VW forced to pay innocent Dieselgate engineer $18 million

The Volkswagen Group last week pilloried German media outlet BamS for claiming it gave former Porsche boss Wolfgang Hatz a €12 million golden parachute.

Chagrined, BamS dug a little deeper and admitted it had been wrong and Volkswagen had been right: Hatz’s payout wasn’t €12 million ($A17 million), but rather it added up to €13 million ($A18 million).

When BamS made its initial claim last week, the Volkswagen Group’s spokesman Hans-Gerd Bode insisted it was “definitely nonsense”.

Hatz was suspended over the Volkswagen Group’s Dieselgate emissions-cheating scandal, mainly because of intersecting timelines in his role as the Volkswagen Group head of powertrain. Though no internal or government investigation found any evidence of his wrongdoing, he left the company at the start of this year.

Unlike 13 other Volkswagen Group executives, including the Group’s former head of development, Heinz-Jakob Neusser, Hatz has never been criticised by the Jones Day investigation or charged by the US Department of Justice over the scandal.

While he has never been officially cleared either, Volkswagen Group CEO Matthias Mueller was sufficiently confident of his innocence that he offered him a Volkswagen management board seat as recently as late last year.

Indeed, Hatz was welcomed on to Audi’s stand at November’s Los Angeles motor show, which was in stark contrast to his former colleague, Oliver Schmidt. The go-between connecting the Volkswagen Group to the world’s key regulatory authorities, Schmidt was arrested in January trying to fly back to Germany at the end of a family vacation in Florida and will spend at least a year in jail pending the beginning of his trial for attempting to defraud the United States.

But the 58-year-old Hatz will still receive more than €13 million for, in effect, being booted out of the Volkswagen Group under what the current boss now sees as false pretences.

In a deal finalised after a meeting with the Supervisory Board (which also includes Mueller), BamS found evidence that Hatz would be paid €3 million to wind up his management agreement two years early (it would have expired on February 1, 2019). Hatz is now free to work for other car-makers or tier-one suppliers if he chooses to.

He is also due €4 million in bonuses from his tenure as head of Porsche development, plus a €6 million severance payment.

While most of the Volkswagen Group’s senior managers put their hands up for a limited-edition Porsche 911 R, Hatz was successful. Though Porsche insists he has paid for his car, a favour has clearly still been done (though if the former head of Porsche development can’t buy his favourite Porsche, something would be pretty wrong).

He is only the latest in a line of Volkswagen Group executives to leave in the wake of Dieselgate and his payout will only cause further unrest about executive remuneration in a country whose blue-collar wages have barely risen in a decade.

The last was Christine Hohmann-Dennhardt, the 66-year-old executive brought in hurriedly from Daimler as the board member responsible for integrity and law. She left after just a year due to what Volkswagen called “differences in their understanding of responsibilities and future operating structures within the function she leads” with a €15 million payout ($A21 million).