Volkswagen Screwed Europeans And The Backlash May Spell Its Demise


Europeans know how to fight back against companies that claim to be too big to fail.

Don't bite the hand that feeds you they say, but as any crate trained dog knows, it's also wise to refrain from pissing where you sleep. As the largest automaker on Earth, Volkswagen couldn't afford to not pay the steep fines that US regulators demanded because it couldn't afford to lose US customers. But over in VW's home continent of Europe, things have played out differently. The New York Times reports that European regulator's lax penalties for one of the region's largest employers have left Volkswagen car buyers with a sour taste.

That's something they simply won't stand for, and now a number of law firms in Europe have teamed with online services to recruit affected customers for a suit that has the ability to snowball into the largest consumer action case seen in Europe. While US buyers of the tainted diesels may as well have won the lottery, with some owners getting up to $10,000 in reimbursement cash on top of a compliant diesel, European buyers have to make do with a software update and a plastic flow transformer tube that increases airflow to the engine and reduces emissions as their only apology gift. This creates a huge problem for two main reasons. First is the fact that the engine revisions lower fuel economy, forcing owners to buy more diesel to cover the same ground.

Second, the resale values for second-hand diesels have plummeted, meaning that owners are now saddled with a larger financial burden with no help from the incriminated automaker. European laws make it tough for VW customers to sue the company, especially since VW is a significant contributor to the European economy and relegates the company into the "too big to fail" category. If the group of owners lose, they could be responsible for both their legal fees and Volkswagen's. The recruiting services are attempting to exploit a loophole that lets third party investors pay the legal fees in exchange for a portion of the collection money, lessening the risk to the owners who are already suffering the cash loss if the worst-case scenario occurs.

Owners in Europe are only seeking compensation of as little as $5,600 per vehicle, but the fact that Europe is home to 8.5 million tainted diesels to North America's 800,000 means that the blow could be severe to VW. Ultimately, all three parties, the owners, European governments, and Volkswagen, will need to work together to ensure that owners get their fair share of compensation without bringing down the giant. For the time being, Volkswagen has dismissed European owners, citing the fact that laws protect it from seeing harsh punishments, but owners are holding strong. As some EU countries and individual municipalities are beginning to take the side of the affected owners, VW could ultimately be forced to cough up the dough.

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