VW’s Winterkorn Implicated by Former Engine-Development Head

(Bloomberg) -- Former Volkswagen AG Chief Executive Officer Martin Winterkorn told managers in mid-2015 to only partly disclose its problems with diesel-emission software to U.S. regulators, a former VW executive told a German court.

The order was given at a meeting in July 2015 -- two months before the emissions issues became a global scandal -- Heinz-Jakob Neusser, who was the head of engine development, said at a hearing on Monday. The allegation also implicates current CEO Herbert Diess, who took part in the meeting shortly after he had joined the board.

Neusser addressed the court as part of his wrongful dismissal suit against the carmaker at a labor court in Braunschweig. It’s the first time that Neusser talked publicly about the events that eventually led to U.S. regulators disclosing the probe in September 2015. VW admitted using the software in 11 million diesel vehicles, and the financial toll has so far reached 30 billion euros ($33 billion) in fines and other expenses.

Neusser, who has been charged both in the U.S. and Germany over the diesel scandal, told the court that he only learned about a week before the crucial July 25 meeting about software “irregularities” and suggested they should be fully disclosed. However, his suggestion wasn’t put into a report presented to the leadership and at the meeting, known as the “Damage Table,” Winterkorn decided not to disclose information, he said.

“Winterkorn decided and ordered it, and there was no further discussion,” said Neusser.

VW’s lawyer, Thomas Mueller-Bonanni, said Neusser’s version of the event was hardly credible given everyone knew that regulatory approvals for a new generation of models were at stake. He emphasized that there have have been several accounts of the crucial meeting.

“It’s totally far-fetched that in such a situation, two board members would make a clear order to deceive U.S. authorities,” Mueller-Bonanni told the court. “Instead, the issue was given back to the responsible units.”

VW said that Neusser didn’t provide any proof for his claim that management board members tried to hide the rigging.

He’s trying “to downplay his own significant responsibility for the diesel crisis,” the company said in a statement.

Neusser, who the court said made 45,000 euros a month, was fired by VW three times.

He first got the ax in August 2018, when the company claimed Neusser didn’t address the emissions issue in 2011 when he joined the VW brand as head of engine development. The automaker says he even approved an update of the disputed technology later.

In September 2018, VW sent him the second termination notice, this time for not returning one of his four company cars in time. The last dismissal was mailed in June, after Neusser was charged by German prosecutors.

A ruling was scheduled for Nov. 25.

To contact the reporter on this story: Karin Matussek in Berlin at kmatussek@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net

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