Volkswagen Owners Want Payback Over Pollution-Control Cheating

(Bloomberg) — John Decker bought his 2013 Volkswagen Jetta
diesel thinking he was doing his part to improve the environment
and reduce his carbon footprint.

Now that the German automaker has admitted its claims about
the model’s performance were false, he just wants the company to
buy it back from him.

“I feel completely deceived by Volkswagen,” Decker, of
Sacramento, California, said in an interview. “I’m extremely
upset about it. I feel defrauded.”

Decker is in good company: 482,000 Audi and Volkswagen cars
sold in recent years came with software that turns on full
pollution controls only when the car is undergoing emissions
testing. At other times, the cars pollute 10 times to 40 times
the legal limits.

The U.S. Justice Department, the Environmental Protection
Agency and regulators in California are all investigating.
Eventually, the cars may be recalled and cash settlements — or
a buyback like Decker wants — may be negotiated. Volkswagen has
suspended sales of the affected models in the meantime.

Edmunds.com, which operates an online car-buying guide, is
advising Volkswagen owners to hold onto theirs for now — if for
no other reason than they’re likely to get lower prices in a
sale or a trade-in at a dealer. Owners who bought diesels for
their environmental benefits may feel a moral objection to
driving them until there’s an emission fix, said Jessica
Caldwell, the website’s director of industry analysis.

EPA Recalls

“The good news for these owners is that there is no
imminent safety threat in driving these vehicles,” Caldwell
said. “But until Volkswagen reveals a plan for how they will
either buy back the cars or fix them so that they truly meet
emissions standards, all affected owners will have to wait and
see.”

The affected vehicles are diesel-powered versions of some
of VW’s most popular U.S. cars: the Beetle, the Jetta, the Golf
and the Passat for model years 2009-2015. The Audi A3 is also
part of the investigation.

The cars haven’t been recalled, but the EPA has the power
and expects to invoke it, according to agency spokeswoman Liz
Purchia. Vehicle owners will get notices after Volkswagen and
Audi have developed a way to fix the cars’ emissions controls,
Purchia said.

Justice Department

“Determinations regarding potential penalties and other
remedies will be assessed as part of the investigation EPA has
opened in conjunction with the U.S. Department of Justice,”
Purchia said.

A fix that improves the emissions may reduce on-the-road
performance, said Bill Visnic, an independent auto analyst in
Weirton, West Virginia. It would be very difficult for
Volkswagen to add new pollution-control equipment to the
existing engines, so the only way to fix it may be to cut
horsepower and fuel economy performance to lower the pollution
output once the software is eliminated, he said.

That would diminish one of the primary selling points of
the vehicles.

Decker, a photographer, said he was impressed with the
performance of his Jetta TDI sportwagon, especially compared to
other cars that are environmentally friendly, such as the Toyota
Motor Corp. hybrid Prius.

Sporty Drive

“I settled on the Volkswagen because it was fun and sporty
to drive and the Prius was doggy and slow and wasn’t very
powerful,” Decker said. “It was definitely a consideration to
get a vehicle that was fun to drive and good for the environment
was what I thought I was buying into.”

Decker wants Volkswagen to compensate him for the purchase.
He said he has been in contact with the law firm of Hagens
Berman Sobol Shapiro LLP in Seattle, which announced Sept. 18
that it was filing a federal lawsuit against Volkswagen. The
firm estimates that some consumers paid as much as $7,000 more
for a diesel model.

Consumer Compensation

“I don’t want my car anymore, frankly,” Decker said. “I’d
like Volkswagen to buy it back from me. I really don’t want it.
I don’t want to drive it. I don’t want anything to do with
Volkswagen.”

The primary goal of environmental regulators will be to
clean up emissions. It remains to be seen what kind of
compensation consumers will get. Websites like
VolkswagenOwnersClub.com were abuzz with members asking how they
could join class-action lawsuits and whether emission fixes
would harm their cars’ performance.

All U.S. states follow either federal or California rules
on limiting tailpipe pollution, said Paul Miller, deputy
director of the Northeast States for Coordinated Air Use
Management, an organization that helps set policy for New York,
New Jersey, Massachusetts and five other states.

State Regulators

Regulators probably won’t order cars off the road since
that would punish the drivers, who didn’t do anything wrong, he
said.

“I think what they’re pursuing based on what I’ve seen is a
swift requirement that VW go back at no cost and fix the
software defeat device that they put into the cars,” Miller
said.

In some cases where regulators have determined cars don’t
meet safety or other standards, car owners get cash. Last year,
Ford Motor Co. offered $200 to $1,050 in rebates to 200,000
consumers for inflated fuel-economy claims.

In a recent safety-related recall, the Transportation
Department went even further, forcing Fiat Chrysler to buy back
defective Jeeps. It’s not clear whether the EPA has the same
authority, but with potential fines of as much as $18 billion,
the automaker may be willing to negotiate a settlement.

Company CEO

“We at Volkswagen will do everything that must be done in
order to re-establish the trust that so many people have placed
in us,” VW Chief Executive Officer Martin Winterkorn said on
Saturday. Jeannine Ginivan, a spokeswoman at the company’s North
American headquarters in Herndon, Virginia, declined to comment
beyond Winterkorn’s statement.

Then there are civil lawsuits.

“This is as big a thing as I’ve seen on the legal landscape
in a long time,” said Robert A. Clifford, a Chicago lawyer who
has filed a lawsuit on behalf of VW owners.

Value Loss

While it’s too early to say how VW diesel owners would be
compensated, possibilities include payment for a vehicle’s loss
of value, punitive damages for the company’s intentional
misconduct and even money for people’s emotional distress,
according to Clifford, a partner with Clifford Law Offices.

“This is one of those cases where the creative juices of
the organized bar are going to come out in full display,” he
said.

Consumers who own cars that aren’t doing what they’re
intended to do will expect compensation, said Mark Rechtin,
Consumer Reports autos editor.

Loyal Customers

“If you get fewer horsepower, or the fuel economy is what
you’d get in a cheaper gasoline version of the same car, what’s
the damage to your wallet?” Rechtin said.

Even though Volkswagen has admitted it fooled the EPA’s
tests, some loyal customers say they remain skeptical about the
findings.

“I think it’s too early to throw Volkswagen under the bus,”
Perry Meade, a Volkswagen collector from Greenfield, Indiana,
said in an interview.

Among the almost 100 Volkswagens Meade has owned in the
last 25 years is a Jetta diesel with about 300,000 miles on it,
he said. While that car was built before the alleged fraud began
in 2009, he said he is considering buying a new one.

“They better not quit selling diesels here,” he said. “I
will be upset.”

Meade, whose City of First Volkswagen Club in Kokomo,
Indiana, is holding an Oktoberfest “cruise-in” Sept. 25, said he
wouldn’t mind if emission fixes harmed performance on diesel
models.

“I’m fine with losing a little bit of horsepower to have
the longevity and reliability of a good power plant,” he said.

To contact the reporters on this story:
Jeff Plungis in Washington at
jplungis@bloomberg.net;
Alan Levin in Washington at
alevin24@bloomberg.net;
Alison Vekshin in San Francisco at
avekshin@bloomberg.net

To contact the editors responsible for this story:
Jon Morgan at
jmorgan97@bloomberg.net
Michael B. Marois

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