Volkswagen to pay $1.2 billion or more to US owners of big diesels

VW already agreed on $15 bn settlement with owners of some 500,000 smaller, 2.0-liter diesel engines

Volkswagen has agreed to pay at least $1.2 billion in buybacks and compensation to settle claims from US owners of cars with larger diesel engines that the company rigged to cheat on emissions tests.

And the German automaker could pay even more as much as $4 billion if it can't repair many of the cars in a way that satisfies regulators.

The proposed settlement filed yesterday before Judge Charles R Breyer in US District Court in San Francisco covers owners of some 78,000 Audi, Volkswagen and Porsche cars with 3.0-liter diesel engines.

Volkswagen has already agreed on a $15 billion settlement with owners of some 500,000 smaller, 2.0-liter diesel engines.

Volkswagen has now settled most US consumer claims as it tries to repair a tarnished reputation. "All of our customers with affected vehicles in the United States will have a resolution available to them," Hinrich J. Woebcken, head of Volkswagen Group of America, said in a statement.

The company still faces lawsuits from fewer than 5,000 owners of 2.0-liter diesels who opted out of the settlement, as well as some shareholder suits and numerous lawsuits filed by states for violating pollution laws.

VW also has settled a US Criminal investigation by agreeing to pay $4.3 billion, but a probe of employee behavior continues with seven people charged in the US.

In all, VW will pay more than $20 billion to settle civil and criminal claims in the US alone.

Also pending is whether VW can adequately fix some older 2.0-liter engines. If it can't, VW will have to buy back all vehicles with the smaller diesel engines. A March 3 deadline is approaching.

Legal issues also remain in Europe. Former CEO Martin Winterkorn and 36 others are under criminal investigation in Germany, where investors also are suing the company.

Volkswagen shares plunged after the scandal broke in September of 2015.

Under yesterday's proposed settlement, owners of 20,000 older 3.0-liter models dating back to 2009-2012, which cannot be fixed to meet pollution standards, will be offered buybacks or trade-ins. In addition, they will receive compensation ranging from $7,755 to $13,880, according to a statement from owners' attorneys.

People who bought 58,000 newer cars from model years 2013-16, which can be fixed, will get compensation of $7,039 to $16,114. Volkswagen says those cars can be made to comply with pollution limits. If VW can't fix the newer cars to regulators' satisfaction, then the owners' attorneys will go back to court to seek buybacks.