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Winterkorn Behind Dieselgate Coverup, New Docs Suggest

Forbes Forbes 25/09/2016 Bertel Schmitt, Contributor

That hurts. Martin Winterkorn, Beijing 2014 (Picture: Bertel Schmitt) © Provided by Forbes Media LLC That hurts. Martin Winterkorn, Beijing 2014 (Picture: Bertel Schmitt) Former Volkswagen CEO Martin Winterkorn was well aware of the dieselgate scandal, long before it was made public, documents cited by Germany’s BILD Zeitung suggest. The material also appears to prove that Winterkorn initiated an attempted cover-up.

BILD has an internal Volkswagen memo with the date of July 30 2015. Titled “Approval diesel U.S.A.” the message announced that two Volkswagen staffers would meet “deputy executive officer Dr. Ayala for an unofficial information exchange.” At the meeting with CARB’s Alberto Ayala, the “issues” with Volkswagen’s diesel engines should only be “partially disclosed,” the memorandum says. This “approach has been confirmed by Prof. Winterkorn on July 28, 2015” the paper says.

A day before the memo was written, “the issue” was the topic at Volkswagen’s “Schadenstisch” (literally “damage table”) a regular crisis and damage control meeting by experts from various departments of Volkswagen. “Are we talking about CO2?” Winterkorn is quoted to have asked at the meeting. “No, it’s nitrous oxide,” he was told according to the report.

Says BILD: “Latest on that day, Winterkorn supposedly knew all. This was seven weeks before U.S. environmental agencies went public with dieselgate, which led to the unprecedented crash of Volkswagen shares.”

© Provided by Forbes Media LLC

The last sentence hints on the direction the leak might be taking. In recent days, German courts have been flooded with lawsuits by investors who claim they lost billions when the company’s shares crashed. To beat a one year statute of limitations, “fax machines overheated” at German courts a week ago, Bloomberg said. One German law firm delivered more than 5,000 complaints by truck.

The claimants allege that Volkswagen violated the “ad-hoc” rule requiring the speedy release of findings that might impact the value of a company’s shares. Lawsuits disclosed so far seek nearly $12 billion in damages.

For Volkswagen, these lawsuits carry a much higher threat potential than violations of Europe’s famously lax emission laws. According to BILD, public prosecutors in Germany offer Volkswagen engineers settlements in the range of 100,000 to 150,000 Euro ($112,000 to $168,000). Engineers are said to shun the deal, because it would mean that “they would lose coverage by Volkswagen’s legal protection insurance, and they would have to pay for their own lawyers.”

On July 8, 2015, CARB informed both the EPA and VW that it found glaring discrepancies between real world emissions and when Volkswagen diesel cars were on the “rolling road” in a testing lab. ”VW offered up excuses for the inconsistency in tailpipe NOx levels, but the EPA wasn’t buying it,” writes Mashable. One year ago, on September 18, EPA went public.

Four weeks ago, former Volkswagen chairman Ferdinand Piech told investigators that he approached Winterkorn about the diesel matter as early as March 2015, BILD wrote earlier. Winterkorn supposedly told the Volkswagen patriarch that “he has a handle on the matter.” Weeks later, Piech dropped the ominous sentence that he was “at a distance to Winterkorn.” At the time, it was all over the media that Piech was unhappy with Winterkorn’s U.S. strategy, and it was the general belief that the discontent concerned disappointing U.S. sales.

It may rather have been how Winterkorn mishandled the “diesel issue,” as the euphemism at Volkswagen goes.


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