Four ex-Volkswagen Group managers stood trial in Germany accused of fraud for their part in the diesel-rigging scandal that cost the company billions and tarnished its reputation.
However, their former boss’ role in the scandal was highlighted even though his court proceedings are scheduled to take place later.
Prosecutors opened the criminal proceeding against the managers on Thursday in Brunswick (Braunschweig) court by saying ex-VW Group CEO Martin Winterkorn knew about the deception for some time before admitting to the emissions manipulation in September 2015.
Prosecutors said Winterkorn learned via a confidant's note in his weekend roundup of news stories that diesel cars in the U.S. exceeded the permissible limits for nitrogen oxides (NOx) by up to 15 to 35 times in tests conducted by scientists in 2014.
Winterkorn is said to have taken note of this, according to the investigation, but he did not order that the use of the cheating software be stopped.
"He decided against disclosure and hoped to be able to continue to conceal the legal violations," according to prosecutors.
The Frankfurter Allgemeine Zeitung reported Thursday that when the prosecution read out the summary of the indictment it said that the aim of the deceit had been to boost company profits "because their bonus payments also depended on it."
In this episode of the Ally All Ears podcast, host Emma Hancock interviews Kelly Olson, Senior Director of Operations for SmartAuction at Ally Financial, about the importance of quality control in online wholesale auctions. Olson discusses advancements in online auction platforms, highlighting the importance of detailed condition reports, AI technology for damage detection, and the evolving incorporation of electric vehicle information, all aimed at building trust and reliability for dealers purchasing pre-owned inventory.
The trial -- starting six years after the scandal broke -- is the first criminal case to target executives at VW's German headquarters who allegedly backed the idea of dodging emissions tests with a software trick.
The managers were charged in 2019 with having given authorization for vehicles to be equipped with a so-called "defeat device" that masked the actual emissions of the cars during testing. The case covers 9 million cars sold in Europe and the U.S.
"As executives, they were decisively responsible for the fact that emissions rules were transgressed in Europe and the U.S.," prosecutors said on Thursday. "The rules were in place to protect the environment and the health of people."
Volkswagen settled the criminal probe three years ago by paying 1 billion euros to German prosecutors.
The diesel-emissions scandal has so far cost the automaker more than 30 billion euros ($35.3 billion), including hefty sanctions that were part of a deal with U.S. authorities.
The company is still facing civil litigation in its home country, including a 9 billion-euro investor class action.
The long-awaited trial has been postponed twice because of the coronavirus pandemic and hearings are expected to stretch into 2023.
The four managers will comment on the allegations later in the trial.
Annette Voges, an attorney for Heinz-Jakob Neusser, VW's former engine development chief, asked for the case to be stayed as prosecutors have still not completed the probe and new evidence emerging continuously.
"Until this very day it's unclear who was allegedly deceived by whom over what in this case," she said.
Andreas Mross, a defense lawyer for Thorsten D., the lowest ranking of the accused, said his client repeatedly told his supervisors the device was illicit. But his efforts were rebuffed and he was called a "worrywart" by bosses.
In August 2015, a month before the scandal broke, Thorsten D. disclosed the software manipulation to U.S. authorities despite instructions from VW to conceal it, Mross said.
Thorsten D. then has cooperated with with both the U.S. authorities and German prosecutors, providing them with information which later became the basis for the charges in this trial, his lawyer said,
"My client is acknowledging his mistakes," Mross said "But he shouldn't be among the people to stand trial here today."
Lawyers for the two other defendants will comment on the case at the next hearing scheduled for Sept. 21.
Health issues
Winterkorn, 74, was originally charged alongside the four ex-managers but his trial was postponed due to health reasons.
"It remains unclear whether there will be a trial against Mr. Winterkorn at all," a defense attorney told the court Thursday, according to the German Press Agency (DPA).
Winterkorn was charged with giving false testimony to German parliament in June.
He has repeatedly denied all the allegations against him,.
It's in the interest of the staff, the shareholders and the company as a whole that the facts that lead to the diesel crisis will be brought to light completely, Volkswagen said in an emailed statement.
The court will determine what responsibility the individuals may have had, the automaker added.
Alongside the fraud charges, the accused will be tried on tax-evasion allegations. Since the cars received tax breaks for their seemingly reduced emissions, the government lost out on 820,000 euros, according to the charges.
Separately, a compensation deal has been negotiated with Winterkorn, other former top managers and liability insurers for a total amount of 280 million euros.
Nathan Eddy contributed
