Wednesday, 29 June 2016
VW settles over 2-litre diesel claims
Volkswagen AG has reached settlement agreements with the United States Department of Justice (DOJ) and the State of California; the US Federal Trade Commission (FTC); and private plaintiffs represented by the Plaintiffs' Steering Committee (PSC) to resolve civil claims regarding eligible Volkswagen and Audi 2-litre TDI diesel engine vehicles in the US.Of approximately 499,000 2-litre TDL vehicles produced for sale in the US, approximately 460,000 Volkswagen and 15,000 Audi vehicles are currently in use and eligible for buybacks and lease terminations or emissions modifications, if approved by regulators.
VW will establish a maximum funding pool for the 2-litre TDI settlement program of $10.033 billion. That amount assumes 100per cent participation and that 100per cent of eligible customers choose a buyback or lease termination.
The agreements covering the proposed 2-litre TDI settlement program are subject to the approval of Judge Charles R. Breyer of the United States District Court for the Northern District of California, who presides over the federal Multi-District Litigation (MDL) proceedings related to the diesel matter.
VW announced also that it has agreed with the attorneys general of 44 US states, the District of Columbia and Puerto Rico to resolve existing and potential state consumer protection claims related to the diesel matter for a total settlement amount of approximately $603 million.
"We take our commitment to make things right very seriously and believe these agreements are a significant step forward," said Matthias Müller, chief executive officer of Volkswagen AG. "We appreciate the constructive engagement of all the parties, and are very grateful to our customers for their continued patience as the settlement approval process moves ahead. We know that we still have a great deal of work to do to earn back the trust of the American people. We are focused on resolving the outstanding issues and building a better company that can shape the future of integrated, sustainable mobility for our customers."
Three agreements have been submitted to the Court for its approval with respect to the proposed 2-litre TDI settlement program: (1) a Consent Decree filed with the Court by the DOJ on behalf of the Environmental Protection Agency (EPA) and by the State of California by and through the California Air Resources Board (CARB) and the California Attorney General; (2) a Consent Order submitted by the FTC; and (3) a proposed class settlement agreement with the PSC on behalf of a nationwide settlement class of current and certain former owners and lessees of eligible 2-litre TDI Volkswagen and Audi vehicles.
The parties believe that the class settlement as presented to the Court will provide a fair and reasonable resolution for affected Volkswagen and Audi customers.
VW says it continues to work expeditiously to reach an agreed resolution for affected vehicles with 3-litre TDI V-6 diesel engines.
On April 22, 2016, Volkswagen recognized total exceptional charges of €16.2 billion in its financial statements for 2015 for worldwide provisions related to technical modifications and repurchases, legal risks and other items as a result of the diesel matter. As noted at that time, due to the complexities and legal uncertainties associated with resolving the diesel matter, a future assessment of the risks may be different.