Volkswagen in a drive to appease customers, staff

The logo of German car maker Volkswagen ( VW ) is seen near a cranes of a construction site in Wolfsburg, on November 9, 2015. VW is engulfed in a massive pollution scandal that has so far centred on so-called defeat devices, sophisticated software fitted into diesel engines to skew the results of tests for nitrogen oxide emissions. The embattled auto giant said an internal probe had uncovered "inconsistencies" on carbon emissions as well, affecting not only diesel engines but petrol engines, too. AFP PHOTO / JOHN MACDOUGALL

Volkswagen AG took new steps early this week to appease US customers and German union leaders unhappy with the company’s response to a sweeping emissions cheating scandal that claimed another high-profile executive.

Volkswagen is offering a $1,000 credit, of which half is to be spent at VW and Audi dealerships, to US owners of certain diesel models that do not comply with government emissions standards, VW’s US subsidiary said.

The automaker said eligible US owners of nearly 500,000 VW and Audi models equipped with 2.0 litre TDI diesel engines can apply to receive a $500 prepaid Visa card and a $500 dealership card, and three years of free roadside assistance services.

The move was latest attempt to pacify owners who have been frustrated by how the German automaker plans to fix affected models. The company has warned it could rack up multi-billion-euro costs to remedy the issue and repair the damage to its reputation.

“I guess it’s a very small step in the right direction. But far from what I’d like to see in terms of being compensated,” said Jeff Slagle, a diesel Golf owner in Wilton, Connecticut.

The scandal erupted in September when VW admitted it had rigged US tests for nitrogen oxide emissions. The crisis deepened last week when it said it had understated the carbon dioxide emissions and fuel consumption of vehicles in Europe.

Slagle, who bought his vehicle in 2011, said he was surprised there was still no plans for how to fix the cars: “Even though they’re clearly culpable, somehow they’re in the driver’s seat.” VW has said about 482,000 cars sold in the United States since 2009 with four-cylinder diesel engines had software installed that allowed the engines to pass government tests for smog-forming nitrogen oxide emissions, but pollute at levels far above government limits in normal operation.

The automaker posted details of its “goodwill package” at www.vwdieselinfo.com. Audi had plans to post details of a similar programme.

VW said the customer offer did not cover models equipped with the 3.0 V6 TDI diesel engine, including the Touareg. To qualify for the credit card offer, VW diesel owners must go to the company website, enter a vehicle identification number and provide mileage and contact information. VW will send the cards by mail. To activate the cards, owners then must take the vehicle to the dealer for verification.

VW said customers “don’t have to sign anything” and will not be required to relinquish any legal rights. In Germany, the financial impact of the scandal has exacerbated tensions between Volkswagen management and labour leaders over plans to cut spending by about 1 billion euros ($1.08 billion) per year through 2019 at its core Volkswagen brand operations.

“In the current difficult situation we must take joint decisions which pay heed to the profitability as well as employment,” Chief Executive Matthias Mueller said.

VW’s supervisory board is due to approve spending plans on plants, equipment and technology for coming years at a meeting on November 20.

Separately, Volkswagen said its head of corporate communications, Andreas Lampersbach, quit early this week, joining a wave of departures as the scandal over its manipulation of emissions tests escalates. — AFP