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Audi CEO's Dieselgate arrest threatens fragile truce among VW stakeholders

FRANKFURT — The arrest and detention of Audi's chief executive forces Volkswagen Group's competing stakeholders to renegotiate the delicate balance of power that has helped keep Audi CEO Rupert Stadler in office. Volkswagen's directors are discussing how to run Audi, its most profitable division, following the arrest of the brand's long-time boss on Monday as part of Germany's investigations into the carmaker's emissions cheating scandal. The supervisory board of Audi, meanwhile, has suspended Stadler and appointed Dutchman Bram Schot as an interim replacement, a source familiar with the matter said on Tuesday. Schot joined the Volkswagen Group in 2011 after having worked as president and CEO of Mercedes-Benz Italia. He has been Audi's board member for sales and marketing since last September. The discussions risk reigniting tensions among VW's controlling Piech and Porsche families, its powerful labor representatives and its home region of Lower Saxony. VW has insisted the development of illegal software, also known as "defeat devices," installed in millions of cars was the work of low-level employees, and that no management board members were involved. U.S. prosecutors have challenged this by indicting VW's former chief executive Martin Winterkorn. Stadler's arrest raises further questions. Audi and VW said on Monday that Stadler was presumed innocent unless proved otherwise. Munich prosecutors detained Stadler to prevent him from obstructing a probe into Audi's emissions cheating, they said on Monday. Stadler is being investigated for suspected fraud and false advertising. Here are the main factors deciding the fate of Audi. Background: Audi's role in Dieselgate Volkswagen Group was plunged into crisis in 2015 after U.S. regulators found Europe's biggest carmaker had equipped cars with software to cheat emissions tests on diesel engines. The technique of using software to detect a pollution test procedure, and to increase the effectiveness of emissions filters to mask pollution levels only during tests, was first developed at Audi. "In designing the defeat device, VW engineers borrowed the original concept of the dual-mode, emissions cycle-beating software from Audi," VW said in its plea agreement with U.S. authorities in January 2017, in which the company agreed to pay a $4.3 billion fine to reach a settlement with U.S. regulators.

Audi CEO Rupert Stadler: Ducati is not for sale

"Ducati is not for sale." Those words, attributed to Audi CEO Rupert Stadler, are about as clear and definitive as can be, and they reiterate a previous statement about the potential sale of the premium Italian motorcycle brand that was made in March of this year. "[Ducati and Lamborghini] belong to Audi and, together with us, have an excellent future," said Stadler. Thing is, Audi, as well-off and established as it may be, still falls under the Volkswagen umbrella. And, as you're surely aware, things haven't exactly been smooth sailing for the VW Group over the last several months. The German automaker has squirreled away billions of dollars in anticipation of the legal fallout that's sure to come from the falsification of vehicle emissions data, and that's going to leave the company strapped for cash. All of that bad news led to speculation that VW could sell off some of its non-core businesses. What of the future of the Scania and Man heavy truck brands? Those don't currently appear to be on the auction block, either. VW's continued involvement in the HD truck segment was announced as part of the brand's TOGETHER - Strategy 2025 plan, in which Volkswagen outlined plans to push further into vehicle electrification and vehicle autonomy. Related Video: News Source: Asphalt & RubberImage Credit: Malte Christians/AFP/Getty Earnings/Financials Audi Lamborghini Volkswagen Motorcycle Performance Ducati Scania

Piech and Winterkorn still at odds about VW leadership plan

Volkswagen Group Chairman Ferdinand Piech (above, right) and CEO Martin Winterkorn (above, left) will be meeting in the coming days to discuss who the next leader of the Volkswagen Group will be. This, of course, comes after a report last Friday in Der Spiegel where Piech said he didn't want Winterkorn to be the automaker's next chairman. Oh, to be a fly on the wall of that conference room. As Automotive News reports, Winterkorn had been widely viewed as the probable replacement for the 77-year-old Piech, until last week, when the current chairman said he was keeping the CEO "at a distance," in the German paper. While Winterkorn confirmed to German media on Monday that he still had a job, analysts aren't sure what Piech's comments will mean for the 67-year-old CEO's future, with some indicating he may end up being a "lame duck" leader. According to AN, Piech doesn't think that Winterkorn has the vision to lead the sprawling Volkswagen Group empire, even though the current CEO has the support of a number of other VAG stakeholders. "Piech knows what he is doing and will assume that he can get the supervisory board to implement his decisions," former BMW executive turned analyst Helmut Becker told German media, AN reports. Winterkorn has just over 18 months left on his contract, while Piech's term has another two years left on it, meaning it will still be some time before we find out how the Volkswagen Group's leadership issues play out.