VW emissions settlement approved
US District Judge Charles Breyer has approved the $1.7 billion settlement between Volkswagen AG and its American dealers over its long-running diesel emission scandal. The 651 VW dealers will receive an average payout of $2.5 million, which Breyer says “adequately and fairly compensates” the members of the class-action suit. In September 2015, a VW spokesperson admitted to installing secret software in the company's diesel cars to cheat exhaust emissions tests, when the vehicles actually emitted up to 40 times the legally allowable pollution levels. Dealers argued that the fall-out from the scandal tarnished the Volkswagen brand and cost billions nationwide in sales. Vice-president and director of economics services for Fontana Group Edward Stockton estimated the lost profit from the American dealers to be within the range of $2 billion to $2.2 billion, a figure Breyer accepted in his verdict. Seven dealerships opted out of the settlement, and eight dealerships filed objections to the final ruling, mostly related to the method of calculating the average settlement amount. An agreement has also been made to maintain incentive payments to dealers and will allow them to defer capital improvements for two years. Over $30 billion has been spent addressing claims from environmental regulators, owners, dealers and state government bodies related to its fraudulent vehicle emissions in the US. As well as a cash payment to dealers totalling $1.7 billion, the settlement also includes support payments of $270 million and ongoing VIP and continued sales incentives of $238 million. The class counsel estimates the settlement value at over $2.3 billion. "The Volkswagen-branded franchise dealer class-action settlement finalised today represents an outstanding result for Volkswagen’s affected franchise dealers," said Steve Berman, managing partner of Hagens Berman and lead attorney for the dealers, who said they were “blindsided” by VW’s fraud. The ruling states that any responses must be filed by February 8.
