Audi CEO’s polished exterior shows cracks amid diesel scandal

There are few German top managers as practiced as Audi CEO Rupert Stadler. This week however the polished veneer began to wear away in the steady flow of questions related to his role in the lead up to Volkswagen Group’s diesel-emissions scandal.

Just three hours before Stadler was due to present his company’s annual results at its headquarters in Bavaria, Germany, public prosecutors had raided offices in Ingolstadt and Neckarsulm, casting a cloud over the event.

“Despite the current news, I would wish that we concentrate on past fiscal year, the reason for today’s news conference,” he said. It was not to be.

While Audi was initially shielded from much of the negative publicity surrounding the EA 189 four-cylinder diesels at the heart of the emissions-rigging scandal, VW’s premium brand later came under fire for the 3.0-liter V-6 engines that were also affected.

Late last month Audi’s supervisory board, which is chaired by VW Group CEO Matthias Mueller, felt it necessary to publicly express its confidence in Stadler following allegations made by a former employee in court that he had known of the diesel-emissions fraud much earlier than he said.

At the annual press conference on Wednesday, Stadler started off strong, in control at the very beginning, with a nod to the 88,000 Audi employees suffering from the disrepute the diesel issue brought. “I myself have the greatest interest in clearing up the matter and that it’s completely clear that we are fully cooperating with the authorities.”

Why were there no consequences as a result of the scandal, a journalist asked. The Audi bosses on the stage reminded the media that former development chiefs Ulrich Hackenberg and Stefan Knirsch had been fired and moved straight on to the next question.

Yet inevitably things were going to get personal, and the cracks began to emerge. What do the latest investigations mean for his position as CEO?

“In the recent weeks I think that was sufficiently covered in the media: I personally always pushed for maximum transparency in the diesel topic.”

The questions steadily got worse, if ex-VW CEO Martin Winterkorn assumed responsibility why didn’t Stadler? He dodged the question entirely. “Look, the circumstances don’t get any better the more times you repeat it, and I believe it’s been reported and communicated repeatedly, often enough and in various places.”

Clearly he was already feeling irritated, only returning to the polished facade when he happily had a chance to answer strategic questions about the future of Audi’s business.

Was his own private residence searched, another journalist wanted to know. Stadler answered: “I’ve been in the office since 7:30 and haven’t seen anyone visit … and my wife hasn’t called me.”

In a moment of impatience, he brusquely informed the reporters that he would no longer answer any questions on the subject of the raids, regardless of how many times he was asked.

The title of Audi’s annual report is “turn.moment” – a play on words since it is a literal translation from the German word for torque (Drehmoment) as well as a reference to a new beginning after a tough 2016, during which Audi’s 8.2 percent operating margin fell beneath that of budget brand Skoda.

Stadler has served on Audi’s board first as CFO and then as CEO from April 2003 onward, and has also been on VW Group’s board since January 2010. This all predates the period that the diesel decisions were decided.

The question now is how can Stadler credibly stand for change with the magnitude of the diesel scandal that happened during his watch.

Like it or not, he will have to get used to facing hard questions as long as Volkswagen and Audi have not fully revealed the sequence of events that lead to this massive failure of compliance and integrity.


Source: AutoNews

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