Volkswagen has agreed to pay its U.S. dealers up to $1.2 billion to compensate them for losses suffered as a result of the company’s emissions cheating scandal, according to a settlement agreement filed Friday in federal court in San Francisco.

The dealers are expected to receive about $1.85 million each, but they can choose to opt out of the deal and pursue their own lawsuits against Volkswagen. A judge still has to approve the settlement before it can go into effect.

Volkswagen’s U.S. sales have fallen since the scandal first came to light a year ago, and the agreement will help compensate dealers for what they said was a loss in value of their dealerships.

Several Los Angeles-area Volkswagen dealerships declined to comment about the settlement, with some referring questions to their attorneys.

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“The Volkswagen-branded franchise dealer class action settlement filed today represents an outstanding result for Volkswagen’s 652 franchise dealers as of Sept. 18, 2015,” said the dealers’ lead counsel Steve Berman, in a statement.

Volkswagen declined comment beyond a statement it issued Friday noting that the settlement “is not intended to apply to or affect Volkswagen’s obligations under the laws or regulations of any jurisdiction outside the United States.”

The automaker previously reached an agreement with attorneys for U.S. vehicle owners. That deal calls for it to spend up to $10 billion buying back or repairing about 475,000 vehicles involved in its scandal and paying their owners an additional $5,100 to $10,000 each.

That settlement also includes more than $2.5 billion for unspecified environmental mitigation and an additional $2 billion to promote zero-emissions vehicles.

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The dealer payout is yet another financial hit for Volkswagen, which disclosed in April that the scandal had cost the company $18.2 billion in 2015 alone.

Karl Brauer, executive publisher at Kelley Blue Book, said the billions Volkswagen is paying related to the emissions scandal sends a strong message to the industry about sidestepping regulations.

“This is a massive tab,” Brauer said. “Does this represent a strong enough message to Volkswagen and all other manufacturers? I think it does.”

While the dealers’ cut is a fraction of the overall payout, Brauer said they are receiving a substantial benefit from the agreement, which will be disbursed over 18 months.

“It’s hard to have but so much sympathy for the dealers when they’re going to get $100,000 a month for a year and a half,” Brauer said.

Also on Friday, attorneys for vehicle owners said in a court filing that more than 311,000 people have registered for compensation under automaker’s vehicle-owner deal and less than 3,300 people have opted out.

“There is resounding support for this consumer class settlement and the substantial benefits it provides,” Elizabeth Cabraser, lead attorney for Volkswagen owners, said in a statement.

U.S. District Court Judge Charles R. Breyer gave the vehicle owners’ deal preliminary approval in July, and he is expected to make a final decision on Oct. 18.

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It does not cover about 85,000 more-powerful Volkswagens and Audis with 3-liter engines also caught up in the emissions scandal.

The scandal erupted in September 2015 when the California Air Resources Board and the EPA said they had discovered software in certain 2-liter VW diesel vehicles that made the engines run more cleanly during emissions testings. In regular driving, the vehicles were found to spew up to 40 times the legally allowed amount of nitrogen oxide.

Regulators later said the software, called a defeat device, also was installed in some Volkswagen and Audi 3.0-liter diesel vehicles.

Last month, more details about the scandal emerged when a longtime Volkswagen engineer from Southern California pleaded guilty in federal court to charges he helped design and implement the software.

James Robert Liang, 62, a Newbury Park resident, pleaded guilty in federal court in Detroit to a single charge of conspiring to defraud the United States, commit wire fraud and violate the Clean Air Act. He faces up to five years in prison and a $250,000 fine.

Liang had worked in Volkswagen’s diesel development department in Wolfsburg, Germany, starting in 1983, before transferring to the company’s test facility in Oxnard. In 2006, he and other VW employees started work on a new diesel engine for U.S. vehicles, the plea agreement said.

When they realized they could not design an engine that would adhere to the strict U.S. standards while also delivering solid road performance, they created the defeat devices, according to court papers.

If the software detected the vehicle was undergoing a test, it told the car to emit only enough nitrogen oxide to pass the inspection. Otherwise, court papers said, it permitted the cars to pump substantially more nitrogen oxide into the atmosphere.

