VW ‘dieselgate’ chief in the firing line

Oliver Schmidt’s name is likely to go down in the annals of automotive history, irrespective of what happens in the coming weeks and months.

It is likely also that he will not feature in the prestigious US Automotive Hall of Fame which earlier this year was reported as moving to Detroit, Michigan.

But whatever does happen, Schmidt has found himself under fire. And, by being thrust into the public limelight, Schmidt’s arrest will set racing the minds of other company officials occupying a similar management position in vehicle-making companies.

Over the weekend of 8-9 January 2017, Oliver Schmidt, general manager of  the engineering and environmental department of Volkswagen of America (VWofA), was arrested in Florida, being accused of deceiving Federal regulators about the use of software that enabled emissions 'cheating' to take place during vehicle testing.

Schmidt was charged with a criminal complaint aimed at conspiracy to defraud the US Government. He faces an initial hearing in Miami, Florida, after which he may be moved to Detroit where the US Department of Justice (DoJ) is based and where he could face a further hearing.

The complaint of 30^th December 2016 questioned why Volkswagen vehicles emitted higher levels of emissions on the road than those recorded during testing.

Schmidt is reported to have offering reasons for the discrepancy that run counter to the allegation that his employer was ‘cheating’.

It is more than likely, one might assume, that Schmidt (before submitting himself to questioning) may have sought advice from VWofA senior colleagues before making his representation to the US authorities questioning him about VW's emissions 'tactics'.

Also, it might reasonably be assumed, that VWofA senior executives at the same time would have sought advice from Group headquarters in Wolfsburg. Their collective response would have to be taken into account. Additionally, it might be expected, that any of Schmidt’s legal support will be paid for by the company as he was acting on their behalf.

Meanwhile, in 2015 VW acknowledged that diesel cars sold in the US carried software that could recognise when a vehicle, such as a passenger car, was undergoing tests on a rolling road emissions dynamometer. Under such conditions the software could turn on emissions controls but as soon as that same vehicle returned to the highway the software turned off the emissions control.

This ‘cheating’, in effect, according to the Environmental Protection Agency (EPA), allowed the vehicle to emit up to 40 times the allowable limits of nitrogen oxide.

This is a case that will be viewed with more than passing interest by lower-level managers and executives in automotive manufacturing companies in the US, Europe and Japan, not least because of the important and far-reaching implications of decisions managers make on behalf of their company.

In other words. Will the company stand shoulder-to-should to these managers when the chips are down? And the chips in this case, are not computer chips. Will VW stand shoulder-to-shoulder with Schmidt?