The time that Volkswagen has been marshalling all of billions of dollars for is at hand as the automaker agreed to a plan with the federal and California state officials buy back or repair 500,000 diesel-powered cars.
Reached with the Environmental Protection Agency as well as California and signed off on by the federal judge overseeing the process, the deal includes “substantial compensation” for owners of the vehicles powered by the maker’s 2.0-liter clean diesel engines.
Consumers will be allowed to sell their vehicles back to Volkswagen or get repairs, said U.S. District Judge Charles Breyer. Financial details of the offer were not disclosed as they are still being finalized.
While approving the deal, Breyer issued a gag order and chastised those responsible for leaking details of the deal early, which included suggested payments of $5,000 in compensation totaling some $1 billion for some VW owners.
(VW offering $1 billion to U.S. diesel owners. For more, Click Here.)
Breyer said that former FBI director Robert Mueller, who was appointed to pursue a settlement, had reached an agreement with all the major parties, according to USA Today.
“There is definite momentum to resolving these issues,” he said.
In addition to reimbursing vehicle owners, VW will also be required to invest funds to “promote green automotive” initiatives and establish an environmental remediation fund to offset the years of cars putting out nitrogen oxide emissions at harmful levels, the judge said.
(For more on Judge Breyer’s decision to delay VW’s deadline, Click Here.)
The Federal Trade Commission is also expected to support the deal, according to one Justice Department official. The agency sued the German automaker for its “clean diesel” ad campaign, claiming it was highly deceptive.
Breyer set a June 21 deadline for filing preliminary proposals on the settlement. The public will have the opportunity to offer comment on the deal before he approves it. The agreement helps Volkswagen avoid a trial over the emissions violations and economic losses to consumers.
“Volkswagen is committed to earning back the trust of its customers, dealers, regulators and the American public,” the automaker said in a statement. “These agreements in principle are an important step on the road to making things right.
(VW slashing manager bonuses in wake of diesel scandal. For more, Click Here.)
“Volkswagen intends to compensate its customers fully and to remediate any impact on the environment from excess diesel emissions. As noted today in court, customers in the United States do not need to take any action at this time.”