Former Audi Executive to Face Trial Over Emissions Fraud Scandal

By Elijah Labby Thursday, October 1, 2020

On Wednesday, Rupert Stadler, Audi’s former luxury car division chief, appeared in a Munich court over the illegal installation of software that allowed the Volkswagen subsidiary to skirt around emissions testing.

US regulators first discovered the incident, which has been dubbed “Dieselgate” in 2015. Shortly after, Volkswagen admitted wrongdoing but claimed that the software installation was the work of low-level employees and not senior-level managers. Now, they will have to defend that assertion in court.

Stadler, 75, allegedly knew about the software and sold the cars anyway. He denies any wrongdoing. Despite this, due to employee testimonies, he was held in custody for four months in 2018 — a measure commonly taken when it is feared that the suspect will flee or attempt to meddle with the trial.

"Defendant Stadler is accused of having been aware of the manipulations since the end of September 2015, at the latest, but he did not prevent the sale of affected Audi and VW vehicles thereafter," the prosecutor’s read in a statement.

Shortly after, Volkswagen fired Stadler. In a statement, the company said Stadler was “unable to fulfill his duties as a member of the board of management and [wished] to concentrate on his defense.”

Stadler is one of only four top-level executives to face trial in the case. No senior-level managers have been convicted thus far in Germany, although two have been jailed in the United States.

The software, commonly referred to as a “defeat device,” works by raising the levels of acceptable emissions during testing, then turning them off for consumer use.

The technology, Volkswagen said, was installed on over 11 million Volkswagen Group automobiles, including the VW Passat, Jetta, Beetle, and Golf, as well as the Audi A3. According to documents reported by the New York Times, it was Audi engineers that developed the technology and spread it to the Volkswagen company.

Additionally, the Times reported that internal emails show that the engineers knew that what they were doing was illegal. In regard to concerns that Audi’s diesel models would not be approved under the emissions standards, an employee warned his coworkers that “we won’t make it without a few dirty tricks.”

The incident led former Volkswagen CEO Martin Winterkorn to step down, although he, too, denied any part in the scandal.

“I am shocked by the events of the past few days,” he said at the time. “I am stunned that misconduct on such a scale was possible in the Volkswagen Group. As CEO I accept responsibility for the irregularities. I am doing this in the interests of the company even though I am not aware of any wrongdoing on my part.”

Mr. Winterkorn has also been charged in connection to the scandal in both Germany and the United States; however, he will likely not be convicted in the US due to German anti-extradition law.

The scandal dealt a major financial blow to Volkswagen, which is worth a reported $88 billion worldwide. As of June 2020, the company had paid upwards of $33 billion in fines and settlements worldwide, including car buybacks in the United States.

The company’s sales dipped substantially following the initial scandal, but have recovered. Likewise, the German perception of the company has remained mostly favorable in the years following the revelations. In a 2015 survey, pollsters found that 91% of Germans believe that other companies are engaged in the same activity, but have not yet been found out. 65% of respondents believed that the incident had been exaggerated.

Reuters reported that Volkswagen sold 10.66 million consumer-level vehicles in 2018, second only to the Renault-Nissan group, which sold 10.75 million.

In a statement, Audi said that they welcomed the results of an investigation into the activity and that a new era of leadership had changed the brand.

“Audi has become a different company since the diesel crisis became known,” the company stated.

If convicted, Mr. Stadler will face a minimum sentence of six months in prison and a maximum of ten years. It is doubtful that the companies will experience a significant drop in revenue as a result of the trial.

About the Author

Headshot of Elijah Labby

Elijah Labby is a graduate of the National Journalism Center. He has previously written for Broadband Breakfast, a technology and internet policy website.

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