For months now, Volkswagen has been embroiled in disputes with American regulators, safety experts, European officials and, more recently, consumers. The company has been fighting a multi-front battle, trying to keep itself afloat while refusing to take the kinds of responsibility critics have urged executives to consider. Unfortunately for VW, they now appear to have yet another unhappy group to contend with: dealerships.
Earlier this month a group of three family-owned and operated dealerships based in Illinois and Florida filed suit against Volkswagen. The dealer is claiming that the company intentionally defrauded them (not to mention consumers) when it installed the software on its diesel engines designed to trick government emissions tests.
Specifically, the lawsuit, which is structured as a possible class-action claim, alleges that VW and its executive leadership misled dealers into investing millions of dollars building fancy showrooms designed to market supposedly environmentally friendly vehicles all the while the company was working hard to cheat emissions tests. The lawsuit claims that the eco-conscious reputation of the company was a veneer and that this ended up costing dealers across the country a lot of money.
The dealers are asking that VW compensate them for several things, including the losses suffered from the plummeting value of the vehicles they now find themselves unable to sell as well as the loss in the VW brand. The class-action suit also includes claims related to VW unfairly favoring certain dealers, but that’s a whole other problem for the automaker.
The company has known for some time that it faced a revolt among its once loyal dealerships. A convention was convened recently where executive spoke to hundreds of dealership owners and asked them to put faith in the company yet again, promising to fix the emissions problem and restore sales growth.
Dealers have remained skeptical given the impending deadline a federal judge set requiring VW to agree to a fix for the nearly 600,000 impacted vehicles in the U.S. The court said a resolution must occur by April 21, 2016, and so far no solution appears to be in sight.
Whether the suit by the three dealerships is the sign of things to come or an anomaly remains to be seen. What is clear is that VW has its hands full dealing with the problems it created for itself. The hope is that consumers, who have been harmed the most, do not get lost in the shuffle between regulators, government officials and dealerships.
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