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VW manager pleads guilty in US ‘dieselgate’ case

A Volkswagen (VW) manager, currently jailed in connection with the German automaker's emissions scandal in the United States, has pleaded guilty in a Detroit courtroom, hoping for lesser punishment. US prosecutors confirmed Friday that charges against Volkswagen executive Oliver Schmidt would be reduced after he pleaded guilty to his part in covering up the German carmaker's "dieselgate" emissions-cheating scandal in the US. Schmidt, who led the German automaker's US regulatory compliance office until 2015, appeared in a Detroit court to enter his plea. He had pleaded not guilty before his change of mind. US prosecutors said they would drop a wire fraud charge, which carried a maximum penalty of 20 years in prison. But they retained a fraud conspiracy charge and a charge of violating the US Clean Air Act, which together carry a maximum sentence of seven years. Also under the plea agreement, Schmidt may have to pay a fine of between $40,000 (34,000 euros) and $500,000. The final verdict is due December 6, 2017. In 2015, VW admitted it had equipped about 11 million cars worldwide with defeat devices to evade emissions tests, including about 600,000 vehicles in the United States. Diesel cars marketed as clean were in fact emitting 40 times the permissible limits of nitrogen oxide during normal driving. Altogether eight managers from the German car group are facing charges by US authorities for the company's breach of emissions regulations. Many of the other managers charged are believed to be in Germany, making extradition to the US unlikely. Schmidt was the second VW employee to plead guilty, after former company engineer James Liang admitted last year to helping devise the defeat devices. An FBI affidavit cited him as a cooperating witness. In March, VW agreed to pay $4.3 billion in penalties after pleading guilty to conspiring to violate the US Clean Air Act. That was on top of $17.5 billion in civil settlements. The carmaker still faces an array of legal challenges in Germany and worldwide, and has so far set aside more than 22 billion euros to cover dieselgate costs.

A Volkswagen (VW) manager, currently jailed in connection with the German automaker’s emissions scandal in the United States, has pleaded guilty in a Detroit courtroom, hoping for lesser punishment. US prosecutors confirmed Friday that charges against Volkswagen executive Oliver Schmidt would be reduced after he pleaded guilty to his part in covering up the German carmaker’s “dieselgate” emissions-cheating scandal in ... Read More »

US regulator finds another cheat device in Audi car

A year on since the parent party Volkswagen was hit with near bankruptsy, German media has reported the discovery of a second illegal software function in automatic transmission Audis. German newspaper "Bild am Sonntag" reported on Sunday that the Californian Air Resources Board (CARB) had discovered another illegal software function in an automatc transmission in Audi last summer. The paper said the device, which was not the same as the one which triggered last year's diesel emissions scandal at Audi's parent company, Volkswagen, was also used in gasoline and diesel-powered cars in Europe. The illegal software deactivated pollution controls on more than 11 million diesel vehicles sold worldwide, triggering the deepest business crisis in the German carmaker's history. Investigators found that the cars emitted more than 40 times the legal limit of nitrogen oxide, which can cause respiratory problems. Unorthorized VW said earlier this week, however, that the use of the software “did not constitute an unauthorized shutdown device under European law.” According to "Bild am Sonntag" the most recently discovered software was installed on many Audi models with a certain automatic transmission. If the steering wheel does not turn, this indicates laboratory testing conditions, and a gear shifting program which produces less carbon dioxide is activated. If the driver turns the steering wheel by more than 15 degrees, however, the "warm-up strategy" deactivates, "Bild am Sonntag"said. Audi reportedly stopped using the software in May 2016, just before CARB discovered the manipulation in an older model, the paper said, adding that the carmaker had suspended several engineers in connection with the matter.

A year on since the parent party Volkswagen was hit with near bankruptsy, German media has reported the discovery of a second illegal software function in automatic transmission Audis. German newspaper “Bild am Sonntag” reported on Sunday that the Californian Air Resources Board (CARB) had discovered another illegal software function in an automatc transmission in Audi last summer. The paper ... Read More »