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Liang said he and his co-conspirators “misrepresented” that the VW diesel vehicles met U.S. emissions standards during certification meetings for new cars with the U.S. Environmental Protection Agency and the California Air Resources Board and “hid the existence of the defeat device from regulators,” according to the plea agreement.

Liang is cooperating with the government in an ongoing criminal investigation, the U.S. Department of Justice said last month. Such cooperation is generally a sign that federal prosecutors are seeking to charge others in a case.

The Associated Press and staff writers Samantha Masunaga and Del Quentin Wilber contributed to this article.

UPDATES:

3:30 p.m.: This article was updated with comments from the dealers’ attorney and industry expert Karl Brauer, as well as some additional details on the settlement.

1 p.m.: This article was updated with information about a plea agreement last month and additional financial details.

This article was originally published at 11:10 a.m.</s>SAN FRANCISCO (AP) — Volkswagen has agreed to pay its U.S. dealers up to $1.2 billion to compensate them for losses they said they suffered as a result of the company’s emissions cheating scandal.

Attorneys for the carmaker and dealers included the figure in a settlement agreement filed in federal court in San Francisco on Friday. Under the terms of the deal, dealers can also choose to opt out and pursue their own lawsuits against Volkswagen.

A judge still has to approve the settlement before it can go into effect.

Volkswagen previously reached an agreement with attorneys for car owners. That deal calls for it to spend up to $10 billion buying back or repairing about 475,000 vehicles involved in its scandal.

Attorneys for vehicle owners said in a court filing on Friday that more than 311,000 people have registered for the deal.</s>WOLFSBURG (dpa-AFX) - Volkswagen AG (VKW.L, VLKAF.PK, VOW.BE) confirmed late Friday in a federal court filing that it has agreed to pay up to $1.21 billion to settle claims of its 652 U.S. dealerships related the emissions scandal.



The settlement, which reflects an average payout of $1.85 million to dealers, must still be approved by a judge in San Francisco.



The US dealers had suffered huge losses in the past year after the German carmaker's sales in US plunged after the firm admitted that it had equipped about 11 million diesel vehicles with illegal software to cheat on American pollution tests.



The latest settlement is separate from a recent $14.7 billion agreement between the company, the U.S. government, California regulators and diesel car owners.



According to a court filing Friday, 311,209 US diesel car owners among the total affected owners of 475,000, have registered for the settlement offer. Meanwhile, some 3,298 Volkswagen owners opted out of the deal.



The company has also agreed to take back the affected diesel cars still owned by dealers at the same terms offered to consumers.



Meanwhile, in late September, Volkswagen shareholders filed new lawsuits in Germany seeking a total of 8.2 billion euros or about $9.2 billion in damages, as they lost billions as the carmaker's share value plunged post the scandal. As per reports, more than 1,400 complaints were filed in a regional court in Germany's Braunschweig, near Volkswagen's headquarters in Wolfsburg.



Copyright RTT News/dpa-AFX</s>SAN FRANCISCO — Volkswagen has agreed to pay its U.S. dealers up to $1.2 billion to compensate them for losses they said they suffered as a result of the company’s emissions cheating scandal, according to a settlement agreement filed Friday in federal court in San Francisco.

Under the terms of the deal, dealers can choose to opt out and pursue their own lawsuits against Volkswagen. A judge still has to approve the settlement before it can go into effect.

Volkswagen previously reached an agreement with attorneys for car owners. That deal calls for it to spend up to $10 billion buying back or repairing about 475,000 vehicles involved in its scandal and paying their owners an additional $5,100 to $10,000 each.

Details about the vehicle repairs have not been finalized.

Attorneys for vehicle owners said in a court filing on Friday that more than 311,000 people have registered for the deal and less than 3,300 people have opted out. “There is resounding support for this consumer class settlement and the substantial benefits it provides,” Elizabeth Cabraser, lead attorney for Volkswagen owners, said in a statement.

The settlement also includes $2.7 billion for unspecified environmental mitigation and an additional $2 billion to promote zero-emissions vehicles.

U.S. District Court Judge Charles Breyer gave the deal preliminary approval in July, and he is expected to make a final decision on Oct. 18.

