It's all connected.
Photographed by Getty Images
By Geoffrey Smith
March 15, 2017

German prosecutors raided the offices of Volkswagen’s Audi subsidiary Wednesday, further increasing the pressure on its embattled chief executive Rupert Stadler.

The raids on Audi’s biggest production sites in Ingolstadt and Neckarsulm in southern Germany (and seven other locations) were the first targeting the unit since VW’s diesel emissions scandal broke a year and a half ago. To the company’s acute embarrassment, they coincided with a press conference where Stadler was producing the upmarket brand’s annual results.

Things are already bad enough for Stadler. Not only is the company in a dispute with distributors in China, hitting sales in the brand’s most important market outside Europe. But Stadler is also personally involved in a civil case in a regional labor court that accuses him of having had direct knowledge of the use of illegal software to hide excess emissions back in 2012.

The DoJ had initially only accused VW of developing and installing defeat devices on its 1.6 and 2.0-liter cars, but earlier this year accused Audi of having separately done likewise for around 80,000 Audi and Porsche vehicles with 3-liter engines sold in the U.S. between 2009 and 2015. Those accusations, which accounted for some $1.7 billion of VW’s total settlement with the U.S., effectively form the basis for Wednesday’s raids.

To read more about Volkswagen’s diesel crisis, click here.

“With these search orders, we aim to clarify in particular who was involved in using the technology concerned and in passing false information to third parties,” the prosecutors said “I have all along supported efforts to clear up the diesel issue at Audi.” Stadler’s home was not among those searched Wednesday, according to Bloomberg.

Audi last month fired four engineers including Ulrich Weiss, its former head of engine development, for a “gross breach of duty.” Only days earlier, Weiss had accused Stadler of having direct knowledge of the use of illegal software as early as 2012. Weiss’s suit, filed in a district labor court in Heilbronn in the south-western state of Baden-Württemberg, is aimed at forcing Audi to give him his job back. If the court upholds those complaints, it could badly dent the credibility of VW’s claims that the conspiracy was limited to a small circle of engineers, and that the group’s top management only became aware of it weeks before the scandal broke.

VW’s group management stood by Stadler at its own annual press conference in Wolfsburg, but German reports have suggested that the solidarity among the company’s top brass is fraying.

Stadler is considered a protégé of VW group patriarch Ferdinand Piëch, who was supervisory board chairman from 2002 to April 2015. Stadler ran Piëch’s private office for five years and also sat on the board of two trusts managing Piëch’s 15% stake in Porsche Automobil Holding SE, the holding company that controls a 52% stake in VW. According to filings released earlier this month, Stadler has now stepped down from those trusts. At the same time, the other shareholders in Porsche Automobil Holding – who are mostly members of the same extended family – are now trying to lever the 78 year-old Piëch out of his last remaining position of influence. Porsche has announced plans to dissolve its board and re-elect a new one, and Piëch’s name is not on the list of candidates.

SPONSORED FINANCIAL CONTENT

You May Like

EDIT POST