VW has only repurchased/fixed half of the cheating 2.0-litre diesels in the U.S.
VW has reported they’ve bought-back or repaired just over half of the 475,000 cheating 2.0-litre diesel vehicles.
After being caught installing so-called “defeat devices” in over 11 million vehicles worldwide, which allowed some vehicles to pollute 40 times more dangerous NOx than they should have been doing, the German manufacturer has pleaded guilty to fraud, obstruction of justice and falsifying statements as part of a $4.3 billion (£3.4 billion) settlement with the U.S. Justice Department in relation to 475,000 2.0 litre diesel engines.
But it seems to still be slow-going when it comes to resolving the crisis; both over in the States as well as here in the U.K.
The world’s second largest automaker wrote in a letter to the responsible U.S. judge dealing with the settlement that, as of 12th April 2017, they had repurchased or terminated leases on approximately 238,000 vehicles and repaired 6,200.
The 2.0-litre settlement agreement dictates that VW must repurchase or repair 85% of the vehicles as a minimum, and that this must be fulfilled by 2019 or additional penalties will be imposed.
Although the settlement offer wasn’t finalised until November 2016, we’re nearly two years on from the scandal erupting in mainstream media. The rate of repurchasing and repairing of vehicles appears to have been slow. It goes without saying that owners of the 2.0 litre diesel vehicles should be appropriately compensated without delay. However, around half of the 475,000 vehicle owners are still reportedly waiting as of April this year.
VW lawyer Robert Giuffra tried to reassure owners and regulators alike by stating:
“…the company is making every effort to ensure that the process runs as smoothly as possible for affected customers and continues to make improvements to the customer experience.”
In 2016, VW agreed to spend up to $10.03 billion (£7.8 billion) to buy-back the affected 2.0-litre diesels in America. In February 2017 the manufacturer had only spent $2.9 billion (£2.2 billion) on buy-backs, which is only around 20% of what they’ve agreed to put aside. Does this show a lack of commitment on behalf of VW to provide redress to their consumers? At the end of the day, they’re outright refusing compensation here in the U.K. meaning we’re having to take the matter through the courts. Clearly, resolving this issues swiftly isn’t on their priority list in our view…
3.0-litre settlement agreement
On 11th May 2017 a federal judge granted final approval in a separate VW settlement offer for 80,000 3.0-litre vehicles, which included luxury brands Porsche, Audi and VW SUV. In the settlement agreement, VW agreed to buy-back 20,000 of the luxury vehicles.
There were concerns this amount could’ve increased if U.S. regulators didn’t approve VW’s repair strategy. However, U.S. District Judge Charles Breyer said VW would have to pay at least $1.22 billion (£9.6 billion) to buy-back or fix the 3.0-litre vehicles, with vehicle owners who opt-in for the repair set to be receiving compensation of between $7,000 and $16,000 (£5,500 and £12,600).
VW spokeswoman Jeannine Ginivan hailed the success of this settlement saying it “marks an important milestone for VW and means that a resolution is available to all of our customers” with eligible diesels. It’s a shame the same couldn’t be said for the U.K. customers who are being completely ignored by VW as they try to defend the legal actions against them.
Additional penalties and fines
In addition to these settlements, VW has agreed to spend up to $25 billion (£19 billion) in the U.S. to rectify the damage caused. This is to address claims from vehicle owners, environmental regulators, states and dealers, and includes offers for buy-backs of around 500,000 diesel vehicles in the U.S.
There are beady eyes on VW to ensure they comply with what they’ve agreed to. As mentioned above, if they don’t comply with the agreements, they may receive further penalties.
KPMG LLP Director, Stephanie Davis, will be VW’s chief compliance officer. Former Deputy U.S. Attorney General, Larry Thompson, will also serve as an independent monitor of VW for three years under the Justice Department plea agreement.
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