Judge Delays Hearing So Second Dieselgate Agreement Can Be Found

Recognizing that there has been movement in talks aimed at settling another phase of the Volkswagen diesel emissions scandal, U.S. District Court Judge Charles Breyer delayed for two weeks a hearing on Volkswagen’s plans to take care of the 3.0-liter V-6 portion of Dieselgate. In an order issued Tuesday, Judge Breyer set a new hearing for Dec. 16 the automaker’s plans for dealing with 80,000 polluting Porsche, Audi and Volkswagen vehicles.

Resolving Outstanding Issues

Judge Breyer noted that he had been told there might be a “resolution of the outstanding issues” in the offing, so he gave negotiators extra time to find the solution to their issues.

A Reuters report two weeks ago indicated that VW and U.S. regulators had reached an agreement that mixed buybacks and fixes for the 80,000 3.0-liter V-6 engines. There were outstanding issues including owner compensation. The deal negotiators have worked out so far includes buyback offers for 20,000 older VW and Audi models whose engines cannot be made compliant and a software fix for the remaining 60,000 vehicles. The vehicles are a mix of Porsche, Audi and VW vehicles.

The new round of negotiations has been aimed at resolving the remainder of the emissions scandal that Volkswagen’s engineers initiated in 2006 when they realized that without using the urea formaldehyde doping system that was originally planned for the EA189 engine, the powerplant wouldn’t meet U.S. standards for nitrous oxide emissions. About six months ago, VW and regulators agreed to a series of steps to settle the 2-liter portion of the emissions scandal. The automaker agreed to buybacks and compensation totaling $10.03 billion. The agreement covered 475,000 vehicles with buybacks based on Sept. 15, 2015, trade-in values found in the National Auto Dealers Assn. Used-Car Buying Guide. Also, owners were to be offered compensation ranging from $5,100 to $10,000. The buyback program kicked in last week.

Two people knowledgeable with the ongoing 3.0-liter engine talks said progress had been made, but negotiators had not reached an agreement. While the 2.0-liter diesels have software that permitted emissions of up to 40 times the allowed emissions, 3.0-liter powerplants have an undeclared auxiliary emissions system that enabled them to emit up to nine times the limits.

Some Settlement Pieces Known

Though no agreement has yet been reached, there are some parts of the settlement that are known. For example, is expected to deposit more funding into the environment mitigation trust set up to offset excess emissions. In the June 2.0-liter agreement, VW said it would pay a total of $2.7 billion over three years to mitigate pollution caused by the 2.0-litr engines. The added money in the 3.0-liter side of the emissions scandal will be much less because there are just fewer vehicles involved, so they pollute less.

In sum, VW has already agreed to pay up to $16.5 billion in the Dieselgate class-action lawsuit settlement. The 3.0-liter portion of the agreement will cost them more, and the automaker is still facing what could be billions to settle a Justice Department criminal probe.