VW to spend $1.2B more to fix or buy back diesels

Keith Laing
Detroit News Washington Bureau

Washington — Volkswagen AG and Volkswagen Group of America Inc. have agreed to spend $1.2 billion to fix or buy back approximately 78,000 additional diesel vehicles rigged to cheat U.S. emission standards and boost federal spending on environmental protections.

The deal, presented to U.S. District Judge Charles Breyer in a San Francisco court hearing in December, covers 3-liter diesel cars not included in an earlier $14.7 billion settlement between Volkswagen and U.S. regulators covering about 475,000 2-liter diesel vehicles.

Under the agreement, Volkswagen will fix approximately 58,000 affected 2013-2016 Model Year Volkswagen, Audi and Porsche 3.0L TDI V6 vehicles and buy back another 20,000 eligible 2009-2012 model year Volkswagen and Audi 3.0L TDI V6 vehicles.

The new agreement also calls for Volkswagen to put another $225 million into a federal environmental mitigation trust fund, in addition to the $2.7 billion the German automaker was required to pay into the fund under the previous 2-liter deal. VW has also agreed to a separate settlement with California that requires it to pay $25 million to the California Air Resources Board to support efforts to boost the use of zero-emissions vehicles by July 1.

“With the Court-approved 2.0L TDI program well under way and now this proposed 3.0L TDI program, all of our customers with affected vehicles in the United States will have a resolution available to them,” Hinrich J. Woebcken, president and CEO of Volkswagen Group of America, Inc., said in a statement. “We will continue to work to earn back the trust of all our stakeholders and thank our customers and dealers for their continued patience as this process moves forward.”

The new agreement covers the following vehicles:

■2009-2012 Volkswagen Touaregs

■2009-2012 Audi Q7s

■2013-2016 Volkswagen Touaregs

■2013-2015 Audi Q7s

■2014-2016 Audi A6, A7, A8, A8L, Q5s

■2013-2016 Porsche Cayenne Diesels

Volkswagen has been under fire with U.S. regulators since the company admitted to programming its diesel cars to trick emissions testers into believing the engines released far less pollution into the air than they actually do, in violation of the federal Clean Air Act. Regulators have said that in normal driving they emitted up to 40 times more smog-causing nitrogen oxide than the legal limit.

The 3-liter agreement follows an earlier settlement that calls for Volkswagen to spend about $10 billion to fix or buy back about 475,000 polluting 2-liter vehicles as a part of a $14.7 billion deal between regulators and the beleaguered German automakers. Under that earlier agreement, Volkswagen will compensate owners who purchased 2.0-liter diesels before September 2015 with payments of $5,100 to $10,000, depending on the age of the car.

The U.S. government has also indicted six present and former Volkswagen executives and charged the company with three criminal felony counts for what regulators called a “10-year conspiracy” to rig hundreds of thousands of diesel cars to cheat U.S. emission standards. Volkswagen is also being forced to pay $2.8 billion in criminal fines and $1.5 billion in civil penalties related to the fraud.

The beleaguered German automaker was first accused by the EPA in September 2015 of selling diesels for years with software that activated required air pollution equipment only during emissions tests. They had been marketed as “clean diesels” for the company’s Volkswagen, Audi and Porsche brands between 2008 and 2015.


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Twitter: @Keith_Laing