Volkswagen to Compensate U.S. Dealers for Emission Scam within a Month: WSJ

Hundreds of American franchise dealers who have been damaged by Volkswagen’s emission scandal would be compensated by the car maker, sources among the dealers who met the company officials told the media, and this has been pledged by the Volkswagen executives.

At a meeting with more than 150 Volkswagen dealers from the Northeast at the Renaissance Hotel in Newark, N.J., that lasted nearly three hours last week end, a senior American executive from the German car maker made the pledge.

For the first time, damages from the scandal, which affected nearly 500,000 diesel vehicles in the U.S. alone also included the dealers and this is the first time that the German car maker has acknowledged of admitting the dealers in the compensation packages. However since , the details of the restitution aren’t known.

To inform about the process of implementation of a historic roughly $15 billion settlement reached last month with customers and government authorities, Volkswagen is hosting meetings across the U.S. to inform dealers to inform them about the company plans.

A detailed timeline of the buyback and repair program was given to the dealers by Volkswagen. Company executives told dealers that pending final court approval of its settlement, owners of the tainted VW diesel cars on U.S. roads will be able to fix the vehicles or sell them back starting in October. The buyback is expected to run through the end of 2018.

A software update for second-generation diesel vehicles in February would be preceded by a “software/hardware modification” for first-generation diesels in January and a software fix would be available for third-generation diesels in October. A hardware fix ready for third-generation diesel vehicles is expected ot be ready with Volkswagen by October 2017.

The fixes for the nearly 500,000 affected diesel vehicles in the U.S. haven’t yet been approved by the U.S. environmental authorities,

How customers would either sell their cars back to dealers or have them fixed trough the “TDI Settlement Program” was explained and outlined to dealers at the meeting.

According to documents handed out to dealers, the dealer program includes an additional 12,000 vehicles that dealers are unable to sell and are storing on their lots in addition to the nearly 500,000 tainted diesels on U.S. roads.

One of the dealers interrupted and turned the discussion to dealers’ demand for compensation, which wasn’t on Volkswagen’s agenda wWhile dealers listened to Mark McNabb, a senior executive from Volkswagen Group of America Inc., outline the program.

Frustration that the company still hadn’t committed to any form of compensation for its U.S. 650 dealers was voiced by Steve Kalafer, a New Jersey-based co-owner of a large Volkswagen franchise.

Mr. Kalafer told The Wall Street Journal in an interview after the meeting that the company would make a decision on the matter within the next month and added that Mr. McNabb told the dealers there was “heavy discussion” at the company and an agreement to provide dealers with “fair restitution”.

“McNabb said the company was working toward a fair settlement and restitution for the dealers. He used the word restitution for the dealers for the first time,” Mr. Kalafer said.

Volkswagen declined to comment on specifics of the negotiations with U.S. dealers.

“We maintain a regular dialogue with the Volkswagen National Dealer Advisory Council as we work to make things right,” said Jeannine Ginivan, a Volkswagen spokeswoman in an emailed statement.

(Adapted from the wall Street Journal)

Leave a comment