Volkswagen Reaches An Agreement With the U.S. Justice Deparment

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Submitted by Will Maley on April 21, 2016 - 3:40PM

After seven months and continuous discussions, Volkswagen and the U.S. Justice Department have reached an agreement over the diesel emission scandal.

Today at a court hearing in San Fransisco, U.S. District Judge Charles Breyer announced the deal that includes the buyback of the affected diesel models and possible fix if regulators agree to it.

What do we know about the deal?

Not a lot. We only know bits and pieces about the deal that were announced at the hearing. Any money amounts or further details are currently under a gag order by Judge Breyer as the two parties work on finalizing the deal.

Here is what we do know thanks to Automotive News (Subscription Required) and Reuters.

  • Volkswagen will offer owners the choice of selling back their TDI vehicle or have them fixed to meet U.S. emission standards. The fix will have to be agreed by regulators before the VW can start.
  • If you are leasing the vehicle, Volkswagen will allow you to end it with no penalties
  • Volkswagen will establish two funds. One will focus on owner compensation while the other will be used to to promote "green automotive technology." No mention of how much money will be in each fund.
  • Volkswagen will also work on settling the more than 600 class action lawsuits filed against it in the coming weeks

It should be noted this agreement is for models equipped with the 2.0L TDI four-cylinder engine - around 600,000 vehicles. Models equipped with the 3.0L TDI V6 are being discussed separately and Judge Breyer said these issues will be addressed "expeditiously."

What happens next?

Judge Breyer has set a deadline of June 21st for the final paperwork to be filed. Once filed, the filings will be available to be viewed by the public. On July 26th, a hearing will be held to discuss the final agreement and for the judge to make a decision.

Is this the beginning of the end of the madness?

That's too early say as Volkswagen hasn't been fined by the various countries where it used the illegal software. The U.S. Justice Department is continuing their criminal investigation into Volkswagen's conduct. Plus, we're awaiting the results of Volkswagen's internal investigation done by Jones Day law firm.

Pic Credit: Volkswagen