Germany puts first auto boss on trial over ‘dieselgate’

MUNICH (GERMANY) – Five years after “dieselgate” emissions cheating revelations rocked the car industry, ex-Audi CEO Rupert Stadler on Wednesday becomes the first top executive to stand trial in Germany.

Stadler, 57, faces charges of “fraud, falsifying certifications and false advertising”, according to the indictment that will be read out before the Munich district court.

He will be in the dock alongside former Audi and Porsche manager Wolfgang Hatz and two Audi engineers, all facing the same charges.

German car giant Volkswagen — whose subsidiaries include Porsche, Audi, Skoda and Seat — admitted in September 2015 that it had installed manipulating software in 11 million diesels worldwide.

The so-called defeat devices made the vehicles appear less polluting in lab tests than they were in real driving conditions, allowing the vehicles to emit toxic gases far beyond the legal limit.

Not a single senior executive has been convicted over the scam in Germany, although two VW employees have received jail terms in the United States.

Intense media interest in the Stadler case coupled with coronavirus precautions have led court officials to move proceedings to a larger room in a justice building outside the city centre.

The complex trial is expected to last until December 2022.

If found guilty, the accused face up to 10 years in jail.

– ‘No knowledge’ –

Volkswagen has always insisted that the diesel trickery was the work of a handful of lower-level employees acting without the knowledge of superiors, although prosecutors dispute this.

Stadler had been Audi’s chief executive for 11 years when he was arrested in June 2018.

He spent four months in pretrial detention owing to concerns he could try to influence witnesses.

A career Audi man, he joined the luxury car maker in 1990 and was named CEO in 2007.

Prosecutors say Stadler knew about the scam by the end of September 2015 “at the latest” but nevertheless allowed thousands more vehicles fitted with illegal defeat devices to be sold.

His three fellow defendants are accused of having developed diesel engines equipped with the manipulating software, and allegedly installed in cars sold by the VW group as far back as 2009.

The charges cover a total of 434,420 Volkswagen, Audi and Porsche vehicles sold in Europe and the United States.

Stadler has consistently denied the accusations.

Co-accused Hatz, whose past roles at the VW group include research and development chief at its Porsche unit, also rejects any wrongdoing.

His lawyer said Hatz would respond to the charges “in detail”.

– Electric pivot –

Stadler is not the only high-profile executive bracing for his day in court.

A regional tribunal in Brunswick, near VW’s Wolfsburg headquarters, ruled earlier this month that Martin Winterkorn, former CEO of the VW group, must stand trial on charges of fraud and stock market manipulation.

The group’s current CEO Herbert Diess and supervisory board chair Hans Dieter Poetsch faced similar accusations of failing to inform shareholders in a timely manner of the pollution scam.

But those proceedings were dropped after VW agreed to a settlement that cost it nine million euros ($10.5 million).

The “dieselgate” saga has already cost VW more than 30 billion euros in fines, legal costs and compensation to car owners — mainly in the United States.

Claims of emissions rigging have also ensnared rival carmakers such as Daimler and Fiat Chrysler.

The fallout has prompted the industry to accelerate a shift towards environmentally-friendly electric vehicles, requiring huge investments at a time when carmakers are already confronting a tough economic climate.

And Volkswagen’s “dieselgate” bill is not quite settled yet.

In April, VW settled Germany’s biggest lawsuit in an out-of-court settlement in which it agreed to pay around 750 million euros to 235,000 customers, or between 1,350 and 6,250 euros per car.

It is now trying to reach settlements with up to 60,000 individual claimants after a German court issued a landmark ruling in May ordering VW to buy back a manipulated diesel from its owner.

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