UPDATE 1-VW creates US diesel emissions claims program

23 Dec 2015 | Author: | No comments yet »

VW Names Kenneth Feinberg to Oversee Fund for Claims on Emissions Deception.

Volkswagen of America said on Thursday it is creating an independent claims program for the owners of nearly 600,000 diesel vehicles that emit up to 40 times legally allowable emissions. DETROIT (AP) — Volkswagen has hired Kenneth Feinberg to create a program to compensate owners of diesel-powered cars caught up in an emissions-cheating scandal.Volkswagen AG (ADR) (OTCMKTS:VLKAY) has named American attorney Kenneth Feinberg in charge of handling the financial claims raised on the auto giant after the diesel emission scandal. The German automaker said it is naming compensation expert Ken Feinberg, who administered compensation funds for the Sept. 11, 2001 attacks, BP Plc Deepwater Horizon oil spill and General Motors Co ignition switch crashes, to create and administer the program.

VW has acknowledged that 482,000 2.0 liter 2009-2015 diesel cars and 85,000 3.0 liter SUVs and larger cars have higher-than-allowed emissions and faces more than 500 lawsuits. Most recently, he has been working for General Motors, administering the victim compensation program tied to the company’s deadly ignition defect, which has now been linked to at least 124 deaths and at least 275 injuries. VW Group of America President and CEO Michael Horn said Feinberg’s “extensive experience in handling such complex matters will help to guide us as we move forward to make things right with our customers.” Camille Biros, who will be deputy administrator of the VW claims program, told Reuters is too early to say if the program may offer buybacks to vehicle owners, cash compensation or other specific compensation. More than a half-million of the diesel cars in the U.S. have software that cheats on emissions tests, and several federal agencies are investigating Volkswagen’s conduct.

In exchange for accepting compensation offers from G.M.’s program, victims of these car accidents and their families forfeited their right to sue the company. Separately, a group of business leaders including Tesla Motors Inc CEO Elon Musk on Thursday urged the California Air Resources Board to order VW to transition to electric vehicles, rather than try to fix diesel vehicles. The program will encompass both the 2.0-liter four-cylinder powertrain that was first revealed to have “defeat device” software by independent investigators, and the 3.0-liter V6 powertrain that was implicated after subsequent investigations.

Over 350 lawsuits in 40 states were recently combined and given class-action status (something Volkswagen supported), and will be heard in a court in California. Many owners purchased their cars because of their supposed low environmental impact, and some fear that any fix that lowers their emissions to legal levels will compromise performance or fuel economy. Feinberg has prior experience of handling high-profile scandals such as General Motors Company’s (NYSE:GM) ignition switch defect that caused over 120 deaths, and BP Plc’s 2010 oil spill in the Gulf of Mexico.

Feinberg said he would begin work immediately designing an “independent claims process,” and that his team would need the input of not only Volkswagen but also vehicle owners, their lawyers and others affected by the case. Apart from facing a class action lawsuit, the company would have to incur nearly $9.4 billion in vehicles recalls, according to Bloomberg Intelligence. Feinberg said in a statement that he will start work immediately. “We hope to have a claims program designed as expeditiously as possible,” he said, adding that he would seek input from VW, owners, lawyers and other interested parties.

Experts say the hardware, including exhaust system modifications and a possible chemical treatment system, could hurt the cars gas mileage or performance. Audi CEO Rupert Stadler recently told Reuters that the 3.0-liter vehicles may only require a simple software fix, but the 2.0-liter cars may require more extensive modifications. It also revealed strong sales of over 13 million units in the opening weekend following launch, curiously failing to report the number of orders in the first 24 hours. Moreover, robust opening weekend sales were said to have come on the back of iPhone Upgrade Program and China’s inclusion in the list of launch countries. These include higher iPhone average selling prices, iPad Pro benefiting margins, potential for an iPhone refresh that could target new price points, higher gross-margins during the “s” cycle and strong share buybacks.

Recently, market research firms such as IDC have said that the worldwide smartphone market is fast saturating, as developed markets especially continue to mature across the globe. In face of these concerns, Apple must rely on replacement rates and switchers from Android to continue an upward growth trajectory, apart from the growth driven by upgrade cycles.

Even though the region was recently hit with an economic downturn, revenues from China grew 99% year-over-year (YoY) in Apple’s fourth quarter fiscal year 2015 (4QFY15). Current data indicators suggest that the Chinese economy is showing signs of recovery, with National Bureau of Statistics data suggesting that industrial activity rose to a five-month high of 6.2% in November.

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