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Audi CEO Stadler Taken Into Custody in Diesel-Cheating Probe

icebraining 8y ago
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w_t_payne 8y ago
If the culture in the automotive industry is to change, then many more executives will have to face the consequences of supporting current common practice.
- sillyquiet 8y ago
  To generalize this, 'If the culture in the <insert> industry is to change, then many more executives will have to face the consequences of supporting current common practice.'
JumpCrisscross 8y ago
> Until now, backing of the Porsche and Piech families, who control the world’s biggest carmaker, ensured him continuing in the role he’s held since 2007. It’s healthy to step back and consider how rare, in our world today and across human history, such an expression of the rule of law is. As fashionable as political cynicism may be, patience has a place before one reacts to every scandal with presuming the powerful and guilty will walk free. (It’s an unfortunate way inattentiveness produces a self-fulfilling prophesy.)
- microcolonel 8y ago
  This act could itself be politically cynical, depending on your perspective.
  - JumpCrisscross 8y ago
    > This act could itself be politically cynical, depending on your perspective There are personalities that see conspiracy in every shadow.
    - microcolonel 8y ago
      Well, instead of impugning my character and insulting my intelligence, maybe engage me on the point.
- alfredallan1 8y ago
  >presuming the powerful and guilty will walk free By and large, they do. The fact that this incident makes to the top of the “news” is testament. If things were different, an exec going to jail would be as commonplace as a convicted felon going to jail, and it would hardly be newsworthy.
  - JumpCrisscross 8y ago
    > The fact that this incident makes to the top of the “news” is testament Volkwagen is one of the world's largest companies. That's why it's headline news. A billionaire drug company's ex-CEO was arrested last year [1]. Nobody outside the Arizona, pharmaceutical or opioid crisis circles noticed. Nobody outside those circles needs to notice. [1] https://abcnews.go.com/US/drug-companys-billionaire-ceo-arrested-nationwide-bribery-scam/story?id=50737965 https://abcnews.go.com/US/drug-companys-billionaire-ceo-arre...
FranzFerdiNaN 8y ago
Good. More ceos should be arrested and jailed if companies ignore the law under their watch. Their “rogue engineer” excuse was laughable.
- usrusr 8y ago
  Yet shareholders who pushed executives over the edge with inflated performance expectations get to keep all their gains, if they sold before scandal hit. There are no sanctions in the arsenal of rule of law that could ever touch them.
  - JumpCrisscross 8y ago
    > There are no sanctions in the arsenal of rule of law that could ever touch them Prosecutors can and do pierce the corporate veil [1]. Otherwise, losing money on their investment seems like fitting punishment for disinterested shareholders. [1] https://en.wikipedia.org/wiki/Piercing_the_corporate_veil https://en.wikipedia.org/wiki/Piercing_the_corporate_veil
    - rkarroll 8y ago
      I agree. Eventually, the market should figure out that excessive goals lead to bad actors reducing long term value. So losing money on investments is as good of a feedback mechanism as any I can think of.
  - erikb 8y ago
    Afaik such pressure doesn't come from shareholders, but from the manager's own desire to get success without taking the negative effects of the risks. Sometimes the shareholders even fight for more healthy practices, also knowing that unrealistic short term expectations might cost them their investment in the long run.
    - stevehawk 8y ago
      Ya, I'm a VW share holder.. I never asked them to cheat all I'm not sure why I should be punished anymore than the big hit to market cap this has caused them.
aerovistae 8y ago
But Tesla though
- solarkraft 8y ago
  ?
opportune 8y ago
If only American CEOs saw justice beyond priced-in “fines.” Good for Germany
- JumpCrisscross 8y ago
  > If only American CEOs saw justice beyond priced-in “fines” We’re one week out from Elizabeth Holmes’ criminal indictment.
  - opportune 8y ago
    Only because she ripped off investors. Ripping off consumers goes unpunished
    - JumpCrisscross 8y ago
