VW settles U.S claims with $15.3 billion

However, VW is still on in the all clear. It will have to wait till October 18 wherein U.S. District Judge Charles Breyer will pronounce his verdict in a final approval.

In a significant development in Volkswagen AG’s history, a federal judge has provided the company a preliminary approval for the buyback of upto 475,000 of its vehicles, following its U.S. diesel emissions cheating scandal. This marks the crossing of a significant legal hurdle for the company.

U.S. District Judge Charles Breyer in San Francisco has set October 18 as the date for its final approval. What the preliminary approval means is that U.S customers of its 2.0 litre diesel powered vehicles can now gain access to a site through which they can learn the amount of compensation that they are eligible for.

This makes it the largest ever automotive buy-back program in the U.S.

Meanwhile, Volkswagen has said it will continue to work with regulators to get its fix approved. It has also told its dealers the fix is likely to consist of 6 software upgrades along with new catalytic converters.

VW will also provide a fix for 85,000 of its 3.0 litres vehicles, in the U.S.

The Justice Department had rejected its earlier plan saying its fix was insufficient after which VW came up with a new plan. The fix for these 85,000 vehicles includes Audi Luxury cars from 2009 to 2016.

In order to process the settlement claims, VW will hire 250 to 300 people in Michigan. They will be overseen by 40 full time employees from VW Group of America.

The deal with the Justice Department states that VW will provide $2 billion over 10 years, which will be used to fund programs which promote the construction of electric vehicle charging infrastructure, zero-emission ride sharing fleets and such efforts.

Additionally, under the deal, VW will also fund $2.7 billion over 3 years to enable tribal agencies and the government to replace old busses and promote infrastructure to reduce emissions from diesel vehicles.

Furthermore, VW has also settled with 44 U.S. states including Puerto Rico and the District of Columbia for $600 million bringing the total settlement amount to $15.3 billion.

Categories: Entrepreneurship, HR & Organization, Regulations & Legal, Strategy


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