VW plans new fix proposal for 3.0 litre vehicles: Justice Dept

[WASHINGTON] Volkswagen AG plans to offer a new proposal to fix 85,000 polluting 3.0 litre vehicles after regulators rejected an earlier plan, a Justice Department lawyer said Tuesday.

Earlier this month, the California Air Resources Board rejected, as insufficient, a plan to fix the vehicles, VW and Audi luxury cars from model years 2009-2016. At a court hearing on Tuesday in San Francisco, Justice Department lawyer Joshua Van Eaton said the German automaker had been meeting with regulators in recent weeks and planned to offer a new fix proposal in August.

US District Judge Charles Breyer is holding a hearing on Tuesday on whether to grant preliminary approval for a US$10.033 billion proposed settlement with owners announced last month. VW faces more than 1,100 lawsuits that have been consolidated before Breyer.

"It's not a simple settlement," Breyer said in court.

Mr Breyer said he wants another update on the 3.0 litre talks at an Aug 25 court hearing.

The settlement announced in June, US$14.7 billion in total, includes up to US$10.033 billion for the largest-ever automotive buyback offer in the United States for 475,000 2.0 litre polluting US vehicles. VW will also offer fixes if regulators approve.

Owners will receive at least US$5,100 in compensation - in addition to the value of the vehicle. The value of the car may decline based on the number of miles driven but will not be lower if it has dents or scratches.

VW admitted in September that it installed secret software that allowed US vehicles to emit up to 40 times legally allowable pollution.

Under the Justice Department deal, VW will provide US$2 billion over 10 years to fund programs directed by California and Environmental Protect Agency to promote construction of electric vehicle charging infrastructure, development of zero-emission ride-sharing fleets and other efforts to boost sales of cars that do not burn petroleum.

VW also agreed to put up US$2.7 billion over three years to enable government and tribal agencies to replace old buses or to fund infrastructure to reduce diesel emissions.

Separately, VW announced a settlement with 44 US states, the District of Columbia and Puerto Rico that will cost at least US$600 million, bringing the total to as much as US$15.3 billion.

Last week, three states filed new lawsuits, saying that VW violated state environmental laws and seeking hundreds of millions in additional penalties.

REUTERS