VW's European Customers May Miss Out on Emissions Settlement--Update
June 28 2016 - 10:43AM
Dow Jones News
By William Boston
BERLIN--European owners of nearly three million tainted
Volkswagen AG cars may go empty-handed despite the agreement in the
U.S. on a near $15 billion settlement to resolve the German auto
maker's emissions-cheating scandal.
Volkswagen, Europe's leading car maker by sales, has agreed to
pay up to $14.7 billion to settle legal emissions-cheating claims
with regulators and owners of nearly 500,000 diesel-powered
vehicles in the U.S.
Under the settlement's terms, detailed in hundreds of pages of
settlement documents filed Tuesday in a San Francisco federal
court, U.S. motorists can either sell back or terminate leases of
affected vehicles, or get them fixed to become compliant with
environmental regulations. Volkswagen will repurchase vehicles at
their September market value before regulators disclosed the auto
maker's emissions-cheating.
All consumers, regardless of their choice, will receive
additional compensation of between $5,100 and nearly $10,000
each.
The U.S. settlement has raised concern in Brussels that the much
larger number of European customers who bought tainted
diesel-powered vehicles from Volkswagen wouldn't receive equal
compensation from the German car maker.
"Volkswagen should voluntarily offer compensation for European
car owners that is comparable to what is being paid to U.S.
consumers," said Elzbieta Bienkowska, European Industry and
Internal Market Commissioner.
Volkswagen has repeatedly said that it sees no reason to
compensate European customers because of differences in U.S. and
European law and environmental standards. Under EU rules, the
company has said, Volkswagen's diesel vehicles don't violate
emissions standards.
It has also said that the vehicles containing the illegal
software can be more easily repaired in Europe. Volkswagen is
recalling nearly three million vehicles in Europe to remove the
defeat devices and make the cars compliant with the law.
Nevertheless, European officials, consumer groups and
plaintiffs' attorneys in say Volkswagen should compensate European
victims to regain customers' trust.
"Consumers have been massively misled by Volkswagen and this
settlement in the U.S. recognizes the damage suffered by car
drivers," said Monique Goyens, general director of the European
Consumer Organization, a Brussels-based consumer lobby. "It is
inconceivable that consumers in the EU get treated
differently."
Volkswagen faces other legal troubles in Europe.
Several lawsuits have been filed in Germany on behalf of
investors, including large pension funds such as Calpers, the
Norwegian state oil fund, and Nordea, a Swedish investment fund.
German courts have yet to rule on allowing class-action suits to go
forward, a stricter process than in the U.S.
In the U.S., the total Volkswagen payout includes up to $10.03
billion to cover legal claims from owners of affected vehicles with
two-liter diesel engines. Volkswagen will also pay $2.7 billion for
an environmental remediation fund, and another $2 billion to be
invested in promoting so-called zero-emission vehicle technology,
court documents show.
--Mike Spector and Sara Randazzo contributed to this
article.
Write to William Boston at william.boston@wsj.com
(END) Dow Jones Newswires
June 28, 2016 10:28 ET (14:28 GMT)
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