VW Compensation Plan for U.S. Diesel Owners on Hold

A compensation program being set up for the U.S. owners of Volkswagen’s cheater diesels is in limbo until VW settles with regulators on a plan to fix the vehicles.

“My hands are tied,” attorney Kenneth Feinberg tells Germany’s Frankfurter Allgemeine.

VW hired Feinberg in mid-December to design the program, which he had hoped to launch as soon as mid-February. But he tells the newspaper he can’t move forward with what he describes as “generous” compensation until VW and regulatory officials agree on a remedy to repair 580,000 of the company’s 2.0-liter 4-cylinder and 3.0-liter V-6 diesels.

Feinberg says VW has not yet determined whether affected customers in the U.S. will receive a cash payment, engine repairs, an offer to buy back their vehicles, a replacement car or a combination of those options. The choices hinge on the level of work deemed necessary by the company and environmental agencies.

VW owners appear “quite reasonable” in demanding fair treatment for paying a premium to buy what the company touted as “clean” diesels, according to Feinberg. Owners also face plunging resale values for their cars and SUVs.

Feinberg previously administered compensation plans for victims of the 9/11 terrorist attacks and defective General Motors Co. ignition switches. He notes those programs resulted in acceptance rates of more than 90%, and he seeks a similar success rate for the VW offers.