Dieselgate: former Audi CEO Rupert Stadler also pleads guilty (Update)

After Wolfgang Hatz, a former top manager at VW Group car manufacturing daughters Audi and Porsche, changed his attitude in Court, former Audi CEO Rupert Stadler has finally given in, and now follows the same strategy, both pleading guilty to installing emissions-cheating software in cars to mislead official emission measurements (commonly known as ‘dieselgate‘).

Until now, both managers had objected to the allegations, but now they have changed policy and pleaded guilty to obtaining a lighter sentence from the Court.

Turning point

The confessions of Mr. Hatz were already considered a turning point in the whole process, declared the court president Stefan Weickert. Therefore, the Munich Court proposed a lighter sentence (with delay) in exchange for asserting the facts. The maximum sentence was ten years imprisonment.

“My client, Mr. Hatz, was aware of the unlawfulness in Germany of the fraud software he helped to install on the VW Group engines,” said his lawyer on Thursday, the 25th of April. “The illegal character of the facts is admitted and accepted by my client,” he added.

In Mr. Hatz’s case, the Court and the defense are thinking of an 18 to 24 months suspended prison sentence, and a €400 000 fine, to be decided soon. However, the prosecutor opposes the deal, claiming that the confessions came too late.

Now that former Audi CEO Rupert Stalder will finally confess in the case, his sentence could be in the same league as that of Mr. Hatz. The allegations against him are “fraud, emission of false certificates, and misleading advertising”.

When he pleads guilty, the sentence of Stadler could be a maximum of two years of suspended prison and a fine of € 1,1 million. Stadler will be doing this in a few weeks.

The Court’s final judgment should then follow in June. Here also, the prosecutor can oppose the deal, claiming that the confessions are too little too late.

Mr. Stadler’s defense contested the fine, initially set at €2 million, arguing that the client’s income “has dropped from 100 to 0” since he left Audi by the back door. The jurisdictional process started (by the end of 2020). He had already reached a civil settlement with his former employer and paid €4,1 million for breach of duty.

Not over yet

Another Audi engineer, Giovanni Pamio, has also pleaded guilty recently and got a suspended prison sentence of 18 to 24 months and a €50 000 fine. Meanwhile, many trials are ongoing, and in many countries, consumer organizations are still running class actions against the Volkswagen Group.

The latter admitted in September 2015 that it installed fraud software in some 11 million vehicles of the group’s brands. It was a worldwide scandal, starting in the US but later spreading to Europe. It has already cost the group more than €33 billion in fines and compensation.

Another trial was opened in September 2021 against four former VW managers and is still running before the Court in Brunswick, not far from VW’s headquarters in Wolfsburg.

The most important defendant, former VW Group CEO Martin Winterkorn, hasn’t attended “for medical reasons”. So nobody knows when there will be a final verdict.

VW shareholders have started another (civil) trial in Brunswick against the company because it lost more than 40% of its worth in the days after dieselgate became public (September 2015). Here, the hearings will restart on the 23rd of May, calling in 76 witnesses.

In France, the Paris Court is investigating allegations of aggravated deception by Volkswagen. The latter had pleaded against the investigation, saying that it couldn’t be judged twice for the same facts – for which it was already condemned in Germany in 2018 and paid a fine of €1 billion – but the appeal court has rejected the plead.

Dieselgate was a major scandal worldwide and severely damaged the reputation of the car industry in general and the German car manufacturers. As a result, the trustful relationship between the car industry and authorities will perhaps never be the same again.

Recently, the European Court of Justice condemned Mercedes-Benz. The company has to compensate a Mercedes client who saw the value of his car decline after Mercedes was also involved in dieselgate. A German court has to decide the amount of the fine. Mercedes-Benz has not been condemned for intended manipulation but for negligence in the case.