UPDATE 1-GM to unveil plan to compensate owners on fuel economy claims

Wed May 18, 2016 8:24pm EDT
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(Adds details of plan, background)

By David Shepardson

WASHINGTON May 18 (Reuters) - General Motors Co is expected to announce plans to compensate about 130,000 individual U.S. owners of SUVs that had inflated fuel economy labels, sources briefed on the plans said on Wednesday.

The Detroit automaker said on Friday it was temporarily halting sales of about 60,000 new 2016 U.S. SUVs because the vehicles' labels overstated their fuel efficiency. GM plans to compensate owners for the difference in miles per gallon and announce the program in the coming week, the sources said.

GM resumed sales once the new labels with the correct labels arrived at dealerships starting Saturday.

GM is expected to offer a cash compensation program to address the extra costs of driving based on the lower fuel economy, the sources said.

GM Canada is expected to offer a similar compensation program, but it is not clear how many owners are impacted.

GM has sold about 170,000 2016 SUVs in the United States, and about 130,000 are retail sales which will qualify for the compensation program. The remainder of the vehicles were sold to rental car, commercial and fleet buyers. It is not clear how GM will address those owners.

A GM spokesman declined to confirm the program.   Continued...