U.S. judge approves VW dealers $1.2 bln settlement

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By David Shepardson | WASHINGTON

WASHINGTON Volkswagen AG’s dealers
will receive an average of $1.85 million in a $1.2 billion
settlement approved by a U.S. judge on Monday over its diesel
emissions scandal.

U.S. District Judge Charles Breyer said the 650 U.S. dealers
would be paid over 18 months, ruling the settlement “fair,
reasonable, and adequate.”

VW also agreed to keep making volume-based incentive
payments to dealers, and will allow them to defer capital
improvements for two years. In total, VW has now agreed to spend
up to $22 billion in the United States to address claims from
owners, environmental regulators, U.S. states and dealers
stemming from the excess vehicle emissions.

VW admitted in September 2015 to installing secret software
in its diesel cars to cheat exhaust emissions tests and make
them appear cleaner in testing than they really were. In
reality, the vehicles emitted up to 40 times the legally
allowable pollution levels and dealers say the resulting scandal
tarnished the brand and cost them sales.

VW North American Chief Executive Officer Hinrich Woebcken
said earlier the company believed the agreement with “dealers is
a very important step in our commitment to making things right
for all our stakeholders in the United States.”

Beyond the $1.2 billion cash payments, the settlement is
valued at total of more than $1.6 billion for the VW brand
dealers, said law firm Hagens Berman in a statement. The
settlement includes $270 million through a provision for prior
payments and $175 million in the continued sales incentives.

“The Volkswagen-branded franchise dealer class-action
settlement finalized today represents an outstanding result for
Volkswagen’s affected franchise dealers who, like consumers,
were blindsided by the brazen fraud that VW perpetrated,” said
Steve Berman, managing partner of Hagens Berman and lead
attorney for the dealers.



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