Volkswagen’s US boss Michael Horn resigns

The German carmaker's top boss in the US has stepped down almost six months after the firm became embroiled in an emissions cheating scandal. Michael Horn said he was leaving Volkswagen to "pursue other opportunities." Volkswagen announced on Wednesday that Horn would leave "effective immediately" by mutual agreement with the company. "I want personally to say 'thank you' to Michael Horn for the great work he has done for the brand and with the dealers in the United States," said Herbert Diess, chief executive of the Volkswagen Passenger Cars brand, in a company statement. Horn became CEO of the Volkswagen Group of America in January 2014. He was in charge last September when the US Environmental Protection Agency issued a public notice of violation of the Clean Air Act to VW. The firm was accused of installing defeat devices and software in at least 11 million vehicles worldwide, many in the United States. Horn himself made the headlines, saying - while at a car launch event - that the company had "totally screwed up." The company's statement announcing Horn's resignation said merely that the 54-year-old was leaving "to pursue other opportunities." The firm faces major litigation in the United States, with the strong possibility that it will have to pay billions of dollars in penalties. Horn was sent to apologize to consumers at a congressional hearing in October, when he told lawmakers that top executives had no knowledge of the cheating software. "To my understanding this was not a corporate decision, this was something individuals did," Horn said, adding that he felt personally deceived. In its statement, VW said the group's North American regional head, Hinrich J. Woebcken, would be taking over at the helm on an interim basis.

The German carmaker’s top boss in the US has stepped down almost six months after the firm became embroiled in an emissions cheating scandal. Michael Horn said he was leaving Volkswagen to “pursue other opportunities.” Volkswagen announced on Wednesday that Horn would leave “effective immediately” by mutual agreement with the company. “I want personally to say ‘thank you’ to Michael ... Read More »

German emissions scandal threatens to engulf Mercedes, BMW

German auto giant Daimler has made legal threats against an environmental group after it tested diesel cars. The results appeared to show that Mercedes and BMW models are also cheating on emissions tests. The environmental group Deutsche Umwelthilfe (DUH) and German state broadcaster ZDF presented the results of nitric oxide tests they had conducted on two Mercedes and BMW diesel models. They appeared to show similar discrepancies between "test mode" and road conditions that hit Volkswagen earlier this year, triggering one of the biggest scandals in German automobile history. In response to the report released on December 15, a law firm representing Daimler, which owns Mercedes, sent a letter to the DUH that read, "Should you in any way present the accusation that my client manipulated its emissions data, we will act against you with all necessary sustainability and hold you responsible for any economic damage that my client suffers as a result." In defiance of another threat by the Schertz law firm, the DUH published the threatening letter in full on its website. "We have been massively threatened two more times, demanding that we take down the letter - we have told them we won't," DUH chairman Jürgen Resch told DW on Wednesday. "For me it's a very serious issue, because in 34 years of full-time work in environmental protection, and dealing with businesses, I have never experienced a business using media law to try and keep a communication - and a threatening letter at that - secret. "How are we supposed to do our work as a consumer and environmental protection organization when industry forbids us from making public certain threats it makes?" an outraged Resch added. "I think the threat itself is borderline legal coercion." Dirty diesel - on the road In a short documentary broadcast on December 15, ZDF tested three diesel cars - a Mercedes C200 CDI from 2011, a BMW 320d from 2009, and a VW Passat 2.0 Blue Motion from 2011 - and showed that all three produced more nitric oxide on the road than they did in an official laboratory test. "The measurement results show that the cars behave differently on the test dynamometer than when they are driven on the road," said the laboratory at the University of Applied Sciences in Bern, Switzerland, which carried out the tests. The discrepancies researchers found were not small - while all three cars kept comfortably below the European Union's legal nitric oxide limit (180 milligrams per kilometer) in the lab, they all went well over the standard on the road, where the BMW recorded 428 mg/km (2.8 times its lab result), the Mercedes hit 420 mg/km (2.7 times its lab result), and the VW Passat reached 471 mg/km (3.7 times its lab result). No technical explanation Daimler did not respond to a request for comment from DW, but company spokesman Jörg Howe told the "taz" newspaper that the company could not verify the test result and pointed out that the cars had already been used. "No one can rule out that they weren't damaged or manipulated by a third party," he said. He also said outside temperatures, road surfaces, and wind could all have played a part in the discrepancy. A spokesman for BMW denied to ZDF that it used any kind of manipulative device. These answers did not wash with the DUH or with other experts. "I would expect discrepancies in the nitric oxide measurements, but not on this scale," Kai Borgeest of the Center for Automobile Electronics and Combustion Engines at Aschaffenburg University told ZDF. "Technically it is conceivable that the other manufacturers tested used 'power down' installations in different ways - in other words software functions that recognize the test cycle. That would be illegal." Resch of the DUH went even further. "Neither BMW nor Mercedes can explain to us how these massive discrepancies came about," he told DW. "Talking about the wind or that there were more people in the car could maybe explain a 3 percent difference - we've got 300 percent. These discrepancies can't be technically justified." Government silence Amidst all this new scrutiny, the German government is maintaining a stony silence. In response to a DW request, the Transport Ministry did not offer any other explanation for the test discrepancies. "The federal automobile authority [KBA] is currently carrying out tests on the affected Volkswagen diesel models as well as other major manufacturers of diesel cars ... the tests are taking place both on the 'roller' and on the street," the ministry said in a brief statement. The KBA said it could not comment as its press spokesman was not in the office. The lack of explanations is beginning to irk the environmental groups. "We haven't heard anything from the KBA about Mercedes. We haven't even got a confirmation from the German authorities that they have received our report," said Resch. "Interestingly enough - the EU Commission, the European Parliament, some foreign governments are all highly interested in our tests. "And we haven't had to take anything back, content-wise," he added. "In all the years, every single line of our statements are all still there unchanged - and you can bet that Renault, BMW, VW, Mercedes did everything they could to find a false statement or to claim that our measurements were wrong. They haven't done that." The new battle with Daimler is just the latest in the DUH's long campaign to try and get the German government to control emissions on German carmakers. "In February 2011, we named the VW Passat with extremely high nitric oxide emissions - that was whistleblower information that, of course, we could only show to the authorities," he said. "For over eight years, every year we've made a scandal of it. That's why we desperately need federal agencies that have the courage to investigate these things. "Now we're handicapped by this existence-threatening pressure - because a lawsuit would mean our insolvency," Resch said. "That does make me pretty angry, to be obstructed like this."

