Christmastime in Canada: Volkswagen Showers Diesel Owners With $2.1 Billion
Half a year after an embattled Volkswagen agreed to pay nearly $15 billion in compensation to U.S. diesel owners and regulators, it’s Canada’s turn to dip into the automaker’s sooty wallet.
The company reached a deal today with the 2.0-liter diesel vehicle owners behind a class-action lawsuit. When finalized, the settlement means up to 105,000 bought-back vehicles and more cash added to the company’s penalty pile. $2.1 billion, to be exact, assuming everyone applies for a piece of the pie.
While the cash compensation has the same floor as in the U.S., the payout’s ceiling is lower.
According to CBC, the tentative deal was expected to be signed in Ontario Superior Court today, as well as in a Quebec court. The courts’ approval should come in March, after which owners can collect their loot and unburden themselves of heavily polluting vehicles.
A host of options are available to Canuck owners. First, they can rid themselves of their TDI by having the company buy it back, or have the company fix it for free. (U.S. owners are still waiting for a fix.) For those not completely soured on the brand, there’s the option of trading the old model in for a new Volkswagen.
Depending on the year, make and model, all owners can apply for cash compensation. Starting at $5,100, the payouts start at the same point as the U.S. offer, but top out at $8,000. American owners saw up to $10,000 in cash payments.
Assuming the settlement gains approval during the month of March, owners could start receiving buyout offers and payments at the end of the month. March 4, 2017 is the deadline to opt out of compensation.
Speaking to CBC, the lawsuit’s co-lead counsel, Harvey T. Strosberg, called the $2.1 billion price tag “as huge number.”
“No corporation has paid that money in Canadian history,” he said. “It is a watershed moment.”
In a statement, Volkswagen Group Canada president and CEO Maria Stenstroem said, “Volkswagen’s primary goal has always been to ensure our Canadian customers are treated fairly, and we believe that this proposed resolution achieves this aim.”
Unlike in the U.S., the government of Canada’s penalty is nowhere near as harsh. The federal Competition Bureau will fine Volkswagen Canada and Audi Canada $15 million for false environmental marketing claims. These figures do not include the crop of 3.0-liter Volkswagen Group vehicles also saddled with emissions-cheating defeat devices.
According to Reuters, a “global resolution” of 3.0-liter vehicle issues is expected to be announced tomorrow.
[Image: Volkswagen of America]
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The payout structure here in the states seems to be working out well for the people I know participating. Everyone is looking at a bizarrely large down payment on their next car, tons of time to do the shopping (not how anyone but us shops normally) and a ridiculously low cost per mile on their doomed tdi's in the meantime. I wish all consumer scandals could have this kind of happy ending. My big concern is that this isn't repeatable. How many companies outside of pharma and finance can muster the credit and cash to pull off a restitution like this? The answer is distressingly few. That leads me to a distressing conclusion that while nearly perfect, I wouldn't want to see it necessarily become a template. The hosed vehicle owner class right now is actually broader than this, it's takata bag owners. From what I've heard dealers are offering auction bait pricing to those trade ins since they can't sell them themselves. So the other huge current auto scandal is savaging owner equity across many brands while this one is still soaking up all the attention despite/because of the happy ending.
I much prefer Christmastime in Hollis, Queens.