VW to pay $1.2 billion or more to US owners of big diesels

VW to pay $1.2 billion or more to US owners of big diesels

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.

And the German automaker could pay even more — as much as $4 billion — if it can’t repair many of the cars in a way that satisfies regulators.

The proposed settlement filed late Tuesday before Judge Charles R. Breyer in U.S. District Court in San Francisco covers owners of some 78,000 Audi, Volkswagen and Porsche cars with 3.0-litre diesel engines.

Volkswagen has already agreed on a $15 billion settlement for some 500,000 smaller, 2.0-litre diesel engines.

With the settlements for both small and large engines, “all of our customers with affected vehicles in the United States will have a resolution available to them,” Hinrich J. Woebcken, head of Volkswagen Group of America, said in a statement. “We will continue to work to earn back the trust of all our stakeholders.”

Under Tuesday’s proposed class action settlement, owners of 20,000 older models dating back to 2009-2012, which cannot be fixed to meet pollution standards, will be offered buybacks or trade-ins. In addition, they will be paid compensation ranging from $7,755 to $13,880, according to a statement from owners’ attorneys.

People who bought 58,000 newer cars from model years 2013-16, which can be fixed, will get compensation of $7,039 to $16,114. Volkswagen says those cars can be made to comply with pollution limits, while older models cannot.

VW’s proposed repair must win approval from U.S. environmental authorities by an agreed deadline. If not, buybacks could push the cost as high as the $4.04 billion laid out in court documents.

The deal must still get court approval to take effect. Volkswagen said final approval would take at least until May.

Also Tuesday, parts supplier Robert Bosch GmbH agreed to pay $327.5 million to settle claims from consumers and dealers of used vehicles regarding 2.0-litre and 3.0-litre engines, while not accepting it was at fault.

CEO Volkmar Denner said the company settled so it could focus on its business activities. “We wish to devote our attention and our resources to the transition in mobility and in other areas of activity,” Denner said in a statement.

Wolfsburg-based Volkswagen has admitted it equipped diesel engines with software that detected when the vehicle was being tested and turned the emissions controls off during every day 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.

The proposed civil diesel settlements help put the scandal behind the company, after it agreed to plead guilty and pay $4.3 billion to settle U.S. criminal issues. But legal issues remain for Volkswagen’s former CEO, Martin Winterkorn, and 36 others who are under criminal investigation in Germany. U.S. prosecutors have criminally charged seven former Volkswagen employees.

Investors in Germany are suing the company, saying management didn’t inform them of the problem in a timely way. Volkswagen shares plunged after the scandal broke in Sept. 2015.

The company’s reputation has taken a beating since U.S. authorities revealed the cheating. 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.

David McHugh, The Associated Press