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Audi’s CEO, in Jail, Steps Down from Audi and Volkswagen Boards [Update]

Jens Meiners
Photo credit: Getty/Sean Gallup - Car and Driver

From Car and Driver

Update, 10/02/2018: Volkswagen has issued a statement saying jailed Audi CEO Rupert Stadler has agreed to step down from the boards of management of Audi and Volkswagen. Stadler was chairman of the Audi board and a member of the Volkswagen board. The automaker's statement said Stadler "is doing so because, due to his ongoing pretrial detention, he is unable to fulfill his duties . . . and wishes to concentrate on his defense." Stadler had been with Audi since 1990 and had been chairman of the board of management since January 1, 2007.

Update, 8/16/2018: According to Bloomberg, the German courts have denied suspended Audi CEO Rupert Stadler's request for bail. The executive remains jailed nearly two months after his arrest; allegations of evidence tampering (relating to a phone call to a witness) appear to have played a role in Stadler's bail rejection.

The Volkswagen Group diesel-emissions scandal has reached a climax. In an unprecedented move by prosecutors in Munich on Monday, Audi CEO Rupert Stadler was jailed. Prosecutors had monitored his phone and suspected that Stadler was attempting to “obfuscate” the investigation into alleged cheating devices fitted on some Audi models. They claim that Stadler had received an email in late 2015, months after the scandal broke, that hinted at manipulated exhaust systems. Not stopping their sale immediately, the prosecutors allege, amounted to fraud.

Hauling an acting CEO off to jail is the maximum possible disruption the prosecutors could have inflicted on Audi. Stadler may be set free within days; however, there is no guarantee. Former Volkswagen Group board member Wolfgang Hatz has been jailed for over eight months now-without a trial date.

After some deliberation, Audi and the Volkswagen Group’s supervisory boards have appointed Abraham (Bram) Schot, the brand’s board member for sales and marketing, to take over Stadler’s role in an interim fashion. Schot is a rookie at Audi. He left Mercedes-Benz Italy to join the VW Group in 2011 in a strategic function; in 2012, he took responsibility for sales and marketing of VW Commercial Vehicles and took over the same function on a board-member level at Audi last September.

In his short tenure, Schot has had little contact with the media, but internally, he has already built a reputation for being a pragmatic, hands-on executive. His educational background is in business administration, not in engineering, and that means, insiders say, that “He doesn’t question every screw on a new car.” That’s a marked departure from the Hackenberg/Winterkorn leadership style, but not that much different from Stadler’s. And Schot has a passion for cars, we’re told; he’s not merely a numbers guy.

Schot’s approach to powertrain technology is described to us as “giving the markets what they need”-and that still includes diesels. While their market share at Audi has dropped from nearly 50 percent to 40 percent in Germany, diesel sales have not been affected at all in some other European markets.

For now, Schot is an interim CEO, and he continues to hold responsibility for sales and marketing. In the long run, anything is possible, including a CEO from an outside company or even the return of Rupert Stadler. The Volkswagen and Audi supervisory boards have allowed him to formally request that he be released from his position and made it a point to state that the leave is temporary.

We expect little impact on Audi’s product portfolio. The new generation of diesels easily complies with the latest regulations, there is increasing 48-volt hybridization of the portfolio, and the EV niche will be served by a number of upcoming cars, beginning with the e-tron crossover, which is set for unveiling in late August.

It’s the long-term impact that is disturbing. The mood in Ingolstadt is professional but somber; the enthusiastic spirit that prevailed at Audi for decades is in danger of vanishing.

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