VW and Audi Settle Class Action Suit Over Engine Sludge
From the New York Times
By CHRISTOPHER JENSEN
September 29, 2010, 5:59 PM
The Volkswagen Group of America has tentatively settled a class-action suit claiming that the engines of nearly a half million VWs and Audis were prone to damage from sludge, and that the automaker did not provide enough help to owners.
Under the agreement, Volkswagen would pay at least 50 percent of the cost of fixing the engines, according to documents filed in United States District Court in Boston. Judge Joseph L. Tauro is scheduled to consider whether to give final approval to the settlement in March.
The vehicles involved are the 1997–2004 Audi A4 (sedan, wagon and convertible variants) and the 1998–2004 VW Passat with the 1.8-liter 4-cylinder engine. Combined, almost 480,000 vehicles are covered. Some owners complained they had to pay $4,000 to $8,000 for repairs.
Sludge is a thickening of the oil created as moisture and contaminants build up and break down the oil, causing it to gel and reducing the oil flow and lubrication. The problem, according to the suit, is that the VWs and Audis have “an undersized 3.7 quart oil supply, which provides an inadequate quantity of oil to dissipate the heat” generated by the turbocharged engines. The suit also claims VW committed fraud by telling owners it was their fault for not changing the oil often enough.
In agreeing to settle the case, Volkswagen Group of America, which sells VWs and Audis, denied any wrongdoing.
In 2004, Volkswagen and Audi addressed the sludge problem by extending the warranty to eight years and unlimited mileage, and by promising to help consumers who could prove they changed the oil according to the manufacturer’s recommendations. But some consumers complained to theCenter for Auto Safety that VW and Audi rejected their claims if they missed only one oil change or were a few miles late. That left them facing expensive repairs.
In a 2005 interview with The Plain Dealer of Cleveland, Len Hunt, who was then vice president of VW, said he thought the requirements for consumers to get reimbursed were too strict. “I think we were a little Teutonic in our rules,” he said.
“When you’ve got a reputation for not such stellar quality, you’ve to treat the customer properly. Sometimes your rules and regulations and the culture of the company can be a little bit harsh when it gets translated down to the customer level,” he said. “We’ve got to have some latitude in there.”
VW then eased the restrictions on sludge claims.
According to court documents, the new settlement appears to make it even easier for consumers to be reimbursed. These are the two major provisions of the tentative settlement:
• The automaker will compensate owners for 100 percent of the repair costs if they can prove “that the last two required oil changes prior to the sludge-related problem or engine failure were performed within the recommended time and mileage intervals, with a permissible variance of 20 percent of the time and mileage intervals.”
• The automaker will compensate owners for 50 percent of the repair cost “where the settlement class member cannot submit proof that the last two required oil changes prior to the sludge-related problem or engine failure were performed within the recommended time and mileage.”
It is not yet clear how much the plaintiffs’ lawyers will be paid. They are to submit a bill later this fall for consideration by the judge. The lawyers for the plaintiffs were not available or declined to discuss details of the case. A spokeswoman for VW said the company had no comment.
