First Volkswagen Manager Goes To Jail For Dieselgate – Forbes

Posted: Friday, January 06, 2017

A vintage Volkswagen Beetle outside a Volkswagen Korea showroom in Seoul (Photo: JUNG YEON-JE/AFP/Getty Images)

Volkswagen’s dieselgate scandal is beginning to cost the personal freedom of its managers. A South Korean court sentenced a Volkswagen executive to 18 months in jail for fudging the type approval of Volkswagen vehicles, Reuters said. According to the court, “Volkswagen has by itself undermined its credibility as a global brand as a result of this crime which has caused grave social and economic damages.”

The executive was only identified by his surname, Yun, or Yoon, depending on the transcription from Korean. A 52-year-old Yoon was arrested in Seoul in July of last year. Last year, South Korea’s Environment Ministry also filed a criminal suit against Johannes Thammer, managing director of Audi Volkswagen Korea. That suit appears to still be pending. According to Germany’s Manager Magazin, if Thammer wants to travel outside the country, his wife has to stay behind, thereby securing Thammer’s return to Seoul.

Meanwhile in the U.S., Volkswagen engineer James R. Liang is awaiting his sentencing. Last September, Liang pleaded guilty after being charged with conspiring to commit wire fraud and violating U.S. clean air laws. Liang cut a deal with prosecutors, and turned into a cooperative witness. In order to “allow more time for defendant’s cooperation in the investigation,” Liang’s sentencing, originally scheduled for February 1, was delayed until May 3 a few days ago.

Volkswagen managers worrying about their career ending behind bars already cause major headaches in the company’s far-flung global operations. Managers sent abroad want to get home ASAP, “and many are reluctant to accept a foreign posting,” a contact at Volkswagen told me. For the first time, Volkswagen’s board from CEO Matthias Mueller on down will skip the Detroit Auto show that will open its doors on Sunday. Volkswagen offered Reuters the rather meek excuse that because there is no Volkswagen Group Night, the board doesn’t need to go. “It’s not about not going, it’s about not coming back,” my Wolfsburg contact quipped.

The EU and South Korea entered a trade agreement in 2011, and instead of the EU being swamped with even more Korean cars, the opposite happened. Previously a closed market, South Korea developed “a voracious appetite for imported cars,” as Reuters put it. Especially in high demand were German high end cars of the kind Hyundai and Kia did not want to produce. That demand received a damper. Sales of imports in South Korea were down 6.5% last year, mostly due to a stop sale on 80 Volkswagen models in August of 2016.

Volkswagen Group sales in South Korea were sliced in half to 33,000 in the January through November period of 2016, data of the importer association KAIDA shows. Largest importers to South Korea are BMW and Daimler, both with 51,000 units to their names for January through November.

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