German car maker Volkswagen
will be forking out more than $ 15 billion in a proposed settlement programme
in the US in a bid to contain the mess created by a major diesel emissions
related scam that rocked the company and its cars sold in several countries
across the globe, including India.
Volkswagen AG announced on
June 28, 2016 that it has reached settlement agreements with the United States
Department of Justice (DOJ) and the State of California; the U.S. Federal Trade
Commission (FTC); and private plaintiffs represented by the Plaintiffs'
Steering Committee (PSC) to resolve civil claims regarding eligible Volkswagen
and Audi 2.0L TDI diesel engine vehicles in the United States.
Of approximately 499,000 2.0L
TDL vehicles that were produced for sale in the United States, approximately
460,000 Volkswagen and 15,000 Audi vehicles are currently in use and eligible
for buybacks and lease terminations or emissions modifications, if approved by
regulators. Volkswagen will establish a maximum funding pool for the 2.0L TDI
settlement program of $10.033 billion. That amount assumes 100% participation
and that 100% of eligible customers choose a buyback or lease termination.
The company stated that the proposed settlement programme includes vehicle buybacks and lease terminations, emissions modifications (if approved) and cash payments to affected customers for approximately 475,000 eligible 2.0L TDI vehicles. “Volkswagen agrees to $2.7 billion environmental remediation fund and to invest $2.0 billion in initiatives to promote the use of zero emissions vehicles in the U.S...,” the company stated. Volkswagen also announced that it has agreed with the attorneys general of 44 U.S. states, the District of Columbia and Puerto Rico to resolve existing and potential state consumer protection claims related to the diesel matter for a total settlement amount of approximately $603 million.
"We take our commitment
to make things right very seriously and believe these agreements are a
significant step forward," said Matthias Müller, Chief Executive Officer
of Volkswagen AG. "We appreciate the constructive engagement of all the
parties, and are very grateful to our customers for their continued patience as
the settlement approval process moves ahead. We know that we still have a great
deal of work to do to earn back the trust of the American people. We are
focused on resolving the outstanding issues and building a better company that
can shape the future of integrated, sustainable mobility for our customers,"
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