Daily Times

The arrest and detention of Audi’s chief executive forces Volkswagen Group’s competing stakeholders to renegotiate the delicate balance of power that has helped keep Rupert Stadler in office.

Volkswagen’s (VW) directors are discussing how to run Audi, its most profitable division, following the arrest of the brand’s long-time boss on Monday as part of Germany’s investigations into the carmaker’s emissions cheating scandal.

The discussions risk reigniting tensions among VW’s controlling Piech and Porsche families, its powerful labour representatives and its home region of Lower Saxony.

VW has insisted the development of illegal software, also known as “defeat devices” was the work of low level employees, and that no management board members were involved.

US prosecutors have challenged this by indicting VW’s former chief executive Martin Winterkorn. Stadler’s arrest raises further questions.

Audi and VW said on Monday that Stadler was presumed innocent unless proved otherwise.

Munich prosecutors detained Stadler to prevent him from obstructing a probe into Audi’s emissions cheating, they said on Monday. Stadler is being investigated for suspected fraud and false advertising.

Here are the main players deciding the fate of Audi.

Audi’s Role In Dieselgate

Volkswagen Group was plunged into crisis in 2015 after US regulators found Europe’s biggest carmaker had equipped cars with software to cheat emissions tests on diesel engines.

The technique of using software to detect a pollution test procedure, and to increase the effectiveness of emissions filters to mask pollution levels during tests, was first developed at Audi.

“In designing the defeat device, VW engineers borrowed the original concept of the dual-mode, emissions cycle-beating software from Audi,” VW said in its plea agreement with US authorities in January 2017, in which the company agreed to pay a $4.3 billion fine to reach a settlement with US regulators.

Audi engineers developed a 3.0 liter diesel engine which was later also used in VW and Porsche models sold in the United States between 2009 and 2016.

Stadler has denied any involvement in cheating, and Audi even denied the existence of illegal engine management software after the US Environmental Protection Agency (EPA) issued a notice of violation against Audi on Nov. 2, 2015.

Published in Daily Times, June 20^th 2018.