VW Begins Talks With Dealers About Compensation

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Volkswagen AG agreed to begin talks with VW dealers in the U.S. seeking compensation for financial damages caused by the company’s diesel emissions violations.

The move toward a settlement with dealers comes nearly six weeks after the National Automobile Dealers Association convention, where an off-the-books gathering of hundreds of VW retailers spurred a committee of six dealers, headed by Florida dealer Jason Kuhn, to press VW executives for a relief package on behalf of all 652 VW dealers in the U.S.

Volkswagen and Kuhn, president of Kuhn Automotive Group of Tampa, Fla., confirmed to Automotive News on Wednesday that they had agreed to begin discussions.

Formal negotiations with dealers are not yet underway. The form and amount of the settlement package sought by the committee is unclear, though dealers will likely be asked to waive scandal-related legal claims against the automaker in exchange for a payout.

In addition to financial compensation, Kuhn said dealers want more influence over VW’s U.S. market strategy going forward.

Kuhn, in a statement, said the “dealer investment committee” and VW executives will “likely” meet in person for talks in the next few weeks.

“VW AG has been receptive to our committee, and like a vast majority of the dealers, desires an expeditious and reasonable solution,” Kuhn said. “The tone and tenor of our dialogue with AG to date makes the committee optimistic that we can achieve a positive result.”

“Volkswagen is committed to the U.S. market and appreciates the dealers for their continued loyalty and passion for the brand,” a VW spokeswoman said in a statement, echoing comments made by VW brand chairman Herbert Diess and North America chief Hinrich Woebcken at the NADA make meeting. “The company remains focused on cooperating with government authorities to resolve the diesel emissions issue and rebuilding trust among our dealers, customers, and employees.”

VW is also working with U.S. authorities to finalize agreements to compensate U.S. owners of the affected diesels. VW has until June 21 to present those final pacts to a judge overseeing VW litigation in U.S. District Court in San Francisco.

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