Two months after agreeing to a $14.7 billion deal with federal regulators over its cheating on diesel emissions tests, Volkswagen has reached another settlement covering its 650 U.S. dealers.
The maker will pay $1.2 billion over the next 18 months to cover the losses dealers claim to have run up as a result of the scandal, in large part due to a sharp drop in the maker's sales. Along with cash payments, VW will provide "additional benefits" to those dealers.
‘‘They have cars on their lots they can’t sell,’’ Steve W. Berman, the lawyer for the dealers, told Judge Breyer. “Volkswagen franchise value has gone down. And they have invested millions in these Volkswagen franchises. So we are pleased that the settlement will address the financial harm that they’ve incurred.’’
Volkswagen fell into turmoil last September after admitting it had equipped nearly 600,000 diesel models sold in the United States with “defeat device” software that allowed the cars to cheat on emissions tests and spew far more pollutants than allowed in regular driving.
In June the company, government and lawyers for car owners reached a settlement covering some 500,000 cars equipped with 2.0-liter diesel engines. Under that accord, the company will spend as much as $10.03 billion to buy back affected cars at their prescandal values and pay additional cash compensation to owners. Models include the Volkswagen Jetta and Passat.
Volkswagen still has to reach an agreement with government officials over the 3.0-liter diesel. And it has been negotiating what is expected to be a $1.2 billion fine to settle the Department of Justice criminal probe. Also on the docket: shareholders are suing to recover the sharp decline in their VW stock portfolios since the scandal began.
The dealer settlement is expected to be reviewed by the courts on September 30th.
