Volkswagen of America and Bosch are announcing details about plans to settle civil complaints in the United States over the polluting diesel engines in models from VW, Audi and Porsche. Final court approval could come during a hearing on February 14, and if the judge accepts the deals, it could cost the firms a total roughly $1.6 billion.
VW’s proposed plan for the court includes buybacks or repairs for 78,000 vehicles with its 3.0-liter TDI V6 engine, and the firm estimates this would cost $1.2 billion. Under this strategy, the company would recall 58,000 vehicles from the 2013 to 2016 model years and revise their emissions systems to be compliant. In addition, the automaker would repurchase or terminate the leases for 20,000 examples for the Volkswagen Touareg and Audi Q7 from 2009 through 2012.
According to Automotive News Europe, owners would receive $7,000 and $16,000 for fixing their vehicle, and they would get an extra $500 if the repair turns out to affect the performance. People who go for the buyback receive $7,500 in addition to the model’s value.
VW faces pressure to find a fix for the 58,000 vehicles that it’s not buying back. If the government does approve the company’s proposed repair, then the costs could balloon to $4.04 billion, according to Automotive News Europe.
Bosch’s settlement amounts to $327.5 million. The firm supplied the engine control software for VW’s 2.0-liter four-cylinder and 3.0-liter V6 diesels. A lawsuit alleged that the company somehow had a role in the emissions cheating. “By entering into the settlement, Bosch neither acknowledges the facts as alleged by the plaintiffs nor does Bosch accept any liability,” the business said in a statement.
According to Automotive News Europe, owners of the models with the 2.0-liter would receive $350 each. Those with the 3.0-liter can expect $1,500.
If the court accepts this settlement, it would actually be rather small by the standards of VW’s other Dieselgate payouts. For example, the company settled its issues with the 2.0-liter engine for $14.7 billion, including a $10.033 billion buyback campaign. The company also pleaded guilty to felony charges, which added another $4.3 billion to the scandal’s cost. Coming to terms with dealers cost another $1.2 billion.
Source: Automotive News Europe, Volkswagen, Bosch
VOLKSWAGEN REACHES SETTLEMENT AGREEMENTS WITH PRIVATE PLAINTIFFS AND U.S. FEDERAL TRADE COMMISSION ON 3.0L TDI V6 VEHICLES IN THE UNITED STATES
Feb 1, 2017
Program, if approved, would include provisions to recall and repair most affected vehicles.
Options for older affected vehicles include buybacks or trade-in credits, or lease termination.
All eligible owners and lessees of affected vehicles will receive cash payments.
Herndon, VA (February 1, 2017) – Volkswagen AG and Volkswagen Group of America, Inc. (together, Volkswagen) announced today that they have reached proposed agreements to resolve outstanding civil claims regarding approximately 78,000 affected 3.0L TDI V6 diesel engine vehicles in the United States.
Two agreements have been submitted to the Court for approval: (1) a proposed class settlement with private plaintiffs represented by a Court-appointed Plaintiffs’ Steering Committee (PSC) on behalf of a nationwide class of current and certain former owners and lessees of eligible 3.0L TDI V6 vehicles; and (2) a proposed Consent Order submitted by the U.S. Federal Trade Commission (FTC).
“With the Court-approved 2.0L TDI program well under way and now this proposed 3.0L TDI program, all of our customers with affected vehicles in the United States will have a resolution available to them. We will continue to work to earn back the trust of all our stakeholders and thank our customers and dealers for their continued patience as this process moves forward,” said Hinrich J. Woebcken, President and CEO of Volkswagen Group of America, Inc.
Proposed 3.0L TDI Settlement Program
Under the 3.0L TDI settlement program, Volkswagen has agreed, among other terms, to provide cash payments to all eligible members of the class, and take the following specific actions:
Recall and repair, free of charge to the customer, approximately 58,000 affected 2013-2016 Model Year Volkswagen, Audi and Porsche 3.0L TDI V6 vehicles (so-called Generation 2 vehicles) to bring them into compliance with the emissions standards to which they were originally certified, if an appropriate Emissions Compliant Repair is approved by U.S. regulators.
Buy back or offer trade-in credit of equal value for, or terminate the leases of, approximately 20,000 eligible 2009-2012 Model Year Volkswagen and Audi 3.0L TDI V6 vehicles (so-called Generation 1 vehicles) or, if approved by U.S. regulators, modify the vehicles to substantially reduce their nitrogen oxide (NOx) emissions so as to allow eligible owners and lessees to keep them.
Volkswagen has agreed to pay up to approximately $1.2 billion in benefits for the 3.0L TDI settlement program, assuming 100% participation in the program, a 100% buyback of all eligible Generation 1 vehicles and availability of an Emissions Compliant Repair for Generation 2 vehicles. Volkswagen expects to be able to bring affected Generation 2 vehicles to the same emissions standards to which the vehicles were originally certified.
Volkswagen will begin the 3.0L TDI settlement program as soon as the Court grants final approval to the settlement agreements. At the earliest, approval will occur in May 2017.
Potential claimants under the class settlement do not need to take any action at this time. Individual class members will receive extensive notification of their rights and options (including the option to “opt out” of the settlement agreement) if the Court grants preliminary approval of the proposed class settlement at a hearing scheduled to take place on February 14, 2017. More information about the proposed 3.0L TDI settlement program can be found at www.VWCourtSettlement.com.
