Former Volkswagen CEO Martin Winterkorn is one of five former Volkswagen executives who will be standing trial in a German court over their actions in the diesel emissions cheating scandal.
German prosecutors raided Volkswagen’s Wolfsburg headquarters on Tuesday, continuing their prolonged quest to bust the automaker over a diesel emission scandal that has been more or less settled in the United States since 2017.
Germany must want to do an incredibly thorough job of investigating the automaker — it’s difficult to imagine raiding the same offices over and over being all that fun, especially after VW formally confessed its malfeasance in other parts of the world. However, according to Reuters, prosecutors might be looking for something different this time around. Volkswagen has said it is still cooperating with authorities, but described its latest surprise encounter with them as unfounded.
Methodical German prosecutors have finally made their way to the top of Volkswagen’s executive ranks, charging CEO Herbert Diess and Chairman Hans Dieter Poetsch with stock market manipulation.
On Tuesday, the prosecutor’s office in Braunschweig indicted Diess, Pötsch, and former CEO Martin Winterkorn, accusing the men of withholding information of a looming emissions scandal from investors. Winterkorn, already indicted by U.S. authorities and slapped with a fraud charge in Germany, stepped down shortly after the scandal broke in September 2015.
Diess vows to stay on as VW’s boss as the charges play out.
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.”
Volkswagen Group intends to fire a group of employees implicated in the diesel emissions fraud scandal. German prosecutors in Brunswick have identified an inner circle of 39 “suspicious engineers” it believes contributed directly to the emissions cheating. It’s expected that VW will carry out these terminations as quickly as possible, with additional waves of firings to follow.
According to Handelsblatt, Volkswagen made the decision to cleanse its ranks after being granted access to the prosecution’s investigation files in July. The automaker followed up with a series of employee “interviews” and a month-long review process. VW has already announced the dismissal of six high-ranking employees, with former development head Heinz-Jakob Neußer (Neusser) being the most noteworthy.
Large money transfers initiated by former Volkswagen CEO Martin Winterkorn early last year have German investigators wondering if the executive may have believed a criminal charge was incoming.
Already indicted in the U.S. on fraud charges stemming from the company’s diesel emissions scandal, Winterkorn (seen above with Yoko Ono) remains under a cloud of suspicion in his homeland. Though he’s claimed no early knowledge of the diesel engine manipulation, the former top boss remains under scrutiny from methodical German prosecutors who recently arrested Audi CEO Rupert Stadler.
Recently, the probe’s focus turned to large sums of money leaving the country in the lead-up to the U.S. indictment.
Even though the United States has already penalized and fined the crap out of Volkswagen for selling vehicles equipped with emissions-cheating defeat devices, the company remains in hot water. Earlier this month, Germany imposed a fine of $1.2 billion over the “dieselgate” scandal.
“Volkswagen accepted the fine and it will not lodge an appeal against it,” the company said. “Volkswagen, by doing so, admits its responsibility for the diesel crisis and considers this as a further major step towards the latter being overcome.”
On Monday, the U.S. Ninth Circuit Court of Appeals also upheld a $10 billion settlement between Volkswagen and the owners of 2.0-liter TDI vehicles that came equipped with the illegal software. The ruling pertains to roughly 475,000 customers. VW agreed to offer owners of the 2.0-liter diesels between $5,100 and $10,000 in compensation, in addition to the value of the vehicle.
Volkswagen’s new chief executive officer, Herbert Diess, is believed to have met with the United States’ Department of Justice and Federal Bureau of Investigation last week to discuss the manufacturer’s emissions scandal. Details on the matter are scare at present, but the meeting would explain why the U.S. was willing to provide the CEO with a safe-passage guarantee.
While VW has previously stated its cooperation in various investigations, it declined to comment on Diess’ alleged visit to federal authorities.
Shortly after the United States formally accused former CEO of Volkswagen Martin Winterkorn of criminal wrongdoing related to the company’s diesel emission scandal, it decided to let the company’s new boss know that he’s safe to visit whenever he likes. The U.S. Justice Department has agreed to give Herbert Diess a safe-passage deal that allows him to travel without fear of being arrested.
Diess was also given the country’s assurance that he’ll be given advance notice if prosecutors eventually decide to charge him over the emissions cheating issue. So far as we know, no such deal exists for his predecessor, Matthias Müller, who replaced Winterkorn in September of 2015.