The deal does not cover about 85,000 more-powerful Volkswagens and Audis with 3-liter engines also caught up in the emissions scandal.</s>San Francisco. German auto giant Volkswagen has agreed to pay US suppliers some $1.2 billion to settle claims emanating from the “Dieselgate” pollution scandal, the firm and suppliers said late yesterday.

Volkswagen issued a statement saying it had reached an agreement in principle with VW-branded suppliers after more than a month finalizing the accord.

“Under the proposed agreement, Volkswagen has agreed to make a maximum total of $1.208 billion in cash payments to eligible dealers and to provide additional benefits to resolve alleged past, current and future claims of losses in franchise value,” the statement read.

Both parties had announced an agreement in principle on August 25.

The finalized accord was filed with the district court for the Northern District of California in San Francisco where it is subject to the approval of a judge.

The cash -- half up front and half in monthly instalments over 18 months -- will be shared among 652 dealers, lawyers representing them said, for an average settlement of around $1.9 million.

Volkswagen has also agreed to buy back affected vehicles still in dealer lots.

The deal comes on top of the $14.7 billion in US compensation and fines Volkswagen has already agreed to pay regarding some 480,000 two-liter models.

The firm has yet to find a solution regarding a further 80,000 3-liter models affected by the scam.

US authorities have given the company until the end of this month to show if they can be fixed.

Volkswagen has been struggling to rise above the fallout of a scandal which emerged in September 2015 when it admitted installing so-called “defeat devices” in 11 million diesel vehicles worldwide, which increase exhaust treatment when the car detects it is undergoing regulatory off-road tests.</s>VW's dealers will receive an average of $1.85 million each on average over 18 months under the settlement that was first announced in principle in August.

Separately, the U.S. Justice Department, Federal Trade Commission and lawyers for owners of 475,000 polluting diesel cars filed legal papers late Friday asking a federal judge to grant final approval to buy-back offers and diesel remediation efforts at an Oct. 18 court hearing.

A filing by lawyers for company dealers says Volkswagen won't sell any U.S. diesel vehicles for the 2016 and 2017 model years. The company, which has been barred from selling all diesel vehicles in the United States since late 2015, said earlier this month it is uncertain whether it will ever sell diesel vehicles in the United States again.

As part of the settlement with VW brand dealers, the company will continue making some incentive payments to dealers, buy back diesel vehicles that dealers can't sell and suspend capital improvements for two years that it wanted dealers to make. A federal judge must still approve the settlement.

Volkswagen still faces billions of dollars in potential civil and potential criminal U.S. fines for violating emissions laws, as well as a possible costly buy-back of 85,000 vehicles equipped with 3.0 liter diesel engines if it can't convince regulators that they can be fixed.

The Justice Department said Friday in a court filing that regulators are still working on "a technical solution that reduces the emissions of these vehicles."

Reuters reported that Volkswagen has held talks in recent months with the Justice Department about settling the criminal investigation. "The United States will continue to vigorously pursue its claims for civil penalties to fully hold (Volkswagen) accountable," the Justice Department filing said Friday.

VW has admitted it installed improper software that deactivated pollution controls on more than 11 million diesel vehicles sold worldwide.

In June, VW agreed buy back 475,0000 U.S. vehicles equipped with 2.0 liter engines at a cost of up to $10.03 billion or offer fixes if regulators approve. To date, about 311,000 owners have already registered to take part in the settlement and only about 3,300 owners have opted out.

VW also agreed to spend up to $5.3 billion to address claims by federal regulators and 44 U.S. states. VW is still in talks with the Justice Department about winning approval for proposed fixes for the 2.0 vehicles.

Under the Justice Department deal, VW will provide $2 billion over 10 years to fund programs to promote construction of electric vehicle charging infrastructure, development of zero-emission ride-sharing fleets and other efforts to boost sales of cars that do not burn petroleum.

VW also agreed to put up $2.7 billion over three years to enable government and tribal agencies to replace old buses or to fund infrastructure to reduce diesel emissions and award states about $600 million.

The Justice Department said it received nearly 1,200 comments on the proposed consent decree but said it was making only some minor mostly technical changes to the agreement.
Volkswagen agrees to pay its U.S. dealers up to US$1.2 billion to compensate them for their losses resulting from the company's emissions cheating scandal.