Source: Bloomberg by Jeff Plungis
'Goodwill package' an attempt to regain customers' trust
VW says payments won't mean consumers waive right to sue
Volkswagen AG, reeling from an expanding scandal involving diesel cars it has admitted it rigged to pass U.S. pollution tests, announced Monday that owners of the vehicles will receive $1,000 in what the company calls a “goodwill” gesture.
VW is offering owners of diesel-powered cars with 2.0-liter engines under investigation by the U.S. Environmental Protection Agency $500 on a prepaid Visa card, $500 in dealership credits and three years of free roadside assistance.
Volkswagen has been struggling to contain customer anger since the EPA announced the company’s smaller diesel cars since 2009 have technology installed to rig emissions tests. VW dealers have also gotten extra payments and incentives for selling gasoline-powered cars as diesel models can’t be sold.
“We are working tirelessly to develop an approved remedy for affected vehicles,” Michael Horn, Volkswagen Group of America’s president and chief executive officer, said in an e-mail. “In the meantime, we are providing this goodwill package as a first step towards regaining our customers’ trust.”
Consumers who want to sign up for the loyalty program can verify eligibility by going to www.vwdieselinfo.com. Once registering, a goodwill package will be mailed within four weeks, and then customers can pick up payment cards at an authorized dealer.
Two Democratic U.S. senators who have been critical of Volkswagen called the payments “insultingly inadequate.” VW needs to fully cooperate with federal criminal and civil investigations that may provide more redress to taxpayers and car owners, Richard Blumenthal of Connecticut and Edward Markey of Massachusetts said in a statement.
“It should offer every owner who wants to keep her car full compensation for the loss of resale value, fuel economy and other damage caused by its purposeful deception,” the senators said. “The company needs to get serious.”
Consumers don’t need to release any legal claims in order to receive the goodwill package, VW spokeswoman Jeannine Ginivan said.
However, Robert Hilliard, an attorney representing hundreds of owners of diesel cars covered by the EPA investigation, cautioned that consumers signing up for payments should be mindful of any fine print that would agree to arbitration instead of litigation. State laws can allow the refund of the entire purchase price, and jury awards can be tripled if defendants are proven to have actual knowledge of bad conduct, he said.
“Volkswagen customers are very sophisticated and will see these little gift cards for what they are -- much too little, much too late,” Hilliard said.
The Wolfsburg, Germany-based automaker announced the program in an e-mail today.