Documents Show Volkswagen CEO Diess Knew About Illegal Devices

Unsealed documents from a German prosecutor’s office shed light on current Volkswagen CEO Herbert Diess’ knowledge of the costly diesel emissions scandal. Back in late July, 2015, Diess, having just taken the helm of the VW brand after arriving from BMW, sat in on a fateful meeting, German magazine Der Spiegel reports.

It seems that, for the executives at that table, the key to avoiding prosecution depends on how dumb they can claim to be.

In Diess’ case, he was a newcomer, having only just arrived at the company on July 1st. The meeting took place July 27th — less than two full months before the U.S. EPA blew the lid off the simmering scandal. At the time, the environmental regulator wanted answers after real-world tests showed sky-high levels of air pollution emanating from the tailpipes of diesel VWs.

It was later learned that years earlier, the automaker outfitted its four- and six-cylinder diesel engines with emissions-cheating “defeat devices” designed to fool regulators. The cars’ emissions control systems only turned on while the vehicle was undergoing static tests.

Der Spiegel‘s report, picked up by Reuters, reveal senior engineers and execs got together to discuss how to deal with the EPA, which was withholding certification for new diesel vehicles until VW explained itself. With former CEO Martin Winterkorn leading the meeting, the group strategized how it could win over the EPA’s trust and get the much-needed certification. All of this comes from a VW defense document filed with a Braunschweig court in February.

The German magazine reports that Winterkorn asked Diess if BMW ever used defeat devices. No, the company’s rival hadn’t, he said. As the meeting wrapped up, a VW employee cautioned both men to leave behind the copies of the presentation they had just seen, Der Spiegel claims. It would be better for them, the employee said, if they weren’t in possession of it.

VW’s official response to the report is as follows:

“The contents of the discussion, where Martin Winterkorn and Herbert Diess were present, cannot be fully reconstructed, because the recollections of the people who were present partially deviate.”

It’s up to the prosecutors and courts to determine who said what, the automaker stated, adding that it was not in violation of disclosure laws because, at the time, it didn’t grasp just how large the scandal’s impact would be.

As head of the company at the time, Winterkorn, who resigned days after the scandal broke, is likely the investigation’s main focus. He’s been the subject of a German probe for quite some time now, with American authorities laying charges last year. Diess, on the other hand, inherited this mess. As a freshly arrived brand boss back in the summer of 2015, he wasn’t calling the shots, nor could he have had prior knowledge of the devices.

The court filing also shows VW hired a law firm four days after the meeting to determine just how much regulatory trouble it might be in. Four days before the EPA came down with all its might, VW’s finance chief, current chairman Hans Dieter Poetsch, estimated the company might face penalties of $172 million.

The bill for VW’s diesel deception eventually reached $27 billion.

[Image: Volkswagen]