(Adds details on buyback offers, prior compensation, FTC
By David Shepardson
WASHINGTON Dec 22 A federal judge said on
Thursday that Volkswagen AG has reached an agreement
in principle to provide "substantial compensation" to the owners
of about 80,000 3.0-liter polluting diesel vehicles, a key
hurdle to resolve the German automaker's emissions scandal.
U.S. District Judge Charles Breyer did not disclose the
amount of owner compensation, which is not included in a $1
billion settlement announced earlier this week between VW and
U.S. regulators. Half of the compensation will be paid at the
time Breyer gives final approval of the settlement. Some fixes
for the 3.0 liters may not approved until 2018, Breyer said.
Earlier this week, Volkswagen reached the $1 billion
settlement with U.S. regulators, offering to buy back about
20,000 of the vehicles, fix the remaining 60,000 and pay $225
million into an environmental trust fund to offset the vehicles'
The settlement covered luxury VW, Audi and Porsche vehicles
with 3.0-liter engines. With the agreement, Volkswagen would
spend as much as $17.5 billion in the United States to resolve
claims from owners as well as federal and state regulators over
polluting diesel vehicles in addition to compensation for the
Volkswagen spokeswoman Jeannine Ginivan said the automaker
was pleased with the agreement in principle, but said details
will remain confidential for now.
Breyer said the final agreement must be filed with the court
by Jan. 31, and he expects to hold a Feb. 14 hearing to approve
The U.S. Federal Trade Commission is also expected to back
the deal, Breyer said.
Volkswagen, the world's No. 2 automaker, could still spend
billions of dollars more to resolve a U.S. Justice Department
criminal investigation and federal and state environmental
claims and come under oversight by a federal monitor.
It is possible a deal could be reached before the end of the
Obama administration, said sources briefed on the matter.
Breyer in October approved VW's earlier settlement worth
about $15 billion with regulators and the U.S. owners of 475,000
polluting diesel vehicles with smaller 2.0-liter engines,
including an offer to buy back all of the cars.
VW lawyer Robert Giuffra said Thursday the automaker has
offered buybacks to nearly 200,000 customers and 104,000 have
accepted the offer at a value of nearly $2 billion.
VW had agreed to pay $5,100 to $10,000 in compensation to
each of the U.S. 2.0-liter owners. If the new settlement follows
the pattern, it could add $400 million to $800 million to the
3.0-liter settlement. But funds from a separate settlement with
German auto supplier Robert Bosch GmbH are expected to
defray VW's compensation costs.
(Editing by Jeffrey Benkoe)