Volkswagen will begin buying back its 2.0L diesel models following approval Tuesday of a $14.7 billion settlement by a federal judge and expects to complete the process by the middle of November.
Volkswagen will begin buying back its 2.0L diesel models following approval Tuesday of a $14.7 billion settlement by a federal judge and expects to complete the process by the middle of November, a spokeswoman told Automotive Fleet.com.
To help manage the process, the automaker will hire 900 people to handle the buybacks, including one at each of its U.S. dealerships, said spokeswoman Jeannine Ginivan.
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Fleet management companies and commercial fleets holding title to a diesel-powered vehicle purchased before Sept. 18, 2015 are eligible for the program. So far, more than 340,000 owners have registered for the program.
Under the terms of the settlement, Volkswagen has agreed to spend $10.033 billion on the buybacks as owner compensation, as well as $4.7 billion on programs that offset emissions, increase zero-emission vehicle infrastructure, and boost ride-sharing, according to documents filed in federal court. U.S. District Judge Charles Breyer approved terms of the settlement on Oct. 25.
"Final approval of the 2.0L TDI settlement is an important milestone in our journey to making things right in the U.S., and we appreciate the efforts of all parties involved in this process," said Hinrich Woebcken, president and CEO of Volkswagen Group of America, Inc. "Volkswagen is committed to ensuring that the program is now carried out as seamlessly as possible for our affected customers and has devoted significant resources and personnel to making their experience a positive one."
The settlement covers about 475,000 Volkswagen AG vehicles sold in the U.S. with a 2.0L four-cylinder TDI, including 460,000 VW vehicles and 15,000 Audi vehicles. The vehicles were equipped with "defeat device" software that undermined emissions testing.
Volkswagen may be able to repair affected vehicles, but it would still need to gain approval from regulators on the fix.
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The company has also agreed to compensate 652 U.S. dealers to the tune of $1.21 billion and $603 million to settle state consumer protection claims in 44 states.
Observers said the settlement will help the embattled company move forward.
“This is a massive step forward in Volkswagen’s efforts to put its diesel emissions issue to bed," said Karl Brauer, senior analyst for Kelley Blue Book. "The combination of customer repair/buyback options, plus the additional monetary compensation these owners will receive, should cover any losses TDI owners would have suffered from the cars’ drop in market value."
Volkswagen must still reach a settlement for about 85,000 vehicles powered by a 3.0L six-cylinder.
To read the full consent decree click here. To read the FTC order, click here.
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