Trial of former Volkswagen CEO opens in Germany as group considers closing factories

The trial of the former CEO of Volkswagen opens in Germany on Tuesday, in the Dieselgate affair. This scandal, and Chinese competition, which have weakened the group’s sales.

In Germany, an unprecedented trial opens on Tuesday, September 3, that of Martin Winterkorn, the former boss of Volkswagen. The former CEO of the automobile group is being tried for his role in the Dieselgate affair, one of the biggest industrial scandals in Germany. The facts date back to 2015, when Volkswagen admitted to having installed fraudulent software on millions of vehicles to thwart anti-pollution tests.

This highly sophisticated software detected when cars were subjected to an anti-pollution test. It then triggered a mechanism that allowed nitrogen oxide emissions to be displayed that were much lower than the reality.

The US Environmental Protection Agency has shown that in some cases, vehicles exceeded the permitted standards by up to 40 times. The Volkswagen Jetta TDI, which was voted “green car of the year” in the United States in 2009, for example, was more polluting than a 30-ton diesel truck. Between 2009 and 2015, more than 10 million cars equipped with this trick software passed the strict American anti-pollution tests without a hitch.

Martin Winterkorn, Volkswagen’s boss for eight years, claims to have been completely unaware of this gigantic fraud. The former CEO, now 77, claims to have discovered the deception only in 2015, when the scandal broke. He, who was used to scrutinizing the smallest details to check the quality of the cars, will have to convince the court.

In this trial, which is expected to last a year, 89 days of hearings are planned. It had been postponed several times due to the health problems of the accused. The scandal has plunged the Volkswagen group into the most serious crisis in its history. The manufacturer has paid out more than 30 billion euros to settle several disputes related to Dieselgate.

These are definitely not good times for Volkswagen. It was announced on Monday that the company is considering closing factories in Germany. For years, Volkswagen has been suffering from a decline in sales in the face of Asian competition, which is offering more affordable electric vehicles. The manufacturer is losing more and more ground in China, its main market.

Within the group, it is the historic flagship brand, Volkswagen, which is in the most difficulty. Its results are not up to those of Skoda, Seat or Audi, the other brands in the group. The plan launched last year to save 10 billion euros is no longer sufficient and management is therefore considering laying off staff. The German press is talking about the possible loss of 20,000 jobs. Sites could also close their doors in Germany, which would be a historic first since Volkswagen was founded in 1937.