Last month, Volkswagen agreed to compensate owners of more than 500,000 vehicles equipped with “defeat devices” used to skirt emission standards. Now, the carmaker is reportedly promising to also make it up to dealers affected by the scandal through an unspecified restitution plan.
The Wall Street Journal reports that VW executives for the first time pledged at a recent meeting with more than 150 VW franchise dealers to compensate the businesses.
The meeting, which involved dealers from the Northeast, is part of a series VW is hosting to inform dealers on how it will implement a recently agreed upon $15 billion settlement involving buy backs and customer compensation that will begin resolving the emissions scandal.
The restitution plan, for which VW did not provide specifics, is intended to provide compensation for any economic damage dealers suffered following the September 2015 reveal that the carmaker has equipped hundreds of thousands of vehicles with devices designed to cheat emissions tests.
Shortly after the Environmental Protection Agency and California Air Resources Board revealed that VW’s diesel-engine vehicles contained defeat devices, the carmaker ordered dealers to stop selling affected vehicles until the issue was fixed.
This, VW dealers, claimed in a lawsuit filed in April, “caused great harm to franchise dealers whose profits have been erased and whose dealerships have plummeted in value due to the inability to sell tens of thousands of affected vehicles.”
According to that lawsuit – filed by three family-owned dealers in Illinois and Florida – VW knew that the emissions scandal would break, but continued to push dealers to stock their lots with diesel-engine vehicles and undergo million-dollar remodels.
For example, the dealer claims that “two weeks after VW admitted to regulators that it had installed illegal defeat devices in hundreds of thousands of US cars, and three days before those admissions were made public, VW pushed through [the family’s] purchase of a Volkswagen franchise in Urbana, Illinois, at top dollar, as if the Dieselgate scandal was not about to toss the Volkswagen brand value of a proverbial cliff,” according to the complaint.
Mark McNabb, a senior executive from Volkswagen Group of America Inc., told those present at the meeting that the company has been in “heavy discussion” about how to provide restitution to dealers, noting that a decision about the program would be announced within the next month, the WSJ reports.
“We maintain a regular dialogue with the Volkswagen National Dealer Advisory Council as we work to make things right,” a Volkswagen spokeswoman told the WSJ, declining to provide specifics on what has been discussed.
VW Vows to Compensate Dealers for Tainted Diesels [The Wall Street Journal]
by Ashlee Kieler via Consumerist
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