Volkswagen AG dealers are set to receive a compensation following a billion dollar plus settlement that accompanies a diesel emissions scandal.
Under the terms of the settlement, 650 U.S. dealers would be paid an average of $1.85 million each in a $1.2 billion settlement. So basically, the settlement will cost Volkswagen $1.2 Billion, which will then be spread out over all of its dealers.
If you remember, VW admitted to installing secret software in its diesel cars in September 2015. The software was meant to — and successfully managed to — to cheat exhaust emissions tests and make the vehicles appear cleaner in testing than they really were. That is until they were caught in a test leading to a whole lot of scandal and Volkswagen was forced to recall the whole lot.
In reality though, these vehicles were responsible for emitting up to 40 times the pollution levels that were legally allowed. Needless to say, the recall, the scandal and the ensuing hassle led to a whole lot of trouble for customers and as per dealers who later filed a lawsuit, tarnished their own brand and cost them sales as well.
Meanwhile, Volkswagen has agreed to the ruling to shell out the money. The amount will be provided to the 650 or so dealers over the course of 18 months in several installments. Some dealers might end up getting more or less than others — that is, the distribution does not need to be equal — however, the average amount received by each stands around $1.85 million.
As per VW North American Chief Executive Officer Hinrich Woebcken,
[the agreement with] dealers is a very important step in our commitment to making things right for all our stakeholders in the United States.
Volkswagen has also agreed to spend up to $22 Billion in the states to make reparations.
Speaking on the topic, Steve Berman, managing partner of Hagens Berman and lead attorney for the car dealers, said:
The Volkswagen-branded franchise dealer class-action settlement finalized today represents an outstanding result for Volkswagen’s affected franchise dealers who, like consumers, were blindsided by the brazen fraud that VW perpetrated.
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