Chicago-area auto dealer sues VW over diesel scandal – Chicago Tribune
Chicago-area auto dealer Ed Napleton is suing Volkswagen in what he hopes will become a nationwide class-action suit joined by other dealers over the automaker’s handling of its diesel emissions scandal.
The highly unusual move — dealers don’t normally sue the brands upon which their business rely — reflects the huge slump in Volkswagen sales since it last year admitted it fitted software that allowed 600,000 of its U.S. market diesel-engined cars to cheat on exhaust emissions tests.
While Volkswagen dealers nationwide have been left with lots stuffed with diesel autos they can’t sell, and the tarnished Volkswagen brand saw worldwide sales fall for the first time in 13 years last year, Napleton says in a federal lawsuit filed late Wednesday that it has particular reason to be aggrieved.
On Sept. 15, fully two weeks after Volkswagen admitted to regulators that it had fitted “defeat devices” to cheat emissions testing, but three days before the scandal was made public, it sold the third-generation auto dealer an Urbana dealership for “top dollar,” the lawsuit states.
Napleton, whose grandfather opened his first auto dealership on Chicago’s South Side in 1931, was not told about the diesel scandal which was “about to toss the Volkswagen brand value off a proverbial cliff,” according to the suit, which accuses Volkswagen of “remarkable hubris and little care for its dealers, customers, and our planet as a whole.”
In an interview Thursday, Napleton described Volkswagen’s handling of the sale of the Urbana dealership as “sickening,” but said there was little he could say to Volkswagen executives after he’d signed the deal. “The milk was already out of the bottle,” he said.
The automaker last month fired its U.S. chief Michael Horn. But Napleton said that he was unimpressed with the company’s attempts to recover from the “dieselgate” crisis. “I think what they’ve done is terrible,” he said. “They’ve shifted their management team around … but there’s no direction or serious attempt to address the deliberate damage that they did to dealerships.”
Volkswagen spokeswoman Jeannine Ginivan said that Volkswagen is reviewing Napleton’s complaint, but declined to comment on the case beyond an emailed statement that said Volkswagen is working to quickly resolve its problems with federal regulators and “to earn back the trust of our customers and dealers and the public.”
The Volkswagen cheat device allowed its diesel engines to pass emissions tests, while in normal use emitting up to 40 times the legally allowed amount of nitrogen oxide, which can cause human respiratory problems. A federal judge has given the company until April 21 to come up with a fix for the problem on existing vehicles.
But Volkswagen also faces what’s likely to be a huge fine by the Environmental Protection Agency, and class-action lawsuits brought by aggrieved consumers, as well as a false-advertising lawsuit brought by the Federal Trade Commission. The Napleton suit adds an additional fighting front for Volkswagen executives, who have tried to keep dealerships on their side.
The Napletons own three Volkswagen dealerships in Florida and Illinois, and more than 50 dealerships nationwide. According to the suit, Ed Napleton has lost more than $5 million but brought the case because he “believes that with his sizable presence in the marketplace comes a responsibility to stand up for dealerships large and small.”
“The Volkswagen emissions fraud has … caused great harm to franchise dealers like Plaintiffs whose profits have been erased and whose dealerships have plummeted in value due to the inability to sell tens of thousands of affected vehicles and the significant decline in brand value for all Volkswagen vehicles as a result of Volkswagen’s purposeful fraud and deceit,” the lawsuit states.