SAN FRANCISCO -- Volkswagen AG reached a $1 billion agreement with U.S. car owners and regulators to fix or buy back about 80,000 Audi, VW and Porsche vehicles with emissions-cheating 3-liter diesel engines, a federal judge announced Tuesday.
The accord covering the 2014 Volkswagen Touareg, some 2015 Porsche models and some 2016 Audi models resolves another significant piece of Volkswagen's emissions-cheating scandal. The company admitted last year that about 11 million diesel cars worldwide were outfitted with a so-called defeat device to game U.S. environmental tests.
Details of the agreement, including its cost to the German automaker, weren't disclosed during a brief hearing Tuesday in San Francisco federal court. Some details of the agreement were disclosed in court filings later Tuesday.
The accord provides for repairing the cars if a fix is approved by the government and, like an earlier deal covering 2-liter engines, includes an offer to buy back at least some vehicles. The agreement also covers claims against Volkswagen supplier Robert Bosch GmbH.
Volkswagen called the deal announced Tuesday "another important step forward in our efforts to make things right for our customers."
"We are committed to earning back the trust of all our stakeholders and thank our customers and dealers for their patience as the process moves forward," the company said in a statement.
U.S. District Judge Charles Breyer, an appointee of former President Bill Clinton, gave his final approval in October to the automaker's settlement covering 480,000 Volkswagens with 2.0-liter engines.
Tuesday's agreement came after Breyer offered parties four extensions in December to reach a deal, including two on Friday, during what he called "intense discussions." He gave lawyers for Volkswagen, car owners and the government the weekend to conclude negotiations before returning to court Monday in San Francisco, when parties were granted a "final continuance" to resolve "a complicated settlement," Breyer said.
The automaker's agreement with the U.S. Environmental Protection Agency and California's Air Resources Board calls for Volkswagen to fix 60,000 3-liter vehicles and buy back about 19,000 older models that would be too complex to repair, people familiar with the matter have said. The recall plans involve a simple software update, and avoiding a full buyback of all the cars would save the company about $4 billion, the people said.
The global scandal emerged last year when the EPA said Volkswagen had fitted many of its cars with software to fool emissions tests. Car owners and the U.S. Department of Justice sued.
The software recognized when the cars were being tested on a treadmill and turned on pollution controls. The controls were turned off when the cars returned to the road. The EPA alleged the scheme let the cars emit up to 40 times the allowable limit of nitrogen oxide, which can cause respiratory problems in humans.
The scandal has damaged Volkswagen's reputation and hurt its sales. The company has reached a separate $1.2 billion deal with its U.S. dealers and is still facing potentially billions more in fines and penalties and possible criminal charges.
The case is In Re: Volkswagen "Clean Diesel" Marketing, Sales Practices and Products Liability Litigation, 15-02672, U.S. District Court, Northern District of California (San Francisco).
Information for this article was contributed by Kartikay Mehrotra, Margaret Cronin Fisk, Alan Katz, Joel Rosenblatt, Jennifer A. Dlouhy and Jamie Butters of Bloomberg News and Sudhin Thanawala of The Associated Press.
Business on 12/21/2016