      > Ripping off consumers goes unpunished The FBI arrested a VW executive in Florida in connection with this same scandal [1]. And last year, Insys’ CEO was arrested [2]. Watch your confirmation bias. [1] https://mobile.nytimes.com/2017/01/09/business/volkswagen-diesel-emissions-investigation-settlement.html https://mobile.nytimes.com/2017/01/09/business/volkswagen-di... [2] https://www.google.com/amp/s/abcnews.go.com/amp/US/drug-companys-billionaire-ceo-arrested-nationwide-bribery-scam/story%3fid=50737965 https://www.google.com/amp/s/abcnews.go.com/amp/US/drug-comp...
      - alfredallan1 8y ago
        Let’s look at some other biases - so one exec from VW (a foreign company) was taken in. How many from GM who are just as guilty? What about the Equifax lot? Wells Fargo? The banks pushing crappy MBSs and ABSs on pensioners?
        JumpCrisscross 8y ago
        > How many from GM who are just as guilty? What about the Equifax lot? Broadly speaking, you get fined for fucking up. You get jailed for covering it up. American commercial law largely protects company Boards and executives from their own stupidity. This is necessary, since the difference between madness and genius can only be ascertained ex post facto.
WhompingWindows 8y ago
If corporations are considered people in the USA, will this corporation be punished for spewing thousands or more of tons of pollution onto our streets and lying about it? Oh no, corporations can't be tried like people, they just get to use their money ("free speech") to be people, but when it comes to accountability, only one man is responsible?
dalbasal 8y ago
The European auto-manufacterer test cheating is really, really pernicuous. It is mistake to view this as simple test cheating. These tests are a greater part of the "green/carbon reduction" policies that is europe's primary industrial policy of the last decade. Domestic auto manufacturers have been primary authors of these policies. The bootlegger and baptist dynamic has been very strong here. The "baptist" objective has been carbon/pollution reduction. The "bootleggers" wanted to sell more European cars by (A) giving them an advantage over imports and (B) shortening the lifespan of older cars. They have had an extremely favourable regulatory environment, EU & locally. Pollution-centric tax bands favouring local manufacturers (based on these tests) are just a piece of that. To cheat the tests on top of all this is beyond the pale. All that said, I think we have no way of holding corporations accountable. Prosecuting individuals is important (and effective), but it also semi-absolves the company. It makes it seem like individual bad actors acted against the law, and against the company. There aren't really ways of holding the company accountable, and limited liability becomes no liability in this sense. I don't even know what should be done. "Justice" (IMO) would be fairly harsh. Volkswagon Group have annual Revenue & Gross Profit of 230bn & 40bn respectively. Trillions and hundreds of millions over the life of this scam. Some nontrivial portion of these sales were unearned in the sense that they would not have happened without fraud. €1bn-€2bn isn't even meaningful. I think that shareholders should get a haircut, with a meanigful portion of the company's current value being turned over as a fine. Of course, this would only encourage a restructuring from equity to debt. IDK.... An individual business owner acting under full liability would have (in addition to jail time) almost certainly lost her entire business over something like this. To Volkswagen Group, it's a bump in the road. This is not fair.
- JumpCrisscross 8y ago
  > Prosecuting individuals is important (and effective), but it also semi-absolves the company. It makes it seem like individual bad actors acted against the law, and against the company. I'm struggling to see how prosecutors can win when the public has this attitude. Bring criminal charges against an executive? "You're semi-absolving the company." Bring record fines against the company? "Nobody jails the executives." Do both? People forget whichever happened first and recycle the above. > I think that shareholders should get a haircut This is what it means to fine a company. Takata Corporation had to file for bankruptcy as a result of its defective airbag inflators [1]. Shareholders lost and creditors lost (as did employees and those down the supply chain). [1] https://en.wikipedia.org/wiki/Takata_Corporation https://en.wikipedia.org/wiki/Takata_Corporation
