Volkswagen Reaches Deal With U.S. Over Diesel-Emissions Scandal

Volkswagen will offer consumers the option of having their vehicles bought back or modified to meet emissions standards. ENLARGE
Volkswagen will offer consumers the option of having their vehicles bought back or modified to meet emissions standards. Photo: European Pressphoto Agency

Relief is on the way for U.S. drivers of nearly 500,000 Volkswagen AG 2-liter diesel vehicles equipped with devices meant to trick emissions tests.

A San Francisco federal judge said Thursday that Volkswagen has reached the broad outlines of a deal with U.S. authorities that includes buybacks of cars and compensation for U.S. drivers. The company didn’t specify the cost of the deal or the specifics of the proposal.

The approximately 80,000 3-liter vehicles equipped with the devices weren’t included as part of the plan.

U.S. District Judge Charles Breyer, who is overseeing the case, said in open court that Volkswagen plans to offer consumers the option of having their vehicles bought back or modified to meet emissions standards. Those with leased cars can cancel the lease. “Substantial compensation” on top of the buyback or fix will also be awarded to consumers, Judge Breyer said.

The deal comes as part of litigation consolidating more than 500 federal lawsuits filed against Volkswagen in the wake of its September admission that it knew its diesel vehicles weren’t as “green” as advertised and were violating pollution laws. Some 11 million vehicles are affected world-wide.

Judge Breyer, who is overseeing the case, has pressured Volkswagen since February to produce a fix for the cars. Judge Breyer made it clear last month that if no solution was offered by this week, he would consider a request by the plaintiffs to set a summer trial. An attorney for Volkswagen said at the time that engineers were working around the clock on a fix.

A bevy of U.S. authorities have put pressure on the company, including the U.S. Justice Department, Environmental Protection Agency, Federal Trade Commission and California Air Resources Board.

The mushrooming fallout from the scandal has cost Volkswagen’s chief executive and top U.S. manager their jobs and led to plunging U.S. sales. Dealers have been left with expensive inventory they are unable to unload, and some have sued, alleging that Volkswagen defrauded them.

Volkswagen for years touted its diesel line as environmentally friendly vehicles with good fuel economy. The FTC sued the company for false advertising last month, pointing to alleged misleading taglines like “Diesel. It’s no longer a dirty word,” and “Green has never felt so right.”

The company continues to face a criminal probe in the U.S. and litigation abroad.

Write to Sara Randazzo at [email protected]


WSJ.com: US Business

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