Volkswagen deals with multiple lawsuits, costing billions of euros

By Money Times

Oct 22, 2015 09:43 AM EDT

Numerous possible class-action proceeding have been filed in Michigan against the German automaker Volkswagen due to emission scandals.  US regulators are coming up with more questions of the car behemoth.

The overlong complaints filed in Detroit federal court say that Volkswagen deceived both federal and state emissions standards by installing the "defeat device" in about 482,000 Audi and Volkswagen vehicles sold in the US since 2009.  VW already deals with fines costing billions of dollars, a criminal investigation, and several state investigations as part of the global cheating scandal, which have consumed the carmaker in recent weeks, as reported by The Guardian.

The lawsuits, almost having the same language, say VW promoted vehicles with "extremely high fuel mileage coupled with low emissions".  However, the vehicles were installed with defeat device enabling them to deceive emissions test.

"Put simply, [Volkswagen] lied and continued to lie over a period of years," the complaint stated.

Seattle-based Keller Rohrback LLP filed complaints on Tuesday and Wednesday.  As informed to the Guardian, there will be upcoming lawsuits after VW testified before Congress earlier this month.  The new round of complaints follows another batch the company filed in September.

One of the attorneys on the case, Gretchen Freeman Cappio said the firm has been "utterly slammed" with calls and emails from consumers.  Keller Rohrback is now representing plaintiffs from nearly every state in the US.

Richard East, a London-based co-managing partner of the international law firm Quinn Emanuel, provided the shareholder damages figure.  He informed the Daily Telegraph shareholders should not be responsible for the losses, including the £25bn already wiped off the country's value and further costs from charges and penalties, because Volkswagen failed to "provide relevant disclosure" about the "defeat device" it now claims it installed to vehicles, according to The Week.

It's been a hard time for the largest car maker as French police raided its headquarters and other offices.  VW confirmed to the Financial Times that there has been a raid, saying that "we are co-operating fully with the authorities".

Matthias Muller, VW's new chief executive, has delivered an upbeat message to company managers and promise it will rebound  from the global emissions scandal in "two to three years". 

His comments about the prospect of cutbacks come a few days after the company announced it would look to make savings of around €1bn every year as it readies itself for the huge recall costs, fines, and litigation.  So far, Volkswagen has set aside €6.5bn to fix vehicles that deceived emission tests, but the overall bill will almost certainly be much higher.

However, there are many analysts backing the company to survive.  Arndt Ellinghorst, Evercore automotive head, said most companies "come out of crisis mode stronger than before" and that "VW has a huge opportunity to fix the diesel issues, tackle its morbid culture, cut costs and return revitalized".

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