segmondy 8y ago
This is what happens when management mandates crazy requirements. Same sort of rubbish happens in tech. Manager comes in and demands "100% code coverage of unit tests" Or every developer to write at least 100 lines of code each day. Push enough and you will get what you ask for, but lift the veil and you will find out that the participants are gaming the system.
internet_user 8y ago
He has not been charged so far, no criminal charges. This is just to keep him from interfering with witnesses.
- _rpd 8y ago
  Is this usual in Germany? To me it seems to be a fairly extraordinary step, almost theatrical.
  - lis 8y ago
    I would say it's at least not uncommon. Danger of collusion / "Verdunkelungsgefahr" ist an often cited reason for that.
- rbehrends 8y ago
  He has been charged with fraud (Betrug) and causing false entries to be made in public records (mittelbare Falschbeurkundung) [1]. This is not surprising, because a hard requirement for pretrial detention [1] is that it is highly likely that the suspect committed a criminal offense [2]. The risk of either flight or obstruction of justice is an additional requirement on top of him being a suspect. [1] http://www.spiegel.de/wirtschaft/unternehmen/audi-chef-rupert-stadler-festgenommen-a-1213533.html http://www.spiegel.de/wirtschaft/unternehmen/audi-chef-ruper... (in German) [2] https://www.gesetze-im-internet.de/englisch_stpo/englisch_stpo.html#p0865 https://www.gesetze-im-internet.de/englisch_stpo/englisch_st...
jasonmaydie 8y ago
it's funny looking at cars from 2013 extolling the virtues and greatness of diesel engines vs gasoline ones
stephengillie 8y ago
In a recent thread about the Daimler diesel recall, a poster claims the issue is more systemic than just cheating at individual companies. > The actual programmer & designer of the software is the supplier of the engine control units (ECUs), in most cases Bosch. The software that they supply actually already contains these cheating routines. These routines are delivered as a part of the software packages, and can be turned on/off with some flags. It is up to the auto company how to set these flags. [0] Is it legal for Bosch to sell ECUs that can cheat? Should it remain legal? [0] https://news.ycombinator.com/item?id=17286697 https://news.ycombinator.com/item?id=17286697
- dsfyu404ed 8y ago
  Cheating and adjustable for compliance in a particular locale are the same thing. Being able to fine tune how the engine runs to comply with the law and to "cheat" the law requires the same functionality. Any keyboard that you use to quote Shakespeare can be employed just as effectively to type dirty words.
  - slededit 8y ago
    A routine to detect the exact circumstances of the government emissions test, including the amount of times the steering wheel was moved was needed to fine tune the engine? Its just not credible.
    - lttlrck 8y ago
      Isn’t what happens after that condition is detected the critical point? That’s the part that I’d imagine needs to be modified/tweaked as emission standards change.
      - slededit 8y ago
        What legal basis is there for a car to behave differently during an emissions test? Its not like it has to machine learn which jurisdiction its in to tune its emissions, they know which region its going to be sold in and can make the appropriate settings. Even if some sort of detection were needed the emissions test isn't your key as not every car undergoes it, only a sample.
mathinpens 8y ago
people have died and will continue to die because of excessive emissions and this program of evasion conducted by audi and volvo was willful and malicious.
floatrock 8y ago
I wonder if the fallout of this will be VW/Audi/Porsche investing more seriously into electric cars. Their major bet on fleetwide emissions reductions has been clean diesel, but clearly that's been all smoke and mirrors. There's been articles suggesting that all the diesel OEMs are 'optimizing' their emissions testing (another poster pointed out this leads to an unrealistic ratcheting effect that furthers unrealistic expectations... regulators think their goal was achieved, so we set even tighter ones). In the 2000's, BMW bet big on hydrogen fuel cells. That one hasn't panned out either... electric is what's left.
- tonyedgecombe 8y ago
  They have announced there will be electric editions of every model in their range, even including Seat/Skoda.

