Judge Charles Breyer has confirmed that Volkswagen's $10 billion-plus plan to resolve claims by the U.S. government and lawsuits by American car owners over its pollution-cheating debacle has been 'agreed in principle' by the Justice Department and various other US agencies. The plan covers at least 480,000 cars in the US and over 600 lawsuits offering consumers flexibility including buybacks and "substantial compensation."
- *JUDGE BREYER SAYS VW, U.S. PARTIES HAVE AGREEMENT IN PRINCIPLE
- *BREYER COMMENDS 'DEFINITE MOMENTUM' IN RESOLVING MATTER
- *JUDGE EMPHASIZES CONTINUED NEED FOR CONFIDENTIALITY IN TALKS
- *JUDGE ASKING FOR PUBLIC TO WAIT FOR FINAL SETTLEMENT
As Bloomberg reports,
Volkswagen AG has reached an agreement in principle with U.S. regulators and car owners as it struggles to contain the damage from its emissions-cheating scandal.
The automaker negotiated the plan for at least 480,000 affected vehicles in the U.S. with environmental regulators after a federal judge who’s overseeing more than 600 lawsuits said that fixing the polluting cars or getting them off the road has to be the first step in resolving the consolidated cases.
Further headlines have emerged:
- *VW DIESEL JUDGE SAYS HE'S PLEASED PARTIES HAVE CONCRETE PLAN
- *BREYER SAYS ACCORD GIVES CONSUMERS OPTIONS INCLUDING BUYBACKS
- *PLAN AFFECTS MOST CARS, ALSO ALLOWS FOR LEASE RETURNS: JUDGE
- *VW JUDGE SAYS EMISSIONS DEAL OFFERS 'SUBSTANTIAL COMPENSATION'
- *BREYER SAYS FUND WILL BE SET UP FOR REMEDIATION EFFORT
- *JUSTICE DEPT., GOVERNMENT AGENCIES HAVE SIGNED OFF ON DEAL
- *VW ATTORNEY SAYS COMPANY WANTS TO WIN BACK CUSTOMER CONFIDENCE
- *JUDGE SETS JUNE 21 DEADLINE FOR PARTIES TO FINE-TUNE AGREEMENT
- *JUDGE SAYS ACCORD DOESN'T RESOLVE ISSUES WITH 3-LITER ENGINES
Crucially however:
- *SETTLEMENT ALSO DOESN'T ADDRESS FINES, PENALTIES, JUDGE SAYS
As Bloomberg detailed previously,
The parties reached the accord ahead of a Thursday deadline set by a federal judge for the carmaker to say how it would fix the vehicles. Volkswagen has been negotiating with U.S. environmental regulators on an acceptable solution. Judge Charles Breyer said that fixing the almost 600,000 vehicles or getting them off the road would be the first step to any settlement. The stock rose as much as 7.5 percent in Frankfurt.
An agreement with U.S. authorities would be a milestone for Volkswagen as it seeks to emerge from the seven-month-old scandal. The German carmaker has been battling to appease regulators and regain customers’ trust after admitting in September that it rigged the exhaust systems of 11 million diesel-powered cars worldwide to pass official emissions tests. The crisis led to the departure of Chief Executive Officer Martin Winterkorn and caused Volkswagen to delay releasing its 2015 earnings due to uncertainty over the costs of the scandal.
“A far-reaching agreement covering the vast majority of potential financial impacts from the U.S. market would clearly be positive news for VW as this would clearly reduce uncertainty for the future,” Marc-Rene Tonn, an analyst with Warburg Research, said in a note.
Meanwhile, the German regulator is sniffing around. According to Reuters, the German financial watchdog Bafin has started a routine review of the sharp price rise in Volkswagen shares on Wednesday and Thursday, a Bafin spokeswoman said.
Bafin would check for insider trading and also for possible violations of regulations on public disclosure announcements, the spokeswoman told Reuters. VW shares rose by 6.6 percent on Wednesday and by around 6 percent on Thursday, helped by speculation the company would reach a less costly than expected agreement with U.S. regulators in an emissions rigging scandal.
* * *
It appears, Volkswagen needs to "spend" a little more to ensure its immunity.
So now we know the cost of a decade of deception.