Germany intends to stay on ex-Volkswagen Group CEO Martin Winterkorn after news broke Thursday that the former top executive faces criminal charges in the United States.
The indictment, filed under seal in March, was opened in a U.S. District Court in Detroit on Thursday during VW’s annual meeting in Germany. “If you try to deceive the United States, then you will pay a heavy price,” said U.S. Attorney General Jeff Sessions. “Volkswagen’s scheme to cheat its legal requirements went all the way to the top of the company.”
However, the burden of tangible justice will likely fall on Europe. Germany doesn’t make a habit of extraditing citizens for trial, and it’s still conducting its own investigation into VW Group’s emissions-cheating scandal — which it intends to continue.
“Our investigation strategy does not change just because the Americans have filed charges against Winterkorn,” a spokesman for the prosecutors’ office of Brunswick said on Friday. You’ll have to excuse us for not having much faith Germany’s justice system, as its current strategy appears to involve conducting as many raids as humanly possible without any results.
Former Volkswagen CEO Martin Winterkorn has been charged by U.S. prosecutors with conspiracy and wire fraud, according to an indictment that was unsealed in a Michigan federal court on Thursday. For those of you who have been following the Dieselgate scandal from the beginning, this has been a long time coming.
Winterkorn has been at the epicenter of the emissions-cheating issue since before VW’s earliest admissions and was swiftly removed from his post as the automotive group’s chief executive in 2015. He also had a major falling out with ex-supervisory board chairman Ferdinand Piëch after being confronted on the emissions issue during the Geneva Motor Show.
The two had previously held a very close relationship but a power struggle within the organization appeared to have been brewing for quite some time, making the scandal an important turning point. Piëch became vaguely accusatory of Winterkorn in the aftermath and eventually cut ties with the company and, by extension, his family. All the while Winterkorn was under investigation in both the United States and Germany.
Volkswagen Group is thinking about replacing chief executive Matthias Müller with the head of its VW brand, Herbert Diess. According to inside sources, however, the decision already appears to have been made. When questioned about staffing changes, the company said it was “considering evolving the leadership structure” as it relates to the the management board — which could extend to a change in CEOs.
An automaker typically wouldn’t even hint at such a thing if it wasn’t already a done deal. That means Müller is almost guaranteed to be moving on soon, bringing his extended history with the company to a close. A true company man, Matthias completed a tooling apprenticeship at Audi in 1977, before a reprieve where he left to study computer engineering. Returning to the brand in 1984, Müller moved up the ranks swiftly — eventually becoming CEO of Porsche in 2010 and replacing Martin Winterkorn as Volkswagen AG’s CEO during 2015’s diesel emissions scandal.
While his contract is good until 2020, the company could still press for an early retirement. In fact, some reports even have Müller removed from his post already.
After an extended battle with his family, Ferdinand Piëch has finally acquiesced to resign from the board of Porsche Automobil Holding SE and sell off his remaining shares. At 80 years of age, leaving VW Group’s parent company was probably long overdue for Piëch, but you can’t help but wonder if the manner in which his retirement unfolded hasn’t left him bitter.
Still, with his 14.7 percent stake rumored to be worth over a billion euros, he’ll have the means to stage the most elaborate revenge any of us could possibly imagine — assuming that’s what he intends. One certainly could make the case that he’d have valid reasons for doing it.
German media is reporting that former Volkswagen CEO Martin Winterkorn, who resigned shortly after the diesel emissions scandal erupted in September 2015, was informed about the company’s emissions cheating in late July of that year — a month before the automaker claims its executive board learned of the issue.
Several media outlets are reporting that a former senior VW quality officer told Winterkorn on July 27, 2015 that the company “cheated,” Reuters reports.
Throughout the entirety of Volkswagen’s diesel emission scandal, the automaker has changed its tune on several occasions. After evading scrutiny from regulators for years, it finally admitted to installing illegal defeat devices designed to fool U.S. emission testing in late 2015. However, it assured the public that no high-ranking executive had complete knowledge of the misdeed until news of the scandal broke to outraged consumers.
Obviously, that was a lie. But no damning evidence came out indicating anyone above mid-level management had prior knowledge of the devices or any idea they would be so harmful to the company. But now a Volkswagen manager arrested earlier this year claims the automaker’s former chief executive and other top managers had been told the carmaker’s diesel emissions violations could cost up to $18.5 billion, well before the September 2015 announcement.
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