German auto giant Daimler has made legal threats against an environmental group after it tested diesel cars. The results appeared to show that Mercedes and BMW models are also cheating on emissions tests. The environmental group Deutsche Umwelthilfe (DUH) and German state broadcaster ZDF presented the results of nitric oxide tests they had conducted on two Mercedes and BMW diesel ... Read More »

Sedran appointed new VW chief strategist

Crisis-hit Volkswagen has hired top strategy executive Thomas Sedran from its competitor Opel. It is the latest major personnel change in the wake of a scandal over the company's cheating on diesel emissions tests. Volkswagen announced Monday that 51-year-old Sedran would take over responsibility for the company's corporate strategy from November. He "will report directly to the CEO Matthias Müller," the Wolfsburg-based car manufacturer said in a statement. Sedran is a former managing director for turnaround firm Alix Partners. In 2012, he joined General Motors' European offshoot Opel as head of strategy and operations. He left GM in the summer of 2015. His appointment at VW follows the company's decision to hire Christine Hohmann-Dennhardt earlier this month. Hohmann-Dennhardt oversaw legal compliance at competitor Daimler AG in the wake of a bribery scandal there and is expected to take on the same role at VW. The automaker is reeling from a massive pollution scandal that erupted last month after it was revealed the company had installed cheating software in around 11 million of its diesel-engine cars to thwart emission tests in many parts of the world. VW has set aside 6.5 billion euros ($7.3 billion) to cover fines and recalls, although it's likely the eventual cost will be much larger. The company has already gone through a management shakeup, with chief financial officer Hans Dieter Poetsch appointed board chairman and Matthias Müller taking over from CEO Martin Winterkorn.

Crisis-hit Volkswagen has hired top strategy executive Thomas Sedran from its competitor Opel. It is the latest major personnel change in the wake of a scandal over the company’s cheating on diesel emissions tests. Volkswagen announced Monday that 51-year-old Sedran would take over responsibility for the company’s corporate strategy from November. He “will report directly to the CEO Matthias Müller,” ... Read More »

Scandal to screen: DiCaprio linked to possible Volkswagen film

The ongoing Volkswagen scandal may make it to the big screen. A US movie studio and actor Leonardo DiCaprio's production company have acquired movie rights to a book proposal on the German carmaker's emissions cheating. It hasn't even been a month - but in Hollywood, time is money. On September 18, environmental regulators in the United States accused German auto industry giant Volkswagen of intentionally cheating on vehicle emissions tests. What followed was a scandal of epic proportions which led to the resignation of VW chief Martin Winterkorn, tumbling stock prices and a potential legal minefield. But could it be a blockbuster? Movie studio Paramount Pictures and Appian Way - the production company belonging to American actor Leonardo DiCaprio - have bought the film rights to a book proposal from "New York Times" journalist Jack Ewing about the ongoing debacle. Ewing's as-yet untitled book was expected to explore how Volkswagen's internal ethos fueled the massive fraud which has affected some 11 million vehicles worldwide. DiCaprio is no stranger to tackling such based-on-a-true-story issues. He was the producer and star of "The Wolf of Wall Street" which focused on investor fraud, and is one of Hollywood's most outspoken advocates on environmental issues . The repercussions from the cheating revelations continued on Monday. International credit rating agency Standard & Poor's cut the automaker's long-term debt rating and the European Investment Bank announced it could potentially demand billions in loans back from Volkswagen.

