Audi CEO Takes The Fall On VW Emissions Scandal

Audi may be Volkswagen’s luxury arm, but it’s still part of the emissions scandal body, and the arrest Monday of the Audi CEO in Germany on fears he might try to evade justice is the highest-profile twist in this ongoing investigation yet.

German authorities detained the chief executive of Volkswagen's Audi division, Rupert Stadler, as part of a probe into the manipulation of emissions controls after three years have already seen billions in fines and the arrest and indictment of numerous executives, both in the U.S. and Germany.

As of last September, the scandal had already cost VW around $30 billion.

The scandal emerged in September 2015 when the U.S. Environmental Protection Agency (EPA) filed charges against VW for equipping its diesel cars from 2009 through 2016 with “defeat devices”—software designed purposefully to trick federal emissions tests.

VW and its competitors enjoyed strong sales of diesel vehicles in the U.S. and Europe for several years. They were good days for VW, leading to the highest-ranking diesel car sales for both Audi and WV brands with turbo direct injection (TDI) engines. For consumers, it meant strong performance and great fuel economy.

Volkswagen admitted to rigging nearly 11 million cars worldwide with its cheating software, which made engines appear to run cleaner during emissions testing, but out on the road, a different truth emerged.

Stadler had previously denied any knowledge that engines were rigged, and his arrest comes just days after VW agreed to pay a $1.2-billion fine imposed at the request of German prosecutors. In total, the scandal has cost the company some $30 billion and has led to criminal charges for several employees.

Ever since 2016, German prosecutors searched the homes of several current and former Audi employees in connection with the diesel emissions cheating scandal.

The arrest has been confirmed for media by both Audi and VW, who stress there is still a presumption of innocence with regard to Stadler.

Volkswagen has pleaded guilty to criminal charges in the United States. Nine of its managers, including former CEO Martin Winterkorn, have been charged. Two are serving prison terms, while Winterkorn and the others remain in Germany with no indications that they will be extradited to the U.S. Germany is currently said to be investigating a total of 50 people in connection to the scandal.

Related: Iran Warns North Korea About The United States

In the meantime, this is far from over for VW, which faces legal proceedings in 55 countries and investigations into stock-market manipulation in Germany.

Neither is the arrest of Stadler the end of the story for Audi.

According to Reuters, Germany’s automotive watchdog, KBA, has accused Audi of continuing to manufacture vehicles with illicit emissions controls, despite the scandal. KBA has ordered the recall of 127,000 Audi vehicles, which include the latest Euro-6 diesel models, all located in European Union.

In a statement issued earlier this year, Audi said that the models A6 and A7 were included in a voluntary recall of 850,000 diesel vehicles with V6 and V8 TDI engines announced in July 2017.

Now all automakers are under scrutiny because eluding emissions is turning out to be an epidemic.

Last week, KBA said that up to a million Daimler cars had been found to contain illegal emissions devices.

The agency said it has found five illicit software-functions that allegedly manipulate emissions-testing in Daimler AG diesel vehicles. This led to another recall order, this time for Daimler, the parent company of Mercedes-Benz, and 774,000 vehicles in Europe. The affected vehicles include the Mercedes-Benz Vito commercial van, the C22od sedan and the GLC22od crossover SUV.

Daimler, however, will reportedly not be slapped with fines but nonetheless is considering an appeal of the mass recall.

By Damir Kaletovic for Safehaven.com

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