VW taps Ken Feinberg for its diesel compensation plan
DETROIT - Volkswagen (VLKAY) has hired Washington lawyer Kenneth Feinberg to figure out a way to compensate owners of diesel-powered cars that the company rigged to cheat on emissions tests.
Feinberg is among the nation's top compensation experts and has been praised for handling victims' compensation programs in the General Motors (GM) ignition switch scandal, BP's (BP) Gulf oil spill and the Boston Marathon bombing among other cases.
The German automaker said in a statement Thursday that Feinberg will design and administer an independent claims program for people who own both 2-liter four-cylinder and 3-liter six-cylinder diesel cars. More than a half-million vehicles in the U.S. with both engines have software that cheats on emissions tests, and several federal agencies are investigating Volkswagen's conduct.
Feinberg's extensive experience in handling complex claims "will help to guide us as we move forward to make things right with our customers," Michael Horn, VW's U.S. CEO, said in the statement. The company said Feinberg will develop a "fair and swift" program.
Volkswagen has admitted to installing software on 482,000 four-cylinder diesel engines in the U.S. that turns on pollution controls for government tests and shuts them off when cars are driven on roads. The software can detect when the cars are on a treadmill-like device called a dynamometer, which governments use for the tests. The U.S. Environmental Protection Agency says these cars can emit up to 40 times more harmful nitrogen oxide pollution than allowed under the Clean Air Act.
In addition, the EPA and California Air Resources Board have accused VW of cheating on six-cylinder diesels. VW has said suspect software is on about 85,000 of the bigger vehicles.
Several models from the Volkswagen, Audi and Porsche brands dating to the 2009 model year are included in the scandal.
Feinberg said in a statement that he'll start work immediately. "We hope to have a claims program designed as expeditiously as possible," he said, adding that he would seek input from VW, owners, lawyers and other interested parties.
Volkswagen has submitted plans to fix the four-cylinder cars to the EPA and CARB, which are evaluating them. CARB must respond to VW by Tuesday.