Audi Plans to Settle Suit Over Cars : But Consumer Groups Say the Agreement Is a Bad Deal
Audi of America Inc. said Wednesday that it was vindicated by a proposed settlement of a class-action lawsuit charging that some of its cars accelerate on their own, but consumer advocates called the agreement a bad deal.
Under the proposal, Audi agreed to offer rebates of $300 to $2,000 to 390,000 current or former owners of Audi 5000 sedans with automatic transmissions--if they buy a new Audi between Sept. 1, 1988, and June 30, 1991. The deal applies to Audi 5000 sedans built 1978-86.
As part of the proposal, which still must be approved by a judge, Audi acknowledged no liability, and attorneys who sued the company admitted that they couldn’t prove any defect in Audi’s cars caused sudden, unintended acceleration.
The company, based in Troy, Mich., has been plagued with allegations that its Audi 5000 sedans with automatic transmissions sometimes accelerate on their own and have caused some drivers to lose control of the vehicles. Similar allegations of unexplained acceleration problems also have been leveled against other major auto makers.
Called ‘A Victory’
“We’ve said all along there is nothing wrong with our cars, there is no defect causing unintended acceleration,” Audi spokesman Tom McDonald. The settlement “tells us that these allegations of unintended acceleration are more unfounded now than when they were first raised.
“I’d say it’s a victory. We’ve taken a terrible drumming over the last 2 1/2 years at the hands of people who are hysterical, who’ve made outrageous claims and can’t back them up. We are coming out the winner.”
But two consumer groups criticized the proposed settlement and vowed to try to persuade Cook County Circuit Judge Harold Siegan to reject it. Siegan has scheduled a July 26 hearing on the proposed settlement.
“I think it’s grossly inadequate,” said Clarence Ditlow of the Center for Auto Safety, a Washington-based group that is investigating the problem of sudden acceleration in cars. “If any individual has had a sudden acceleration problem with an Audi car, probably the last thing they want to do is get another Audi.”
Could Sue Individually
The center, founded by Ralph Nader, contends that at least 1,650 accidents have been linked to acceleration surges when the Audi 5000 was shifted from park into gear, causing 402 injuries and five deaths, said Jeff Schroeder, a vehicle safety investigator with the group.
The lawsuit, filed in March, 1987, sought to compensate Audi owners for a loss in resale value caused by an allegedly defective automatic transmission.
“In essence, Audi is using the court as part of a marketing program,” said Mark Steinbach, an attorney for the Audi Victims Network, a group formed to pressure the government to investigate the sudden acceleration problem.
Under the proposed settlement, car owners would get cash payments or rebates on a sliding scale depending on the model year of the auto they owned or leased and the date they buy a new Audi. They would have until June 30, 1991, to buy a new Audi.
For instance, the owner of a 1986 Audi 5000 who buys a new 1988 model of any type of Audi car before June 30, 1989, would receive a $2,000 rebate that could either be taken in cash or applied toward the purchase. Audis sell from $18,000 to $35,000, McDonald said.
Aron Robinson, one of the attorneys who handled the class-action suit filed early last year in Chicago, said Audi owners could opt out of the settlement and sue individually.
