US Government "Agrees In Principle" With Volkswagen's $10 Billion-plus 'Sorry-We-Cheated' Compensation Plan

Tyler Durden's picture

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.

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Secret Weapon's picture

Just a shakedown by the organized crime family in D.C.

TradingIsLifeBrah's picture
TradingIsLifeBrah (not verified) Secret Weapon Apr 21, 2016 11:27 AM

Every manufacturer cheats on the emissions.  I read in one article about how the manufacturers take the seats out of the car to make it lighter, essentially they just have a shell of a car running to pass the emissions test.  The car that hits the road looks nothing like the one that is put through government test, so what is the point of the test?

Ivanka2032's picture
Ivanka2032 (not verified) TradingIsLifeBrah Apr 21, 2016 11:32 AM

So the $10 billion, I presume, is gonna go towards construction of the Obama Presidential Library in Pearl Harbor as reparations for the Germans having bombed it?

Cognitive Dissonance's picture

I seriously considered buying a VW Diesel. I even rented one for an extended test drive. Does that 'entitle' me to stacks of cash?

Ivanka2032's picture

If they could figure a way to make a decent truck using of those engines, I'd get one.

steelhead23's picture

They do, but due to the "chicken tax" it would be cost prohibitive to import - then of course, you have a minor issue with NOX.

LowerSlowerDelaware_LSD's picture
LowerSlowerDelaware_LSD (not verified) steelhead23 Apr 21, 2016 3:29 PM

Any company who cheats on the cheating U.S. gubmint deserves my support.  Buy Volkswagens!!!

Lorca's Novena's picture

My exact sentiments. Props to das Volkswagen for saying FU to the environazis. Everyone knows that these nonsensical smog checks every couple years are only a hidden car tax.

Ignatius's picture

I actually own one, CD.  A 2011 Jetta.  We should get together sometime so I can share an extra dose of nitrous oxide, of which, I'm told, I have plenty.

Great mileage (43 MPG), and still emits less than monster SUVs.

Cognitive Dissonance's picture

LOLOLOLOLOLOLOLOLOLOL

Can't stop laughing here. I must have gotten a whiff of your odorific emanations. :-)

Ivanka2032's picture

It's been awhile, but I lived in Italy for over a decade & my friend had a (can't remember, something like 2000-2002 model Passat TD)...

 

We used to play in golf tournaments together so we drove all over the place... Not only could that thing MOVE, but it never fucking ran out of gas!

Is this name taken's picture

Of course, it doesn't actually run ON gas!! ;-)

Ignatius's picture

Stop, you're killing a great sales pitch:

"It NEVER runs out of gas!!"

KnuckleDragger-X's picture

The problem is the EPA has made the standards so restrictive, that the only way to pass is to cheat. If we were still using the standards from 10 years ago, they would pass without cheating.......

Crash Overide's picture

So why can't we have the 100+MPG VW engines in the US again?

Ignatius's picture

When .gov reached a settlement with Big Tobacco, how much of those billions do you suppose went to the smokers who had been duped, you know, to help them (the real victims) quit smoking?  Right, zero.  A big fat donut hole.  Hailed as a "breakthrough" settlement, it was, a breakthrough in fraud not to be excedded until the '08 bankster subprime housing debacle.

Cognitive Dissonance's picture

And the best part was that most of the money paid in 'compensation' was to be collected from smokers via cigarette taxes over the next several decades.

Brilliant.

Sort of like screwing the unborn with an inheritance of unsustainable debt.

KnuckleDragger-X's picture

Look at all the states collecting it, and you'll notice that they barely give a fig leaf worth of cover to their promises. This is our brave new world, but they are still running out of other peoples money........

E.F. Mutton's picture

So how much does the Government skim off the top before compensating the victims?

Admin fees can get hefty you know

TradingIsLifeBrah's picture
TradingIsLifeBrah (not verified) E.F. Mutton Apr 21, 2016 11:28 AM

The victims are congress who had their feelings hurt when the manufacturer lied to them.  They will split the $10 billion evenly.

souljaboy's picture

Whatever's left after the lawyers take theirs.

Bob's picture

Damn good question.  I had it figured for 600k vehicles at $10B as only $16,666 per vehicle.  And we know the lawyers gotta get paid.  WTF?

slightlyskeptical's picture

Some people will choose to keep their cars and I would guess they get the $5,000. Could mean they pay an average of say $20 k each for the rest which will depend on age, mileage, blue book value, etc.

SWCroaker's picture

Just inflation, right?  King dollar isn't what he used to be...

Zero-Hegemon's picture

bdeep, bdeep, bdeep, uh-ba-ba-da-deep, that's all VOLKS!

Aubiekong's picture

Dont worry soon it will be to costly for most Americans without jobs to drive anyway...

corporatewhore's picture

can i get reimbursed with "Tubman" dollars?

Mr. Bones's picture

Compare and contrast this with the money that GM paid for killing people.

Bob's picture

Exceptional nations have very exceptional corporations.

Cognitive Dissonance's picture

And unexceptional peons.....er.....consumers.

To Hell In A Handbasket's picture

A good old fashioned Mafioso shakedown, by the cabal of crooks masquerading as .gov. This is payback for Germany breaking ranks with the Washington consensus, in regards to their stance and sanctions against Russia, over the Ukraine crisis. 

moonmac's picture

 

Know-Nothing Politicians mandated airbags that decapitate kids and they still can’t get it right. Government is always the problem.

Emergency Ward's picture

Instead of spending on research and development, VW needs to invest heavily in political payoffs if they want to compete successfully in American markets.

Huh Reeeally's picture

The price of a VW just went way up! Next, market share plunges. Success!

Emergency Ward's picture

GM has the best lobbyists that auto-industry bailout dollars can buy.  VW needs to catch up.

Pumpkin's picture

The government does not take kindly to competition in the lying department.

shoemouse's picture

They should have hired Goldman's lawyers. Or JPM's.

Bunga Bunga's picture

Calm down, it was the plan since WWII.

NoWayJose's picture

The only people coming out ahead in this are the lawyers!

TalkToLind's picture

Forget VW, the government should fine itself everytime a Takata grenade (airbag) explodes and slices someone's carotid artery. After all it was Uncle Sugar who forced us to have airbags in every car.

Pvt Joker's picture

Why wouldn't I want oneof these  so called Bad VQs ?  Better performance and better mileage even though emission suffer.   Maybe i can find a used one and still qualify for the settlement

the.ghost.of.22wmr's picture
the.ghost.of.22wmr (not verified) Apr 21, 2016 1:07 PM

Dumbest shit ever.

 

One volcano belches more pollution than all cars in the history of cars.

VWAndy's picture

 Not to worry the German taxpayers will make it all better.

Kozakman's picture

I don't give a shit VW cheated. I'm just pissed they got caught.

Our Diesel Passat gets great mileage and drives great.

Kozakman's picture

I don't give a shit VW cheated. I'm just pissed they got caught.

Our Diesel Passat gets great mileage and drives great.

TalkToLind's picture

VW had no choice, they could see the goal posts moving so they did what they had to do.  

PrometeyBezkrilov's picture

*VW ATTORNEY SAYS COMPANY WANTS TO WIN BACK CUSTOMER CONFIDENCE

I don't know what this retard is talking about. I get my confidence every time I fill up my Jetta TDI at the gas station. This ia all gang-raping of the German businesses as a pay back for asking their gold back. All these aaccusations they can roll up in a tube and shove me up their own ass.