Audi urges staff to ignore report on chief's ousting

Chairman rubbishes claim by German tabloid that Rupert Stadler was about to be replaced over Dieselgate scandal

A TDI Audi diesel engine. Audi chief executive Rupert Stadler will not be standing down, contrary to German media reports. Pau Barrena/Bloomberg

Audi chairman Matthias Mueller appealed to workers to ignore a media report that chief executive Rupert Stadler was about to be ousted, hoping to quell further unrest at the scandal-hit Volkswagen group.

German tabloid Bild reported on its front page at the weekend that Mr Stadler would leave in April because of his handling of the diesel emissions affair, in which Audi played a prominent role. The report said Mr Stadler would, however, be given a new role as VW group finance chief.

In a message to Audi staff, Mr Mueller, who is also CEO of parent company Volkswagen, said the luxury car maker needed the full concentration of management and workers to overcome its current challenges under Mr Stadler's "proven leadership".

"Please pay no attention to the personnel speculation spread by the media, which lacks any foundation," Mr Mueller said in the message.

Volkswagen has repeatedly attempted to draw a line under a scandal that broke out in 2015 when it admitted cheating diesel-emission tests in the United States to conceal the amount of noxious gases emitted by some of its vehicles.

Under Mr Mueller, who took over when Martin Winterkorn quit days after the scandal broke, the leading German car maker has settled the main US legal case to result from the cheating and sought to turn the page with an electric-vehicle initiative.

But the "Dieselgate" crisis refuses to die, reigniting conflicts between the powerful family, management, trade union and political interests who vie for the upper hand in the group.

On Thursday, Volkswagen's top labour representative said the company's drive to improve accountability, seen by investors as a major plank in VW's ability to regain trust, had made zero progress.

Sources have said that Mr Mueller is growing frustrated by a lack of support for his reform efforts and by the lingering scandal. VW chairman Hans Dieter Poetsch said last week there was no reason to question Mr Mueller's position.

The revelation last month that German car makers including Volkswagen had commissioned tests in which monkeys were exposed to toxic diesel fumes were a stark reminder that VW had not yet put its past behind it.

And this month, Audi's headquarters were searched by German prosecutors widening their inquiry into the manipulation of diesel-emissions tests.

Mr Stadler ran finance at Audi for four years before becoming CEO in 2007. He was a confidant of, and former assistant to, then-VW chairman Ferdinand Piech, the scion of Volkswagen's controlling clan who was himself ousted in 2015.

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His position as CEO has been questioned before but so far Audi's board has rallied around him.

Bild said Mr Stadler would be moved to take charge of VW group's finance portfolio, currently run by Frank Witter, a former head of the car maker's financial services division. Mr Witter is well regarded among investors and uncontroversial with VW's powerful unions, a source close to VW said.

Sources close to Audi said there had been no discussion on the supervisory board about replacing Mr Stadler. The controlling panels at Audi and parent VW are due to hold separate regular meetings next week.

Porsche, the group through which the billionaire Porsche and Piech families control their majority stake in VW, declined comment.

A senior source close to VW told Reuters last week that Mr Stadler retained the backing of the Porsche-Piech clan.

Bild said that ex-Skoda chief Winfried Vahland - who quit the VW group weeks after the scandal broke out in 2015, declining to take up his post as North America chief - was favourite to succeed Mr Stadler.

Should Mr Vahland refuse the job, BMW development chief Klaus Froehlich was a possible alternative, it said.

But BMW said Mr Froehlich was not a candidate to replace Mr Stadler.

Reuters could not immediately reach Mr Vahland, who has kept a low profile after quitting Volkswagen.

Audi, VW's main profit contributor, did not admit to using illicit emissions control devices in the US until November 2015, two months after the scandal at parent VW was revealed.

Audi developed the bigger 3.0 litre V6 diesel engines used in about 80,000 VW, Audi and Porsche models that in 2015 were found to be equipped with illicit software and to exceed US emissions limits.