FRANKFURT – Volkswagen has agreed to pay at least $1.2 billion in buybacks and compensation to settle claims from U.S. owners of cars with larger diesel engines that the company rigged to cheat on emissions tests.
The proposed settlement filed late Tuesday in U.S. District Court in San Francisco covers owners of some 75,000 Audi, Volkswagen and Porsche cars with 3.0-litre diesel engines.
READ MORE: Volkswagen emissions scandal: 6 employees indicted, company will pay $4.3B
Volkswagen has already agreed on a $15 billion settlement for some 500,000 smaller, 2.0 litre diesel engines.
Under Tuesday’s proposed class action settlement, owners of older models from 2009-2012, which cannot be fixed to meet pollution standards, will be offered buybacks or trade-ins plus compensation ranging from $7,755 to $13,880, according to a statement from owners’ attorneys.
WATCH: Judge approves Volkswagen nearly $15B settlement following emissions scandal
People with newer cars from model years 2013-16, which can be fixed, will get compensation of $7,039 to $16,114.
Get weekly money news
That’s if VW can come up with a fix approved by U.S. environmental authorities by an agreed deadline. If not, buybacks could push the cost as high as $4.04 billion.
READ MORE: Volkswagen agrees to settle $2-billion class action suit
Parts supplier Bosch also agreed to pay $327.5 million under the settlement proposal. The deal must still get court approval to take effect.
The Wolfsburg-based automaker has admitted it equipped diesel engines with software that detected when the vehicle was being tested and turned the emissions controls off during everyday driving. The result was cars that emitted some 40 times the U.S. limits of nitrogen oxides, a pollutant that can harm people’s health. Some 11 million cars worldwide have the deceptive software.
WATCH: Volkswagen owners can sell back or repair vehicle following settlement from automaker
The civil diesel settlement deals help put one chapter in the scandal behind the company. But it still faces numerous legal problems. Volkswagen’s former CEO, Martin Winterkorn, and 36 others are under criminal investigation in Germany. U.S. prosecutors have criminally charged seven former Volkswagen employees and the company has agreed to plead guilty and pay $4.3 billion in fines.
READ MORE: Volkswagen to slash 30,000 jobs after emissions scandal
Investors in Germany are suing, saying management didn’t inform them of the problem in a timely way. Volkswagen shares plunged after the scandal broke.
The company’s reputation has taken a beating since U.S. authorities revealed the cheating in September 2015. But that didn’t stop VW from passing Toyota last year to become the world’s largest carmaker by sales. Booming sales in China helped Volkswagen win the sales crown with 10.3 million vehicles sold to 10.2 million for Toyota.
Comments