Americans who bought diesel-powered Volkswagens with deceptive emissions equipment will be getting buybacks and compensation that, in some cases, will be in the tens of thousands of dollars. That's costing VW $15 billion.
Europeans similarly victimized? Nada. VW's CEO Matthias Müller made that clear the other day and he was fairly blunt about the reason: the U.S. settlement affects fewer than 500,000 consumers while in Europe the figure is nine million.
You don't have to be Einstein to figure out that VW would sink under the weight of similar payments in Europe. Besides, said Müller, U.S. air quality standards are higher than Europe's, which makes it harder to successfully rejigger the American VWs. Europe is friendlier to diesels in general and a bit of tweaking should enable the Euro VWs to meet prevailing standards, he said.
Not even a little token payment?
Nein, nee, nö, nä, na, never, said Müller.
Comparable payment demanded
But that may not be the last word. The European Commission and class-action lawyers have been making noises about holding VW's feet to the fire after the historic U.S. settlement announced last week. Fifteen billion dollars is a lot of money in anyone's estimation, and it is also the largest such settlement ever agreed to by an automaker in the United States.
European consumers think they should also be compensated for being deceived by Volkswagen, which belatedly admitted to using deceptive software to make its TDI "clean diesels" appear cleaner than they actually are.
“Volkswagen should voluntarily provide European car owners with compensation that is comparable to what it is paying U.S. customers,” European Union Industrial Commissioner Elzbieta Bienkowska said last week, according to the Wall Street Journal.
Music to Herr Müller's ears this is not. It's estimated it would cost upwards of $44 billion to make similar payments to European VW customers, a sum too large for even an industrial Goliath like Volkswagen to swallow.
VW is now in the midst of recalling its European models equipped with the deceptive software and says it will be able to retune them to meet emissions standards. But consumers across the pond, just like those in the U.S., fear the changes will make their peppy little cars less peppy or worsen their gas mileage. Or both.
Any way you look at it, it's the rock-and-hard-place dilemma. You might say that VW has backed into a parking space so tight it can't get out of it. While the drama plays out in Europe, American consumers should pocket their settlement money and hit the road while they still can.