VW to of­fer com­pen­sa­tion for US cus­tomers

The Pak Banker - - COMPANIES/BOSS -

Volk­swa­gen will of­fer gen­er­ous com­pen­sa­tion pack­ages to the roughly 600,000 U.S. own­ers of diesel ve­hi­cles whose emis­sions are over the le­gal limit, the head of its claims fund told a Ger­man pa­per. The Ger­man car maker has still not de­cided whether ve­hi­cle own­ers will be of­fered cash, car buy-backs, re­pairs or re­place­ment cars, Ken­neth Fein­berg told the Frank­furter All­ge­meine Son­ntagszeitung.

Fein­berg pre­vi­ously headed the com­pen­sa­tion funds for the Sept. 11, 2001 at­tacks, BP's Deep­wa­ter Hori­zon oil spill and Gen­eral Mo­tors' ig­ni­tion switch crashes. On Fri­day, Volk­swa­gen post­poned the pub­li­ca­tion of its 2015 re­sults and de­layed its an­nual share­hold­ers' meet­ing as it strug­gles to put an ex­act price on its emis­sions scan­dal.

More than four months af­ter the scan­dal broke in the United States, Europe's lead­ing car maker has still not won ap­proval for a fix for any of the ve­hi­cles. Last week it named a new head of its U.S. le­gal depart­ment to help re­solve the case. Fein­berg told the pa­per he was un­likely to meet his goal of set­ting up the claims fund within 60 to 90 days, say­ing: "My hands are tied as long as VW and the au­thor­i­ties have not over­come their dif­fer­ences."

He said he ex­pected an over­whelm­ing ma­jor­ity to ac­cept the even­tual of­fer, and that VW had given him full au­thor­ity to set the level. "Look at my prior cases: 97 per­cent of the vic­tims of Sept. 11 ac­cepted my of­fer. At GM and BP it was more than 90 per­cent, too. That has to be my tar­get for VW," Fein­berg said. "It is a purely busi­ness trans­ac­tion, less emo­tional. I see that from emails I get from ve­hi­cle own­ers, who say things like: 'Mr. Fein­berg, I know I haven't lost a rel­a­tive, I just want to be treated fairly.' They are all quite rea­son­able."

Fein­berg said he had not yet de­cided whether to con­sider claims that the emis­sions dam­aged the health of claimants. "I am in­clined to not ac­cept that and tell such peo­ple they should sue Volk­swa­gen if they want to," he said. Un­cer­tainty about the fi­nan­cial im­pact of the scan­dal on VW's ac­counts has in­creased since the start of the year, send­ing its shares 26 per­cent lower. How­ever, Nor­way's $850 bil­lion sov­er­eign wealth fund, the world's largest, told the pa­per it would re­main in­vested in Volk­swa­gen, in which it holds 1.2 per­cent.

"VW is an im­por­tant com­pany for Ger­many, Europe and the world. That's why we will keep our stake as long as the fund and the com­pany ex­ist," the fund's CEO Yngve Slyn­gstad said. But he added that since 2008 the fund has crit­i­cized the own­er­ship struc­ture at Volk­swa­gen, where the Porsche and Piech fam­i­lies hold 31.5 per­cent of the cap­i­tal but con­trol 50.7 per­cent of vot­ing rights.

U.S. reg­u­la­tors last month re­jected VW's orig­i­nal plan to fix 2.0 liter diesel cars equipped with soft­ware de­signed to con­ceal the cars' true emis­sions, rais­ing con­cerns that VW may have to carry out a larger num­ber of costly buy-backs. VW has al­ready promised good­will pack­ages worth $1,000 to tens of thou­sands of VW own­ers in the United States, and the Euro­pean Com­mis­sion and Euro­pean law­mak­ers have urged it to con­sider mak­ing a sim­i­lar of­fer to own­ers in Europe.

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