“Dieselgate’ takes human toll

AUDI’S former boss Rupert Stadler has become the first ex-Volkswagen Group board member to be sentenced and fined because of his involvement in the 2015 dieselgate emissions scandal.

The legal system is now catching up with individuals at VW found by investigators to have knowledge of the so-called technical breakthrough that allowed VW Group’s diesel engineers to ostensibly meet US emissions tests when the engine did no such thing.  

The software, which detected a test was being made, produced false data to pass the test. This allowed more than 11 million diesel vehicles sold between 2009 to 2015, including 500,000 in North America, to emit 40 times the levels of NOx than that permitted.

When the first of the engines was released in the US, VW gave technical presentations to the motoring media telling them that the fact that it met US emission standards was an achievement of German engineering. This was simply not true. Advertising for the engine made similar claims.

The fraud generated probably the most expensive penalties in corporate history. The company has already admitted the scam has cost it more than $A50 billion; and there is more to come. In Australia VW Group was fined $125 million for making misleading representations about compliance with emissions standards. 

Meanwhile the former CEO of Audi, Mr Stadler, was sentenced by a Munich court to a suspended sentence of one year and nine months, as well as €1.1 million ($A1.8m) for fraud by negligence.

Prosecutors had originally wanted a 2-million-euro ($A3.28m) fine, citing Mr Stadler’s salaries at Audi and Volkswagen and his financial and real estate assets.

He has been on trial since 2020 and made a confession on his role in the diesel scandal last month, with his lawyer stating that while he did not know vehicles had been manipulated, he did recognise it was a possibility and accepted there was need for more care.

Mr Stadler had previously rejected any allegations of involvement or visibility of the dieselgate scandal.

The judge handed out a lesser sentence due to the confession.

Two further defendants accused of manipulating engines – former Audi executive Wolfgang Hatz and an engineer identified as Giovanni P – were sentenced on Tuesday. 

Mr Hatz was given a two-year suspended sentence with a 400,000 euro ($A656,000) fine and the engineer identified only as Giovanni P by the court for privacy reasons, a suspended one year and nine months and a 50,000 euro ($A82,000) fine.

The case is among the most prominent in the aftermath of the diesel scandal, when parent group Volkswagen and Audi admitted in 2015 to having used illegal software to cheat on emissions tests.

Mr Stadler was accused of failing to stop the sale of the manipulated cars in Germany after the scandal became known.

By March 2020, Volkswagen Group stated that its diesel cheating scandal has cost it 31.3 billion euros ($A51.4b) in fines and settlements.

The Volkswagen Group has been hit with multiple court cases across the globe in the past few years. In the US, it agreed in June 2016 to pay up to $US14.7 billion ($A22b) to settle civil charges.

In the UK, dieselgate litigation in May last year settled out of court to 70,000 claimants for £193 million ($A368m).

Further ongoing cases include a criminal case against other former managers of Volkswagen taking place in Braunschweig, and a case against former Volkswagen boss Martin Winterkorn is on hold due to problems with his health.

In August 2017 James Liang, a former VW engineer who lived in California, also received a 40-month sentence after admitting his involvement in the emissions fraud.

In December that same year Volkswagen compliance executive Oliver Schmidt was sentenced to seven years in jail after pleading guilty to his part in the emissions scandal.

Automotive News reported that Axel Eiser, the former head of engine development at VW’s Audi facility in Ingolstadt, Germany, was part of a team that realised that Audi diesel engines could not meet American emissions regulations back in 2006.

To solve the problem, engineers developed software – installed in Audis and other VW Group vehicles from 2009 to 2016 – that could recognize when a car was being tested and temporarily reduce emissions to legal levels.

By Neil Dowling and John Mellor