German Prosecutors Investigating Winterkorn, Volkswagen’s Ex-Chief

28 Sep 2015 | Author: | No comments yet »

German Prosecutors Investigating Winterkorn, Volkswagen’s Ex-Chief.

FRANKFURT — German prosecutors said on Monday that they had begun an investigation of Martin Winterkorn, who until last week was the chief executive of Volkswagen, based on complaints from unidentified people that he should be held responsible for a widening scandal linked to diesel-emissions. BERLIN (Reuters) – German prosecutors launched an investigation on Monday into former Volkswagen boss Martin Winterkorn over the rigging of vehicle emissions tests, as the carmaker suspended three top engineers in an attempt to tackle the crisis.Winterkorn resigned last week following the eruption of a scandal involving the automaker’s use of deceptive software to fool regulators into believing diesel cars were compliant with emissions laws. The investigation into Winterkorn, who quit on Wednesday after almost nine years at the helm of Europe’s largest carmaker, is into “allegations of fraud in the sale of cars with manipulated emissions data,” the prosecutor’s office said. The company has admitted to rigging 11 million cars with the software, which hid the fact that the vehicles are emitting harmful pollutants at rates of up to 40 times U.S. standards.

The news came as VW subsidiary Audi admitted that 2.1m of its cars were fitted with the emissions-rigging software and a shareholder advisory group called for an overhaul of VW’s governance. Monday, Volkswagen AG’s upmarket Audi brand said 2.1 million of its vehicles are among those with the engines affected by the emissions-rigging scandal. An estimated 1.42m Audi vehicles with EU5 engines are affected in western Europe, with 577,000 in Germany and almost 13,000 in the US, a spokesman for the Ingolstadt-based company said.

Two German newspapers said on Sunday Volkswagen’s own staff and one of its suppliers had warned years ago about the illegal use of so-called “defeat devices” to detect when a car was being tested and alter the running of its diesel engine to conceal their emissions of toxic nitrogen oxides. Audi said that the engine in question was built into 1.6-liter and 2-liter turbo diesel models in the A1, A3, A4, A6, TT, Q3 and Q5 ranges, German news agency dpa reported.

Winterkorn, who resigned on Wednesday, has said several times that he had no knowledge of software, rigged to fool emissions tests, that was installed in 11 million Volkswagen vehicles. Environmental campaign group Transport & Environment (T&E) published new data on Monday showing that some new Mercedes, BMW and Peugeot cars use 50 percent more fuel than laboratory tests show, saying this was evidence of a wider industry problem. About 500,000 of those vehicles are in the United States, where the Department of Justice has opened a criminal investigation into the emissions deception, which was disclosed by the Environmental Protection Agency. But it said the gap between lab results and road performance had grown to such an extent for emissions of both carbon dioxide and nitrogen oxides that further investigation was needed to discover what carmakers were doing to mask emissions. “The Volkswagen scandal was just the tip of the iceberg,” said Greg Archer, clean vehicles manager at T&E, adding the gap between lab tests and real-world performance cost a typical driver 450 euros ($504) per year.

ACEA, the European Automobile Manufacturers’ Association, which represents top carmakers, has said there is no evidence the use of defeat devices is an industry-wide issue. The carmaker’s supervisory board agreed on Friday to put several employees on leave until the details of VW’s emissions scandal were cleared up, without providing names. Volkswagen shares have plunged about 35 percent since it admitted to cheating U.S. emissions tests, wiping more than 25 billion euros from its market value. The crisis is an embarrassment for Germany, which has for years held up Volkswagen as a model of the country’s engineering prowess and has lobbied against some attempts to tighten regulations on automakers.

The scandal has also rocked the wider car market, with manufacturers fearing a drop in diesel car sales and more costly regulations, and customers furious that Volkswagen has not given more details about what might happen to their cars. It will be far from easy to restore the reputation of the company and win back trust from customers,” new CEO Mueller, a former boss of Porsche sports-cars, said in a letter to the division’s staff seen by Reuters. “It seems that VW has known for years about these manipulations. It badly needs a new company culture but Mueller is anything but a perfect pick to drive change,” said Commerzbank’s Sascha Gommel. “He has made a career within the VW system, so how could he credibly argue that all will change to the better now? Those doubts are weighing on the stock.” Shareholder advisory firm Hermes EOS said it was also concerned about the appointment of “corporate insiders” to top jobs as Volkswagen reshuffles its management.

Sources close to the matter told Reuters on Monday the company had suspended VW brand development chief Heinz-Jakob Neusser; Audi’s R&D boss Ulrich Hackenberg, who also oversees technical development across the group; and Porsche’s Wolfgang Hatz, also head of group engine and transmissions development.

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