The ongoing Volkswagen scandal may make it to the big screen. A US movie studio and actor Leonardo DiCaprio’s production company have acquired movie rights to a book proposal on the German carmaker’s emissions cheating. It hasn’t even been a month – but in Hollywood, time is money. On September 18, environmental regulators in the United States accused German auto ... Read More »

Majority of VW’s rigged cars in Europe

German carmaker Volkswagen has said the overwhelming majority of its roughly 11 million cars with built-in defeat devices were sold across Europe. The company again apologized for the "wrongdoing of individuals." A Volkswagen spokesman on Monday reported that 8 million of the company's vehicles running in the EU were fitted with software capable of thwarting diesel-engine emission tests. In a letter co-signed by the current VW chief lobbyist Thomas Steg and cited by the German business daily "Handelsblatt," the carmaker said 1.2, 1.6 and 2.0-liter engines were affected. The authors of the letter addressed to national parliamentarians once again apologized for the behavior of "some individuals" and promised to fully clear up the scandal. No time to waste VW has been under mounting pressure to get to grips with the biggest business crisis in its 78-year history as revelations about its large-scale emissions cheating scandal have wiped out a third of the firm's stock price and rocked the auto industry as a whole. Up until now, VW had said it would have to refit up to 11 million diesel cars globally, including 2.8 million in Germany . Newly appointed Chief Executive Matthias Müller is to address employees at a staff meeting in Wolfsburg Tuesday. One day later, he's scheduled to brief the supervisory board on what measures have been taken so far to find the culprits and win back the trust of customers.

German carmaker Volkswagen has said the overwhelming majority of its roughly 11 million cars with built-in defeat devices were sold across Europe. The company again apologized for the “wrongdoing of individuals.” A Volkswagen spokesman on Monday reported that 8 million of the company’s vehicles running in the EU were fitted with software capable of thwarting diesel-engine emission tests. In a ... Read More »

Will VW scandal end with prison sentences?

The auto industry is no stranger to legal trouble. Though companies normally reach financial settlements with US authorities, individuals at Volkswagen could face criminal charges. Spencer Kimball reports from Chicago. The timing couldn't be worse for Volkswagen. Before the VW emissions scandal broke, the US Justice Department vowed in a memo to redouble its efforts to prosecute individuals in white collar criminal cases - and a new CEO is unlikely to change that calculation. In the aftermath of the 2008 financial crisis, federal prosecutors extracted massive financial penalties from investment banks. But only one Wall Street executive, Kareem Serageldin at Credit Suisse, was prosecuted and sentenced to time in prison. "There's recently been criticism that the government has too often been using settlements with corporations as the end of the game and not following through as much on individual prosecutions," Samuel Buell, who prosecuted corporate crime at the Justice Department, told DW. Amid this controversy, the Justice Department's Resources and Environment Division has launched an investigation into Volkswagen cheating on diesel emissions tests, according to Bloomberg and "The Wall Street Journal." "This is their first opportunity really in a high-profile case to show that they mean business by going after individuals," Peter Henning, an expert on white collar crime at Wayne State University Law School, told DW. "So, unfortunately for Volkswagen, they're a year too late." Settlements the norm All three of the world's top automakers have now been subject to criminal investigations. GM was charged with concealing faulty ignition switches linked to 124 deaths. The world's third-largest automobile company settled with the Justice Department for $900 million. No individuals were charged with a crime. Toyota faced Justice Department scrutiny for withholding information about a sudden acceleration problem linked to fatalities. The world's second largest auto company settled with the government for $1.2 billion, but still faces some 400 wrongful death and injury lawsuits. Again, no individuals were charged. Now the world's top-selling car company, Volkswagen, potentially faces criminal charges for installing software to cheat diesel emissions tests . Though the emissions scandal has not been linked to any deaths, expert Peter Henning believes individuals at the company could very well face criminal charges. "This is intentional misconduct," Henning said. "This is so blatant. This has been going on for years. This was corporate a decision." "It's a perfect storm for Volkswagen," he continued. "The firm and the individuals don't have a lot of excuses, and you have a Department of Justice looking to go after individuals." Potential criminal penalties According to Samuel Buell, there's a range of charges individuals at Volkswagen could face depending on how the facts of the case pan out. Submitting false statements is a crime, and it's also illegal to defraud the United States government. There could also be charges for defrauding consumers who bought the diesel vehicles in question. Sentencing would likely be based on the damage done to consumers and the environment measured in monetary terms. According to Buell, if the damages reach tens of millions or even hundreds of millions of dollars, individuals could face stiff prison sentences. "You could be looking at five or 10 years," said Buell, a law professor at Duke University. "It's important to know that there's no parole in our federal prison system. The sentences are real. When a judge says five or 10 years, that's basically what you get." But holding individuals accountable in the corporate context is difficult, according to Brandon Garrett, author of "Too Big to Jail: How Prosecutors Compromise with Corporations." Prosecutors have described difficulty in determining responsibility amidst complex corporate structures. "The complexity of organizations where many people work together with many levels of supervisors and consulting lawyers and other specialists can all make assigning blame a challenge if there is no 'smoking gun' type evidence," he said.

