Judge Accuses Former VW Boss of Lying, New Class-action Suit in the Works
A judge hearing a case brought by investors against Volkswagen has deemed its former corporate head, Martin Winterkorn, was too slow in addressing the emissions test cheating that steered the automotive giant into colossal U.S. fines. It’s an early blow against the German company in a suit seeking $10.6 billion in damages for stock losses suffered when the scandal finally became public.
“Anyone acting in good faith would have followed up on this information,” Judge Christian Jaede of the ex-CEO during the second day of hearings held at the Braunschweig higher regional court. “This appears not to have happened.”
According to Reuters, Jaede accused Winterkorn of “dragging his feet” after a top-level management meeting discussed how to best deal with U.S. regulators who were threatening to ban VW because of excessive pollution levels. That gathering occurred roughly two months before the U.S. Environmental Protection Agency issued a notice of violation in September of 2015 and the scandal became public.
The judge continued by saying it was unclear why Volkswagen neglected to put out a statement after finding that engine software on numerous diesel models had been manipulated to circumvent emission testing, adding that it was reasonable to assume Winterkorn knew about the emissions cheating far earlier than claimed.
Thomas Liebscher, a lawyer for VW, said it would be unfair to assume the chief executive knew how the company’s engine management software worked. Volkswagen’s official defense is that no high-ranking official had any knowledge of the defeat devices prior to the company’s first official announcement. However, years of investigative efforts have placed those claims on some rather shaky ground.
Winterkorn resigned shortly after the scandal broke. Last year, he told German lawmakers he learned of VW’s illegal activities at roughly the same time the organization publicly admitted to them. He currently faces conspiracy charges in the United States but is in no danger of being extradited from Germany to stand trial there.
Meanwhile, a consumer rights group said it will file a class-action lawsuit against Volkswagen on Wednesday over the manipulation of emissions software. It’s seeking compensation for up to 2 million owners of the affected diesel models.
A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.
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I can see and smell more unburned diesel coming from a single tractor-trailer, when a good mile behind them on the interstate - than a huge number of little Golf diesels. But, by God, some people won't be happy until VW pays all of the Earth's financial reserves as fines; I'm sure they had dreamed of VW going bankrupt, and were disappointed when that didn't happen.
I can buy that for most of the time frame in question that top brass did not know, or it is plausible that they did not know about the cheating. I'm sure at some point though engineers ran it up the flag pole to at least some of the execs. What I don't buy is that as soon as wind of the scandal was approaching, top brass didn't get a head's up. "Ummmmm, yeah, soooooo, better get out an umbrella because there is a massive $hitstorm in the forecast." Something to that effect, but well ahead of the EPA announcing the cheating.