2017-01-19 09:29:09
Ex-Chief of VW Holds Firm During Grilling on Emissions Deception

BERLIN — Volkswagen’s former chief executive, Martin Winterkorn, yielded no ground on Thursday during a polite grilling by German lawmakers over the carmaker’s diesel-emissions deception, but he astonished them by insisting that he had not heard the term “defeat device” before September 2015, when the scandal broke.

Appearing in public for the first time since he resigned over the case, Mr. Winterkorn, who worked at the company for more than 35 years, contended, as he has all along, that he had not been aware of any wrongdoing.

But his assertions are increasingly difficult to defend after Volkswagen pleaded guilty in the United States last week to criminal charges that included conspiracy to defraud the government, violations of the Clean Air Act and obstruction of justice. The company is paying $20 billion to resolve civil and criminal charges related to the scandal.

Mr. Winterkorn, who has not been charged, was chief executive throughout the decade when, as Volkswagen now admits, employees devised software, known as a “defeat device,” that could hide excess pollutants during testing by regulators. The employees, including several high-ranking managers, covered up the wrongdoing for years.

But in his comments on Thursday, Mr. Winterkorn reiterated that he had not known of the efforts to evade emissions rules.

“How striving for perfection could end this way” mystified and preoccupied him, Mr. Winterkorn told a parliamentary committee charged with investigating the scandal and with determining if the German government had been aware of it before the news broke. “The unthinkable has happened and we must all deal with it.”

It was doubly difficult to imagine, Mr. Winterkorn said, because he had been in daily contact with employees and “never did I have the impression that anyone was afraid to speak an open word with me.”

Whether Mr. Winterkorn knew of the emissions cheating and cover-up is a crucial question for Volkswagen, even though he no longer leads the company. Any culpability on his part would make the company more vulnerable to lawsuits by shareholders, who accuse the leadership of failing to properly disclose the risks it was taking. The lawsuits seek billions of dollars in damages.

Volkswagen’s plea agreement with the Justice Department in Washington last week left no doubt that the fraud was the work of dozens, if not hundreds, of employees, rather than the result of a handful of rogue engineers as the company had first claimed. The settlement calls for the carmaker to pay $4.3 billion in civil and criminal penalties to the American government.

The company did not say in the plea agreement that a member of the management board had known of the emissions cheating and cover up. But several people indicted by American authorities last week had reported directly to Mr. Winterkorn, raising questions of what he had known.

Those indicted last week are among company employees suspected of a far-reaching cover-up that included feeding reams of false data to federal and state regulators, who in 2014 began asking questions about emissions by diesel cars made by Volkswagen.

When it became clear in mid-2015 that accusations of fraud would soon be made public, a company lawyer prompted at least 40 employees to destroy potentially incriminating documents, according to the plea agreement.

In 90 minutes of questioning on Thursday, Mr. Winterkorn provided details on a variety of issues related to Volkswagen’s business, but he was vague when asked about the emissions scandal and whom he had informed about it.

In part, he was doing the German equivalent of invoking the Fifth Amendment in the United States, citing an investigation by state prosecutors in Braunschweig, a city close to the carmaker’s headquarters in Wolfsburg. The authorities in Braunschweig are considering pursuing a case against Mr. Winterkorn.

But the former chief executive also repeatedly replied, “I am not aware,” or “I don’t know,” when asked about conversations with Chancellor Angela Merkel of Germany and Ferdinand Piëch, the chairman of Volkswagen’s supervisory board until late April 2015.

Mr. Winterkorn said that he had informed Mr. Piëch in March 2015 about a recall in the United States of up to 500,000 vehicles, a move consistent with his reputation for staying close to the chairman of the supervisory board. He added, however, that he had not known the exact reason for the recall, and that he therefore could not have relayed it to Mr. Piëch.

Members of the parliamentary committee voiced surprise and disappointment over Mr. Winterkorn’s testimony.

“He missed a really good chance to shed more light,” said Ulrich Lange, a Christian Social Union lawmaker.

Herbert Behrens, the chairman of the parliamentary committee investigating the issue, described being incredulous when Mr. Winterkorn said he had not heard of the term “defeat device” before the scandal broke.

There is some reason to doubt Mr. Winterkorn’s assertion. Mr. Gottweis, a Volkswagen executive who specialized in solving technical emergencies around the world, warned in a memo in May 2014 that American regulators were likely to investigate “whether Volkswagen implemented a test detection system in the engine control unit software (so-called defeat device).”

The memo was included in a stack of weekend reading given to Mr. Winterkorn at the time, but Volkswagen has said it was not clear if Mr. Winterkorn had read it. Mr. Gottweis reported directly to Mr. Winterkorn, however, and it is deemed unlikely that a warning from an executive known internally as “the fireman” would have been ignored.