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l5870uoo9y 8y ago
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ams6110 8y ago
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joshgel 8y ago
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iaml 8y ago
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mackwerk 8y ago
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If the culture in the automotive industry is to change, then many more executives will have to face the consequences of supporting current common practice.

sillyquiet 8y ago
To generalize this, 'If the culture in the <insert> industry is to change, then many more executives will have to face the consequences of supporting current common practice.'

JumpCrisscross 8y ago

> Until now, backing of the Porsche and Piech families, who control the world’s biggest carmaker, ensured him continuing in the role he’s held since 2007. It’s healthy to step back and consider how rare, in our world today and across human history, such an expression of the rule of law is. As fashionable as political cynicism may be, patience has a place before one reacts to every scandal with presuming the powerful and guilty will walk free. (It’s an unfortunate way inattentiveness produces a self-fulfilling prophesy.)

microcolonel 8y ago
This act could itself be politically cynical, depending on your perspective.
- JumpCrisscross 8y ago
  > This act could itself be politically cynical, depending on your perspective There are personalities that see conspiracy in every shadow.
  - microcolonel 8y ago
    Well, instead of impugning my character and insulting my intelligence, maybe engage me on the point.
alfredallan1 8y ago
>presuming the powerful and guilty will walk free By and large, they do. The fact that this incident makes to the top of the “news” is testament. If things were different, an exec going to jail would be as commonplace as a convicted felon going to jail, and it would hardly be newsworthy.
- JumpCrisscross 8y ago
  > The fact that this incident makes to the top of the “news” is testament Volkwagen is one of the world's largest companies. That's why it's headline news. A billionaire drug company's ex-CEO was arrested last year [1]. Nobody outside the Arizona, pharmaceutical or opioid crisis circles noticed. Nobody outside those circles needs to notice. [1] https://abcnews.go.com/US/drug-companys-billionaire-ceo-arrested-nationwide-bribery-scam/story?id=50737965 https://abcnews.go.com/US/drug-companys-billionaire-ceo-arre...

FranzFerdiNaN 8y ago

Good. More ceos should be arrested and jailed if companies ignore the law under their watch. Their “rogue engineer” excuse was laughable.

usrusr 8y ago
Yet shareholders who pushed executives over the edge with inflated performance expectations get to keep all their gains, if they sold before scandal hit. There are no sanctions in the arsenal of rule of law that could ever touch them.
- JumpCrisscross 8y ago
  > There are no sanctions in the arsenal of rule of law that could ever touch them Prosecutors can and do pierce the corporate veil [1]. Otherwise, losing money on their investment seems like fitting punishment for disinterested shareholders. [1] https://en.wikipedia.org/wiki/Piercing_the_corporate_veil https://en.wikipedia.org/wiki/Piercing_the_corporate_veil
  - rkarroll 8y ago
    I agree. Eventually, the market should figure out that excessive goals lead to bad actors reducing long term value. So losing money on investments is as good of a feedback mechanism as any I can think of.
- erikb 8y ago
  Afaik such pressure doesn't come from shareholders, but from the manager's own desire to get success without taking the negative effects of the risks. Sometimes the shareholders even fight for more healthy practices, also knowing that unrealistic short term expectations might cost them their investment in the long run.
  - stevehawk 8y ago
    Ya, I'm a VW share holder.. I never asked them to cheat all I'm not sure why I should be punished anymore than the big hit to market cap this has caused them.

aerovistae 8y ago

But Tesla though

solarkraft 8y ago
?

