Volkswagen Dieselgate update: VW & regulators making progress, new game plan coming next month

May 24, 2016

There's good news and bad news on the Volkswagen Dieselgate front. The good news is, Volkswagen and U.S. regulators appear closer than ever to reaching a deal that could finally result in emissions test-cheating diesels being fixed or bought back by the automaker. 

The bad news? Volkswagen still has a lot of 'splaining to do, and it's ruining things for other car companies.

Volkswagen makes "substantial progress" on diesel fix: U.S. District Judge Charles Breyer has expressed more than a little frustration with Volkswagen the past few months. Back in February, he gave the company until March 24 to submit plans for repairing roughly 482,000 2.0-liter diesels from Audi and VW.  In March, he extended that deadline until April--a deadline that Volkswagen met by the skin of its teeth. However, details of the company's plan are still being worked out with the Environmental Protection Agency, the California Air Resources Board, and the Federal Trade Commission. 

On June 21, those details will be revealed. They'll include not just a plan for fixing and/or buying back vehicles, but also "substantial compensation" (Breyer's words) for car-owners affected by the scandal. They're also expected to include some fines from the EPA, CARB, and the FTC, and possibly a settlement with VW and Audi owners who've filed a class-action lawsuit. Speaking yesterday, Breyer said that Volkswagen was making "substantial progress" in its talks with regulators--a nice change, given CARB's criticism of Volkswagen's nonchalance when it submitted fix plans for 3.0-liter Audi, Porsche, and VW vehicles in January. (BTW, there's still no word on when Volkswagen intends to re-submit repair plans for those larger vehicles.)

New strategy in the works: Next month, around the time that Volkswagen announces its U.S. deal with diesel owners and the government, the company will also release details of its new corporate strategy. We heard informal rumblings of this last October as Volkswagen CEO Dr. Herbert Diess announced plans to focus more attention on electric cars--something that Volkswagen may or may not follow through on. Stay tuned.

VW workers get bonuses: In March, we heard that despite slow sales, VW's German workers would receive bonuses, as would Audi's. Now, it appears that some 120,000 VW workers will be getting raises, too--a 4.8 percent increase between now and August 1, 2017.

Investors aren't happy: Volkswagen has completed an internal investigation to determine who knew what about the Dieselgate scandal and when they knew it. At least three investor groups are calling for third-party investigations, though, because they believe Volkswagen's internal probes may not have been adequately thorough or transparent. Though they'd like to see shareholders vote on such an investigation, since the Porsche family holds a controlling stake in the company, chances of success are slim. Volkswagen hasn't yet commented on the investors' demands.

Fiat Chrysler charged with cheating on emissions tests:  Last week, we mentioned that General Motors' Opel brand was suspected of cheating on emissions tests in Germany. Now, FCA has been hit with similar charges, after the emissions controls on a Fiat vehicle shut down after 22 minutes--just two minutes longer than the standard emissions test. Curious, or just a coincidence? As with GM, FCA has denied any wrongdoing.

Note: for purposes of clarity, "Volkswagen" has been used to refer to the Volkswagen Group parent company, while "VW" has been used to refer to the company's popular mass-market brand of automobiles.

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