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Volkswagen Makes 'Goodwill' Gesture To Defrauded Diesel Owners

The $1,000 package of incentives is available to about 480,000 customers with 2-liter, four-cylinder diesel vehicles.
Ralf Hirschberger
AFP/Getty Images
The $1,000 package of incentives is available to about 480,000 customers with 2-liter, four-cylinder diesel vehicles.

Volkswagen is offering its diesel vehicle owners $1,000 in incentives, in what it calls "a first step" toward regaining their loyalty following the scandal over faked emissions tests.

The package is available to about 480,000 customers in the U.S. and Puerto Rico with 2-liter, four-cylinder diesel vehicles. They can apply to receive a $500 prepaid Visa card, a $500 dealership card and three years of free roadside assistance, the company said.

"We are working tirelessly to develop an approved remedy for affected vehicles," Volkswagen's U.S. chief executive, Michael Horn, . "In the meantime we are providing this goodwill package as a first step towards regaining our customers' trust."

Volkswagen has been mired in controversy since acknowledging that software sold in Golf, Jetta, Beetle and Passat models had been programmed to cheat on emissions tests.

The company said its Audi luxury brand would offer the same award starting Friday.

Customers who accept the money will not give up their right to sue, the company said.

A statement jointly issued by U.S. Sens. Richard Blumenthal of Connecticut and Edward Markey of Massachusetts called the $1,000 gift an "insultingly inadequate amount — a fig leaf attempting to hide the true depths of Volkswagen's deception":

"[Volkswagen] should offer every owner who wants to keep her car full compensation for the loss of resale value, fuel economy, and other damage caused by its purposeful deception. Volkswagen should cooperate fully with federal criminal and civil investigations that will provide redress for taxpayers as well as car owners – the company needs to get serious."

Meanwhile, Fitch Ratings said today it was lowering Volkswagen's credit rating by two notches, noting "that the emergence of a fraud of this magnitude, going either unnoticed or uncorrected by top management for so long is not consistent with a rating in the 'A' category." Fitch added:

"The downgrade also reflects the expected direct and indirect financial effects from this crisis including recall costs, fines, lawsuits and legal claims worldwide as well as lost sales and revenue and probable discounts on vehicle sales."

"We believe that changes at the supervisory and management boards since the start of this crisis have been limited and do not seem to reflect a fundamental determination by the company to overhaul its corporate governance and culture."

Copyright 2021 NPR. To see more, visit https://www.npr.org.

Jim Zarroli is an NPR correspondent based in New York. He covers economics and business news.