American VW owners slam $10bn 'Dieselgate' deal

San Francisco, California - Several angry Volkswagen owners told a federal judge on Tuesday that a $10 billion (R139 billion) settlement does not adequately compensate them for the automaker's emissions cheating scandal, part of a vocal minority who objected to the deal as hundreds of thousands of others signed up for payments.

US District Judge Charles Breyer will determine whether the settlement is fair to consumers and should receive final approval. He said he was “strongly inclined” to approve it but would make a final decision by 25 October, giving him time to consider the owners' objections and whether he should recommend any changes.

Volkswagen owners say the company engaged in a programme of deception that should not go unpunished. File photo: Kai Pfaffenbach / Reuters

“We got played the fool,” Mark Dietrich, an Audi owner from San Francisco, told the judge earlier at a hearing in San Francisco. “This settlement does not go far enough.”

Dietrich demanded the full purchase price of his car as well as part of his registration fee.

The settlement calls for the German automaker to spend up to $10 billion to buy back or repair about 475 000 Volkswagens and Audi vehicles with two-litre diesel engines and pay their owners an additional $5100 - $10 000 (R70 700 - R139 000) each. Any repair options have yet to be finalised.

It also includes $4.7 billion (R65 billion) for unspecified environmental mitigation to make up for the excess pollution and to promote zero-emissions vehicles. The combined $14.7 billion (R204 billion) deal would be the largest auto-scandal settlement in US history.

Attorneys who helped negotiate it said it was fair and had received support from the vast majority of eligible car owners. Volkswagen's lawyer said on Tuesday that it was a good deal for buyers and would help the company regain people's trust.

But Blair Stewart, a Volkswagen owner from Palo Alto, said the company engaged in a “programme of deception” that should not go unpunished. More than a dozen people spoke against the settlement at the hearing, among them people who sold their vehicles and objected that the new owner would get a windfall in the deal.

‘Dirty cars’

The scandal erupted in September 2015 when the US Environmental Protection Agency said Volkswagen had fitted many of its cars with software to fool emissions tests, putting dirty vehicles on the road. Car owners and the US Department of Justice sued.

The software recognised when the cars were being tested on a treadmill and turned on pollution controls. The controls were turned off when the cars returned to the road. The EPA alleged the scheme let the cars spew more than 40 times the allowable limit of nitrogen oxide, which can cause respiratory problems in people.

Robert Giuffra, an attorney for Volkswagen, said the deal includes compromises but provides “massive relief” to consumers.

“This settlement is something that I think is very good for consumers,” he said. “It's good for the environment, and it's a way for Volkswagen to regain the trust of its customers, the American people, regulators and do right by the environment.”

Elizabeth Cabraser, lead attorney for the plaintiffs said more than 330 000 people had signed up for settlement benefits, with about 3200 opting out. The deal's buyback option would give customers the “retail replacement value” of their vehicles, shed added.

“This was a broken situation. It was broken for the environment. It was broken for consumers,” Cabraser said. “I think we've all, including Volkswagen - on the two-litres - put this back together again.”

Volkswagen still faces potentially billions more in fines and penalties and possible criminal charges.