For almost all automakers, a fine adding up to $14.7 billion would be the equivalent of a death knell. But for the biggest automaker in the world, it’s the first step in putting a debilitating scandal behind it. That’s the position Volkswagen AG finds itself in after a federal judge granted preliminary approval for the German automaker to begin putting its billion-dollar settlement to action.
U.S. District Judge Charles Breyer gave his initial approval of the deal, allowing Volkswagen to begin the initial process of settling all the claims levied against it. According to a VW attorney, the automaker plans to hire as many as 300 people to oversee the processing of the settlement claims. In turn, 40 employees from Volkswagen Group of America would oversee the proceedings.
The settlement covers a wide range of items that were laid out in June 2016 in a joint announcement made by Volkswagen and the Environmental Protection Agency. In total, owners of around 475,000 diesel-powered vehicles are likely to be part of the settlement. Depending on their specific situations, the owners have the option of either selling back their cars, have them repaired by the company to make them compliant with U.S. emissions standards, or have their leases terminated at no cost to them. Owners will also be paid additional compensation amounting from $5,100 to $10,000 regardless of what option they take. In addition to the settlements, Volkswagen is also required to spend $4.7 billion in investments towards green vehicle technology.
Despite the initial approval granted by Judge Breyer, the settlement is still subject to final court approval, which could happen as early as October 18, 2016. Once that is granted, the settlement proceedings are expected to follow shortly. Owners affected by the emissions scandal will be notified of the options available to them through various means, including traditional mail, emails, website and media advertisements, and a hotline.
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