VW Reaches Diesel-Cheating Deal to Pay Car Owners, Welt Says

Volkswagen Said to Reach Compensation Deal With U.S.

Volkswagen AG has reached an agreement with U.S. authorities to pay $5,000 each to American owners of diesel vehicles that were rigged to cheat pollution controls, Germany’s Die Welt Newspaper reported Wednesday.

As part of the deal, the carmaker will update the software on models equipped to address the emissions problem, while the “small proportion’’ of cars that can’t be fixed will be subject to a buyback, the newspaper reported, citing an unidentified source close to the negotiations. The plan is slated to be presented to U.S. District Judge Charles Breyer in San Francisco on Thursday.

The company on Tuesday said in a court filing that there would be no need for a trial this summer after it presents its solution to get the some 600,000 cars off U.S. roads. Lawyers for thousands of plaintiffs in more than 600 lawsuits consolidated before Breyer asked him to make preparations “dependent on the status and progress" of VW’s proposal.

Volkswagen, based in Wolfsburg, Germany, admitted last year that it had manipulated diesel engines with a “defeat device” on some 11 million cars worldwide so emission controls switched on only during pollution tests. A plan to fix the 8.5 million noncompliant cars in Europe was approved in December but failed to meet California’s emissions standards.

Elizabeth Cabraser, the lead lawyer for car owners in the lawsuits, and Volkswagen’s attorney Robert Giuffra didn’t respond to calls seeking comment on the agreement. Marrio Guerreiro, executive vice president of communications for the Volkswagen Group of America, declined to comment on the report. Mary Nichols of the California Air Resources Board and U.S. Environmental Protection Agency spokeswoman Laura Allen also declined to comment.

Volkswagen AG’s American depositary receipts surged to their highest in 2016 after the Die Welt story. The receipts climbed 4.8 percent to $30.62 at 2:39 p.m. New York time after reaching $30.75, the highest intraday price since Dec. 31. 

The case is In Re: Volkswagen “Clean Diesel” Marketing, Sales Practices and Products Liability Litigation, MDL 2672, U.S. District Court, Northern District of California (San Francisco).

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