Ex-Audi top man puts a definitive end to Volkswagen spin with meager confession

The biggest fish so far in the German emissions fraud trials confessed on Tuesday morning to having known about the ‘cheating software’ in hundreds of thousands of cars – and to have done nothing about it. Rupert Stadler, former CEO of Audi, part of Volkswagen, is the first former driver to admit in court that he had suspicions about the global scam. But Stadler’s confession in court in Munich was not a cathartic mea culpa. It provided no insight into the set-up of the fraud and was a purely strategic move after an offer from the judiciary for a reduced sentence.

That the cars had been manipulated, said the lawyer who spoke on behalf of Stadler, “I did not know, but I considered it possible and accepted it.” With that formulation, Stadler acknowledged that he was guilty of fraud by negligence, which is also the charge of the judiciary. He took no responsibility. Stadler, in pinstripe and with a smile on Tuesday in Munich, was Audi’s CEO from 2007 to 2018 and also sat on the Board of Directors of the Volkswagen Group from 2010. In 2015, thanks to American scientists, it became clear that diesel engines of Volkswagen passenger cars emitted much more nitrogen oxides than permitted. This later turned out to also apply to cars from the Audi subsidiary.

Cancer and cardiovascular disease

Nitrogen oxides can cause chronic bronchitis, cancer and cardiovascular disease. They can also lead to asthma in children. In addition, nitrogen oxides contribute hundreds of times more to the greenhouse effect than equal amounts of CO₂ – and cause acid rain and smog. Volkswagen took all of that, in Stadler’s words, “into the bargain”. Volkswagen wanted to sell its diesel engines.

For years, Volkswagen advertised with supposedly clean and economical diesels. Diesel engines are more economical than petrol engines, but emit more nitrogen oxides due to a higher combustion temperature. Emission standards are particularly strict in the US. And it was precisely the American market that Volkskwagen wanted to conquer, engaged in a competition with Toyota and General Motors. A system that would reduce the amount of harmful gases was technically possible, but the car manufacturer rejected it. Such a filter system would be at the expense of space in the trunk. That was undesirable, because every cubic centimeter of luggage space counts for a good rating on car blogs.

The idea for the cheating software came from Audi. The manufacturer, based in Ingolstadt, Bavaria, came up with something in 1999 to make the shrill sound of a starting diesel engine more pleasant. But that function caused illegally high emissions for a few seconds, so Audi developed software that turned off that sound function in a test situation, so that the increased emissions would not be noticed. From 2008, the Volkswagen group installed such software in eleven million cars to pass the emissions tests.

Fifteen years later, the first top executive in Germany is now being held accountable for this. Shortly after the fraud became known in 2015, then-Volkswagen CEO Martin Winterkorn called the fraud a “serious mistake” caused by “a few”. Volkswagen spread the narrative that the software was the idea of ​​a few managers and engineers, with whom the company top had nothing to do and knew nothing about. Stadler’s confession, no matter how frugal it may be, definitively puts an end to that Volkswagen spin. It is also the first meager success in a series of protracted cases against other chiefs and managers in the so-called diesel gate.

The trial against Stadler, two engineers and Audi’s head of engine development has been going on for two and a half years. After the confession of the three co-defendants, Stadler also had little choice. In exchange for his confession, according to the agreement between Stadler’s defense and the Public Prosecution Service, Stadler does not have to go to jail. He can get up to two years probation and must pay 1.1 million euros to charity. At Audi, Stadler earned 7.7 million a year.

In the five-minute statement, Stadler admitted in dry legal terms that he defrauded Audi customers and trading partners. They should have had “the objective and complete information” about the car at their disposal. The Public Prosecution Service also briefly accuses Stadler of having sold tubers for lemons: even after 2015, when the fraud at Volkswagen in Wolfsburg became public, Audi continued to sell its diesel engines as ‘clean’ until early 2018. It is estimated that there were still 430,000 in that period.

Serious damage

The fact that Volkswagen caused serious damage to the living environment in addition to the buyers is not a subject of the criminal case in Munich. Volkswagen pretended to have green ambitions. At the presentation of the new diesel engine in 2008, CEO Winterkorn raved that Volkswagen reconciles “sustainability and mobility”. “Increasing mobility creates enormous environmental challenges,” said Winterkorn at the time. “The Volkswagen Group does not shy away from its responsibilities in this area.”

There are still millions of cars from the Volkswagen group driving around with far too high nitrogen oxide emissions. The American justice system acted quickly and hard against Volkswagen. The company paid more than $20 billion in claims. Manager Oliver Schmidt was arrested when he wanted to celebrate Christmas in Florida and spent four years in an American prison.

In Germany, the legal process is more difficult. Litigation is being conducted against the various parts of Volkswagen in individual federal states. The managers of the Bavarian Audi must account for themselves in Munich. In Stuttgart, the judiciary dropped charges against employees of Volkswagen subsidiary Porsche, but also those of Bosch (responsible for the computers in the cars) and Mercedes. In Braunschweig, near the Volkswagen capital Wolfsburg, a trial is underway against Volkswagen employees. Everywhere, prosecutors and judges have to delve into technical files separately.

The start of the trial against Martin Winterkorn (75) in Braunschweig has been suspended due to his health. Winterkorn claims to have known nothing.