The auto industry is no stranger to legal trouble. Though companies normally reach financial settlements with US authorities, individuals at Volkswagen could face criminal charges. Spencer Kimball reports from Chicago. The timing couldn’t be worse for Volkswagen. Before the VW emissions scandal broke, the US Justice Department vowed in a memo to redouble its efforts to prosecute individuals in white ... Read More »

Reports: Porsche CEO to become new VW chief

The supervisory board of German carmaker Volkswagen is to pick Porsche chief Matthias Müller as its next CEO, media reports say. He's to replace Martin Winterkorn, who resigned over a falsified emission tests scandal. The head of sports carmaker Porsche, Matthias Müller, would be appointed as Volkswagen's new chief executive on Friday, Reuters and the German business daily "Handelsblatt" reported, citing "sources familiar with the matter." "Bloomberg" also carried a similar report earlier on Thursday. Müller would replace Martin Winterkorn , who resigned on Wednesday in the wake of a huge scandal over manipulated emissions tests in the US and elsewhere, affecting some 11 million vehicles. Reuters reported VW's supervisory board would offcially present the new man at the helm after a meeting on Friday. Tall order Müller is the VW Group's former head product strategist and earned more laurels while being in charge of Porsche. The 62-year-old had been seen as the main favorite for replacing Winterkorn. Born in Chemnitz in East Germany, he originally trained as a tool maker and then graduated in information technology. He'll be facing the daunting task of fully clearing up the company's current scandal and regaining the trust of consumers worldwide.

The supervisory board of German carmaker Volkswagen is to pick Porsche chief Matthias Müller as its next CEO, media reports say. He’s to replace Martin Winterkorn, who resigned over a falsified emission tests scandal. The head of sports carmaker Porsche, Matthias Müller, would be appointed as Volkswagen’s new chief executive on Friday, Reuters and the German business daily “Handelsblatt” reported, ... Read More »

Volkswagen CEO Martin Winterkorn resigns

Volkswagen Chief Executive Martin Winterkorn has stepped down as a result of revelations last week that the German carmaker had manipulated diesel car emission tests in the US. No successor has yet been named. Martin Winterkorn's resignation came after a protracted meeting of VW's presidium of major shareholders ahead of a regular supervisory board meeting on Friday. The 68-year-old executive said he was stepping down "in the interests of the company" as it grappled with the aftermath of the falsified emissions tests scandal that had rocked the German carmaker. He said in a statement that "Volkswagen needs a fresh start, also in terms of personnel," adding that he would clear the way for this fresh start with his resignation. "I'm shocked by the events of the past few days, "Winterkorn said. "Above all, I'm stunned that misconduct on such a scale was possible in the Volkswagen Group." Successor to be named on Friday? Supervisory board chief Berthold Huber told reporters in Wolfsburg that no decision had yet been reached on Winterkorn's successor, adding that more details would be announced after the board's meeting on Friday. Huber emphasized that Winterkorn had had no knowledge personally of the emission test manipulations in the US, but said he respected his move to take responsibility for the scandal. Given Winterkorn's engineering background, observers had doubted that he could be unaware of the use of so-called "defeat devices." US authorities are planning criminal investigations after discovering that VW programmed computers in its cars to detect when they were being tested and alter the running of diesel engines to conceal the true level of emissions.

Volkswagen Chief Executive Martin Winterkorn has stepped down as a result of revelations last week that the German carmaker had manipulated diesel car emission tests in the US. No successor has yet been named. Martin Winterkorn’s resignation came after a protracted meeting of VW’s presidium of major shareholders ahead of a regular supervisory board meeting on Friday. The 68-year-old executive ... Read More »

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