opportune 8y ago

If only American CEOs saw justice beyond priced-in “fines.” Good for Germany

JumpCrisscross 8y ago
> If only American CEOs saw justice beyond priced-in “fines” We’re one week out from Elizabeth Holmes’ criminal indictment.
- opportune 8y ago
  Only because she ripped off investors. Ripping off consumers goes unpunished
  - JumpCrisscross 8y ago
    > Ripping off consumers goes unpunished The FBI arrested a VW executive in Florida in connection with this same scandal [1]. And last year, Insys’ CEO was arrested [2]. Watch your confirmation bias. [1] https://mobile.nytimes.com/2017/01/09/business/volkswagen-diesel-emissions-investigation-settlement.html https://mobile.nytimes.com/2017/01/09/business/volkswagen-di... [2] https://www.google.com/amp/s/abcnews.go.com/amp/US/drug-companys-billionaire-ceo-arrested-nationwide-bribery-scam/story%3fid=50737965 https://www.google.com/amp/s/abcnews.go.com/amp/US/drug-comp...
    - alfredallan1 8y ago
      Let’s look at some other biases - so one exec from VW (a foreign company) was taken in. How many from GM who are just as guilty? What about the Equifax lot? Wells Fargo? The banks pushing crappy MBSs and ABSs on pensioners?
      - JumpCrisscross 8y ago
        > How many from GM who are just as guilty? What about the Equifax lot? Broadly speaking, you get fined for fucking up. You get jailed for covering it up. American commercial law largely protects company Boards and executives from their own stupidity. This is necessary, since the difference between madness and genius can only be ascertained ex post facto.

WhompingWindows 8y ago

If corporations are considered people in the USA, will this corporation be punished for spewing thousands or more of tons of pollution onto our streets and lying about it? Oh no, corporations can't be tried like people, they just get to use their money ("free speech") to be people, but when it comes to accountability, only one man is responsible?

dalbasal 8y ago

The European auto-manufacterer test cheating is really, really pernicuous. It is mistake to view this as simple test cheating. These tests are a greater part of the "green/carbon reduction" policies that is europe's primary industrial policy of the last decade. Domestic auto manufacturers have been primary authors of these policies. The bootlegger and baptist dynamic has been very strong here. The "baptist" objective has been carbon/pollution reduction. The "bootleggers" wanted to sell more European cars by (A) giving them an advantage over imports and (B) shortening the lifespan of older cars. They have had an extremely favourable regulatory environment, EU & locally. Pollution-centric tax bands favouring local manufacturers (based on these tests) are just a piece of that. To cheat the tests on top of all this is beyond the pale. All that said, I think we have no way of holding corporations accountable. Prosecuting individuals is important (and effective), but it also semi-absolves the company. It makes it seem like individual bad actors acted against the law, and against the company. There aren't really ways of holding the company accountable, and limited liability becomes no liability in this sense. I don't even know what should be done. "Justice" (IMO) would be fairly harsh. Volkswagon Group have annual Revenue & Gross Profit of 230bn & 40bn respectively. Trillions and hundreds of millions over the life of this scam. Some nontrivial portion of these sales were unearned in the sense that they would not have happened without fraud. €1bn-€2bn isn't even meaningful. I think that shareholders should get a haircut, with a meanigful portion of the company's current value being turned over as a fine. Of course, this would only encourage a restructuring from equity to debt. IDK.... An individual business owner acting under full liability would have (in addition to jail time) almost certainly lost her entire business over something like this. To Volkswagen Group, it's a bump in the road. This is not fair.

JumpCrisscross 8y ago
> Prosecuting individuals is important (and effective), but it also semi-absolves the company. It makes it seem like individual bad actors acted against the law, and against the company. I'm struggling to see how prosecutors can win when the public has this attitude. Bring criminal charges against an executive? "You're semi-absolving the company." Bring record fines against the company? "Nobody jails the executives." Do both? People forget whichever happened first and recycle the above. > I think that shareholders should get a haircut This is what it means to fine a company. Takata Corporation had to file for bankruptcy as a result of its defective airbag inflators [1]. Shareholders lost and creditors lost (as did employees and those down the supply chain). [1] https://en.wikipedia.org/wiki/Takata_Corporation https://en.wikipedia.org/wiki/Takata_Corporation

segmondy 8y ago

This is what happens when management mandates crazy requirements. Same sort of rubbish happens in tech. Manager comes in and demands "100% code coverage of unit tests" Or every developer to write at least 100 lines of code each day. Push enough and you will get what you ask for, but lift the veil and you will find out that the participants are gaming the system.

internet_user 8y ago

He has not been charged so far, no criminal charges. This is just to keep him from interfering with witnesses.

