorneys refused to justify the processing fee they wanted.
Instead, VW is opting for a do-it-yourself solution. Next month the company will launch an online service (in German) where owners can qualify for payments ranging from $1,500 to $6,800. Or they can take their chances with Germany’s convoluted court system.
How Did It Come to This?
Back in September 2015, VW admitted selling 11 million tainted diesels worldwide, including 1.5 million in Germany and 7 million elsewhere in Europe.
About 555,000 of those doctored 4- and 6-cylinder engines ended up in the hands of U.S. owners. VW agreed three years ago to make various amends to those customers to the collective tune of more than $16 billion. In some cases, that meant buying back cars.
VW steadfastly refused to do the same in Europe, where the tab would have been astronomical. Besides, the legal expectations for compensation there are nothing like those in the litigious U.S.
This doesn’t end VW’s persistent diesel woes. But it may be a signal that the beginning of the end is approaching for the scandal that wouldn’t die.
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