U.S. District Judge Charles Breyer in San Francisco recently approved a $14.7 billion settlement involving Volkswagen in the automobile manufacturer's emissions cheating case, the largest ever in U.S. history.
To recover its tarnished reputation, Volkswagen has to make reparations to 475,000 owners of both Audi and Volkswagen cars with 2-liter displacement.
Owners have the option to have the cars be bought back at cost or be modified with additional $10,000 cash compensation. If there are leases involving the cars' purchase, such agreements are unenforceable.
Volkswagen was further required to give $5 billion support to environmental programs to reduce emissions.
Volkwagen Beetle, Jetta, Golf, Passat and some Audis were included in the settlement agreement.
The case emanated from the illegal installation by Volkswagen of mechanisms that enable their cars to pass emission tests when they actually failed in those tests. Affected were 11 million cars worldwide and 71,000 cars in California.
Volkswagen sales have gone done drastically since the cheating scheme was discovered. Volkswagen executives were fired and reshuffled as the company lost its reputation as one of the best car brands in the world.
Buybacks have started and 900 additional employees were hired by Volkswagen and an additional employee stationed in each of the 652 dealers across the U.S. to work on the buyback operations. The company opened a website that gave information on the details of the settlement with instructions to car owners on what to do.
Hinrich Woebken, chief executive of Volkswagen in the U.S. said that the settlement "is an important milestone in our journey to make things right in the United States".
Owners who want to hold on to their cars can ask the company to modify their units to meet California emissions standards. The modifications must be approved by State authorities and the Environmental Protection agency both of which doubt the capability of Volkswagen to make necessary changes.
Most car owners prefer the buyback settlement.