Notes to Editors
The proposed settlement applies to all 3.0L TDI V6 diesel engine vehicles that Volkswagen, Audi, or Porsche marketed or sold in the United States for Model Years 2009 through 2016. The vehicles are divided into two generations, as follows:
Generation 1 Vehicles
Generation 2 Vehicles
Audi A6, A7, A8, A8L, Q5
Porsche Cayenne Diesel
If Volkswagen is unable to obtain a timely approved Emissions Compliant Repair for eligible Generation 2 vehicles, it will offer to buy back or provide trade-in credit of equal value for, or terminate the leases of, eligible Generation 2 vehicles and may also seek approval by U.S. regulators to offer customers a modification to substantially reduce their NOx emissions.
The 3.0L TDI settlement program also includes a proposed Consent Decree reached with the U.S. Department of Justice (DOJ) on behalf of the Environmental Protection Agency (EPA) and a proposed agreement with the State of Califonia by and through the California Air Resources Board (CARB) and the California Attorney General on December 20, 2016. The program is subject to the approval of Judge Charles R. Breyer of the United States District Court for the Northern District of California, who presides over federal Multi-District Litigation (MDL) proceedings related to the diesel matter.
As announced previously, under its proposed Consent Decree with the DOJ, Volkswagen will contribute $225 million to the environmental remediation trust that is being established under Volkswagen’s 2.0L TDI settlement program in the United States to fully mitigate the excess, lifetime NOx emissions of the affected 3.0L TDI V6 vehicles. As part of its agreement with the State of California, Volkswagen will also pay $25 million to CARB to support the use of zero emissions vehicles (ZEVs) in the State.
By their terms, the proposed agreements announced today are not intended to apply to or affect Volkswagen’s obligations under the laws or regulations of any jurisdiction outside the United States. Regulations governing NOx emissions limits for vehicles in the United States are much stricter than those in other parts of the world and the engine variants also differ significantly. This makes the development of technical solutions in the United States more challenging than in Europe and other parts of the world.
Volkswagen in the United States
Volkswagen Group of America (VWGoA), a wholly owned subsidiary of Volkswagen AG, employs more than 6,000 people in the United States and supports more than 1,000 dealer locations in all 50 states. Volkswagen has more than 60 years of history in the United States, where VWGoA maintains more than 30 U.S. locations including a LEED Platinum-certified manufacturing facility in Chattanooga, Tennessee.
The Chattanooga facility employs more than 2,500 people and supports suppliers who provide some 9,200 jobs. The facility produces the Volkswagen Passat and has recently expanded to accommodate production of a new, seven-passenger midsize SUV, the Volkswagen Atlas. Volkswagen is investing $900 million to expand its U.S. manufacturing footprint through production of the new SUV as part of Volkswagen AG’s plan to invest more than $7 billion in North America from 2015 through 2019.
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Bosch reaches settlement agreement for diesel vehicles in the U.S.
Agreement on 2.0L and 3.0L engine Volkswagen, Audi and Porsche vehicles
Settlement of the claims of consumers and dealers in used VW vehicles
Payment of USD 327.5 million
No acknowledgement of the alleged facts, no acceptance of any liability
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Stuttgart / San Francisco – Bosch has entered into a settlement agreement with civil claimants in the U.S. in order to settle the most substantial part of the civil law proceedings pending in connection with Volkswagen, Audi and Porsche diesel vehicles that were sold in the U.S. The corresponding documents have been filed overnight with the competent U.S. court, the United States District Court for the Northern District of California. The settlement agreement was concluded with the Plaintiffs’ Steering Committee (“PSC”) on behalf of proposed settlement classes.
The agreement would settle the claims of consumers and dealers of used vehicles against Robert Bosch GmbH, its affiliates, employees, and directors concerning Volkswagen and Audi diesel vehicles with 2.0L engines for model years 2009 through 2015 and Volkswagen, Audi, and Porsche diesel vehicles with 3.0L engines for model years 2009 through 2016. For this purpose, Bosch will pay a total amount of USD 327.5 million (approx. EUR 304 million). By entering into the settlement, Bosch neither acknowledges the facts as alleged by the plaintiffs nor does Bosch accept any liability.
“Upon careful consideration of all relevant aspects, we have in this case decided to enter into a settlement agreement. Bosch is currently undergoing the biggest transformation process in its company history. We wish to devote our attention and our resources to the transition in mobility and in other areas of activity”, said Dr. Volkmar Denner, Chairman of the Management Board of Robert Bosch GmbH.
The settlement agreement now reached requires the approval by Judge Charles R. Breyer, who conducts the nationwide multi-district proceedings in which numerous civil law actions have been combined. In a hearing scheduled for 14 February 2017, the Court will consider to grant preliminary approval of the settlement agreement. The class members will then be informed of their rights and options. It is proposed that the Court considers final approval of the settlement agreement in early May.
The settlement agreement concerns only civil law claims. As it has done since allegations have first been made public, Bosch will continue to defend its interests in all other civil and criminal law proceedings and to cooperate comprehensively with the investigating authorities in Germany and in other countries.