Daily Management Review

Fund Head at Volkswagen says Company to Offer Generous Compensation for US Customers


02/08/2016




Fund Head at Volkswagen says Company to Offer Generous Compensation for US Customers
In a move that is aimed to pacify the US customers, Volkswagen announced offering generous compensation packages to the roughly 600,000 U.S. owners of diesel vehicles who were affected by the emission scandal.

The head of Volkswagen’s claims fund informed the German media about this issue.

Kenneth Feinberg told the Frankfurter Allgemeine Sonntagszeitung that the
German car maker is yet to decide on what form of compensation to be given to the car owners - whether cash would be offered or car buy-back will be undertaken or repairs or replacement of cars would be done.

Feinberg is experienced in matters of compensation as he had previously headed the compensation funds for the September 11, 2001 attacks, BP's Deepwater Horizon oil spill and General Motors' ignition switch crashes.

Its annual shareholders' meeting and the publication of its 2015 results were delayed by Volkswagen on Friday due to the company not being able to put an exact price on its emissions scandal.
 
Europe's leading car maker has still not won approval for a fix for any of the vehicles more than four months after the scandal broke in the United States. A new head of its U.S. legal department was appointed last week to help resolve the case.
 
"My hands are tied as long as VW and the authorities have not overcome their differences," Feinberg told the paper. He added that he was unlikely to meet his goal of setting up the claims fund within 60 to 90 days.

He would be given full authority to set the level and an overwhelming majority of car owners would accept the eventual offer, he said.
 
"Look at my prior cases: 97 percent of the victims of Sept. 11 accepted my offer. At GM and BP it was more than 90 percent, too. That has to be my target for VW," Feinberg said.
 
"It is a purely business transaction, less emotional. I see that from emails I get from vehicle owners, who say things like: 'Mr. Feinberg, I know I haven't lost a relative, I just want to be treated fairly.' They are all quite reasonable," he added.
 
Claims demanding that the emissions damaged the health of claimants were yet to be considered by Feinberg.

"I am inclined to not accept that and tell such people they should sue Volkswagen if they want to," he said.
 
The shares of the company have fallen by 26 percent due to the uncertainty about the financial impact of the scandal on VW's accounts has increased since the start of the year.

It would remain invested in Volkswagen, in which it holds 1.2 percent, said Norway's $850 billion sovereign wealth fund, the world's largest told the German paper.
 
"VW is an important company for Germany, Europe and the world. That's why we will keep our stake as long as the fund and the company exist," the fund's CEO Yngve Slyngstad said.
 
The ownership structure at Volkswagen has been criticized by the fund since 2008. The ownership at the company includes Porsche and Piech families who hold 31.5 percent of the capital but control 50.7 percent of voting rights.
 
 (Source:www.reuters.com)






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