Volkswagen is set to offer generous compensation packages to the affected vehicles owners in the US once the company gets approval to fix the affected vehicles, according to Ken Feinberg, head of Volkswagen claims fund. In an interview with German paper Frankfurter Allgemeine Sonntagszeitung, Feinberg discussed Volkswagen's commitment to a reasonable and generous compensation for the owners of the 600,000 affected diesel vehicles in the US which were found to emit CO2 at levels above what is legally allowed.
However, he added that the company has not yet decided the manner of the compensation, whether as car buy-backs, repairs, replacements cars or outright cash. Feinberg was hired by Volkswagen to head its compensation fund last December, given his compensation-funds experience in other high-profile cases such as the funds of September 11, 2001 attacks, the BP Deepwater Horizon oil spill and General Motors’ ignition-switch crashes.
However, Feinberg admits any compensation plans will not be implemented as long as Volkswagen and US regulators cannot reach a mutually acceptable agreement. It has already been more than four months since the emission scandal first surfaced in the United States and WV has not yet reached a deal with regulators so that any plan of fixing the affected vehicles remains on hold. Feinberg added that the original timetable of setting up the claims fund within 60 to 90 days would most likely be delayed due to the current impasse.
Just last week, VW announced a new legal department head for U.S. in the hope of facilitating the case's resolution. Putting a clear figure on how much the emission scandal would cost the company proved to be tricky. Currently, Volkswagen has not yet published its 2015 financial results while, at the same time, its annual shareholders' meeting is on hold.
Feinberg expressed his confidence that majority of the affected owners would most likely agree to whatever settlement compensation VW will eventually offer in the future as long as VW offers a generous and reasonable package. For the VW case, Feinberg feels that a 90 percent settlement acceptance rate is reasonable, citing his record in prior cases: 97 percent victims of the September 11 attack accepted his offer, with more than 90 percent in both the GM and BP cases.
In a show of trust for his proven track record in settlement cases, Feinberg was granted full authority by VW with regards to the compensation-related decisions. According to Feinberg, the decision to accept future settlements will be a purely business/financial consideration for most owners, as he relates that most of the emails he received from them carry the message that they just want to be treated fairly and reasonably.
Commenting on whether or not claims that the emissions have damaged the health of the vehicles occupants, Feinberg revealed he is inclined not to accept these claims and offers the suggestion that for those who still want to pursue them, they have go to the courts and sue VW.
Recent Updates on the Scandal
VW had previously offered to fix the 2.0 liter diesel cars said to be capable of violating emissions testing due to its highly advanced software installations. However, the proposal was rejected last month by U.S. regulators as it was perceived to be inadequate, a cause of concern among shareholders that this would lead to a scenario of costly vehicle buy-backs for the company, given the fact that the US market is the world's second-biggest.
Across the Atlantic, the situation is likewise bleak for VW with rising pressure from the European Commission and lawmakers for VW to compensate drivers comparable to the company's proposed scheme in the U.S. - a goodwill package of $1,000 each.
These developments weighed down VW's shares now priced 26 percent lower since the year's start. However, in a show of support and commitment, the world's largest sovereign wealth fund – Norway's $850billion fund – CEO Yngve Slyngstad informed Frankfurter Allgemeine that it intends to continue to invest in the German automaker citing Volkswagen’s importance to Germany, Europe and the world.