VW names interim Audi boss, seeking to steady brand after CEO arrest
* VW suspends Audi CEO after his arrest
* Names sales executive Abraham Schot as interim Audi boss
* VW shares extend Monday's losses, down 3 percent
(Adds source comments, background, updates shares)
By Irene Preisinger and Ilona Wissenbach
MUNICH, June 19 (Reuters) - Volkswagen suspended
Audi boss Rupert Stadler and announced an interim replacement on
Tuesday, seeking to steady its most profitable business after
German authorities arrested Stadler as part of an emissions
Audi said Stadler, 55, had requested to temporarily step
down from his position, and named sales executive Abraham Schot
as an interim replacement with immediate effect, confirming an
earlier Reuters story.
Stadler's arrest has thrown Volkswagen (VW) back into
turmoil almost three years after it admitted to using illegal
software to cheat U.S. emissions tests on diesel engines.
Analysts said the arrest raised questions about whether
Europe's biggest carmaker had done enough to reform in the wake
of the crisis, and that it threatened a delicate truce among the
group's powerful stakeholders, who had previously clashed about
whether Stadler should remain in power.
Schot joined the VW group in 2011 after having worked as
president and CEO of Mercedes-Benz Italia. He has been Audi
board member for sales and marketing since last September.
Munich prosecutors arrested Stadler at his home in
Ingolstadt in the early hours of Monday, saying they saw a risk
he could try to suppress evidence. Prosecutors tapped his phone,
a person familiar with the investigation told Reuters.
He remains remanded in custody in Augsburg, but has not been
charged with a crime.
VW and Audi said on Monday that Stadler was presumed
innocent unless proven otherwise.
Last week, Munich prosecutors said they were investigating
Stadler for suspected fraud and false advertising and for his
alleged role in helping to bring cars equipped with illegal
software on to the European market.
VW has set aside around $30 billion to cover the cost of
fines, vehicle refits and lawsuits arising from its "dieselgate"
scandal, and is spending billions more on electric vehicles to
try to rebuild its reputation.
VW has for years said only lower-level managers knew of the
emissions cheating. However, U.S. authorities filed criminal
charges against former VW boss Martin Winterkorn earlier this
year, and German prosecutors continue to investigate.
DEVELOPED AT AUDI
The technique of using software to detect a pollution test
procedure, and to increase the effectiveness of emissions
filters to mask pollution levels 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.
Stadler has been under fire from the media, politicians and
VW's powerful trade unions for his handling of the scandal, but
he survived a management reshuffle announced in August thanks to
backing from the Piech and Porsche families that control VW.
Peter Mosch, deputy chairman on Audi's supervisory board and
head of its works council, said labour representatives had
backed a move to appoint Schot as interim CEO to ensure that
Audi's business did not suffer from the leadership crisis.
"For the employees it is now important that the interim CEO
returns the company to calmer waters, drives the (diesel)
investigation and brings it to a conclusion, but mostly keeps
the day-to-day business in view," he said in a statement.
At 1415 GMT, VW shares were down 3 percent at 151.48 euros,
extending Monday's decline.
(Additional reporting by Joern Poltz and Jan Schwartz; Writing
by Edward Taylor and Maria Sheahan; Editing by Keith Weir and
First Published: 2018-06-19 09:40:42
Updated 2018-06-19 16:26:29
© 2018 Thomson Reuters. All rights reserved. Reuters content is the intellectual property of Thomson Reuters or its third party content providers. Any copying, republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters. Thomson Reuters shall not be liable for any errors or delays in content, or for any actions taken in reliance thereon. "Reuters" and the Reuters Logo are trademarks of Thomson Reuters and its affiliated companies.