German authorities arrest Audi CEO over diesel cheating scandal
By any standard, Rupert Stadler, the chief executive of Volkswagen’s Audi luxury car division, is a survivor.
When evidence emerged that Audi had played a major role in developing illegal emissions software on Stadler’s watch, he and most other top executives kept their jobs. When an outside monitor faulted Volkswagen for failing to hold executives accountable, Stadler stayed in place. And when Munich prosecutors identified him last week as a suspect in their investigation and searched his home for evidence, Volkswagen said its management board had not even discussed his dismissal.
That run may well be ending, however. On Monday, German authorities arrested Stadler, 55, holding him indefinitely pending trial, an acute embarrassment for Volkswagen — and one that could finally prod the company to action.
Stadler’s arrest is the latest example of German officials widening their investigation into diesel cheating at Volkswagen. The company was found in 2015 to be using software to artificially lower a vehicle’s emissions levels when it was undergoing tests. Thus far, the inquiry into the scandal has largely been led by authorities in the United States, where the carmaker has had to pay tens of billions of dollars in fines and settlements, and where several executives have been arrested or sentenced to jail.
In Germany, the investigation had been slower in ramping up, until recently. Last week, Volkswagen agreed to pay a fine of 1 billion euros, or about $1.16 billion, for failing to properly supervise the staff members who came up with the illegal software. Then on Monday, Stadler was detained.
The decision indicates the judge was convinced there was a risk that Stadler would flee or obstruct the investigation, which prosecutors have said involves about 70 suspects.
The company’s supervisory board, which oversees top management, met Monday and was expected to appoint an interim replacement for Stadler, leaving open the possibility that he would return at some point. However, the board did not make a decision.
In the case of Stadler, himself a member of Volkswagen’s management board, the carmaker said he was innocent until proven guilty, granting a top executive much more benefit of the doubt than ordinary employees would typically receive.