_rpd 8y ago
Is this usual in Germany? To me it seems to be a fairly extraordinary step, almost theatrical.
- lis 8y ago
  I would say it's at least not uncommon. Danger of collusion / "Verdunkelungsgefahr" ist an often cited reason for that.
rbehrends 8y ago
He has been charged with fraud (Betrug) and causing false entries to be made in public records (mittelbare Falschbeurkundung) [1]. This is not surprising, because a hard requirement for pretrial detention [1] is that it is highly likely that the suspect committed a criminal offense [2]. The risk of either flight or obstruction of justice is an additional requirement on top of him being a suspect. [1] http://www.spiegel.de/wirtschaft/unternehmen/audi-chef-rupert-stadler-festgenommen-a-1213533.html http://www.spiegel.de/wirtschaft/unternehmen/audi-chef-ruper... (in German) [2] https://www.gesetze-im-internet.de/englisch_stpo/englisch_stpo.html#p0865 https://www.gesetze-im-internet.de/englisch_stpo/englisch_st...

jasonmaydie 8y ago

it's funny looking at cars from 2013 extolling the virtues and greatness of diesel engines vs gasoline ones

stephengillie 8y ago

In a recent thread about the Daimler diesel recall, a poster claims the issue is more systemic than just cheating at individual companies. > The actual programmer & designer of the software is the supplier of the engine control units (ECUs), in most cases Bosch. The software that they supply actually already contains these cheating routines. These routines are delivered as a part of the software packages, and can be turned on/off with some flags. It is up to the auto company how to set these flags. [0] Is it legal for Bosch to sell ECUs that can cheat? Should it remain legal? [0] https://news.ycombinator.com/item?id=17286697 https://news.ycombinator.com/item?id=17286697

dsfyu404ed 8y ago
Cheating and adjustable for compliance in a particular locale are the same thing. Being able to fine tune how the engine runs to comply with the law and to "cheat" the law requires the same functionality. Any keyboard that you use to quote Shakespeare can be employed just as effectively to type dirty words.
- slededit 8y ago
  A routine to detect the exact circumstances of the government emissions test, including the amount of times the steering wheel was moved was needed to fine tune the engine? Its just not credible.
  - lttlrck 8y ago
    Isn’t what happens after that condition is detected the critical point? That’s the part that I’d imagine needs to be modified/tweaked as emission standards change.
    - slededit 8y ago
      What legal basis is there for a car to behave differently during an emissions test? Its not like it has to machine learn which jurisdiction its in to tune its emissions, they know which region its going to be sold in and can make the appropriate settings. Even if some sort of detection were needed the emissions test isn't your key as not every car undergoes it, only a sample.

mathinpens 8y ago

people have died and will continue to die because of excessive emissions and this program of evasion conducted by audi and volvo was willful and malicious.

floatrock 8y ago

I wonder if the fallout of this will be VW/Audi/Porsche investing more seriously into electric cars. Their major bet on fleetwide emissions reductions has been clean diesel, but clearly that's been all smoke and mirrors. There's been articles suggesting that all the diesel OEMs are 'optimizing' their emissions testing (another poster pointed out this leads to an unrealistic ratcheting effect that furthers unrealistic expectations... regulators think their goal was achieved, so we set even tighter ones). In the 2000's, BMW bet big on hydrogen fuel cells. That one hasn't panned out either... electric is what's left.

tonyedgecombe 8y ago
They have announced there will be electric editions of every model in their range, even including Seat/Skoda.