Porsche powertrain chief arrested in VW diesel emissions scandal

HAMBURG, Germany — Porsche's head of powertrain development has been arrested by German police in the sweeping investigation of diesel emissions violations by parent company Volkswagen Group, sources told German media outlets.

Joerg Kerner, the sources said, is being held without remand because he is considered a flight risk. Porsche CEO Oliver Blume told employees in an internal memo that an unnamed manager had been arrested.

Kerner originally came into the VW Group in 2004, when he joined Audi from Robert Bosch. At Audi, he developed the division in charge of engine- and transmission-management electronics design and software.

Earlier this year, German prosecutors widened their probe to include Audi, which developed a 3.0 liter V6 diesel engine used in about 80,000 VW, Audi and Porsche models found to have been equipped with illicit software. Beyond that engine, investigators think Audi developed the "cheating" software that let VW hide high emissions in millions of diesel passenger cars.

Kerner is considered a confidant of former Volkswagen Group CEO Matthias Mueller, who was Porsche CEO before becoming CEO of the whole VW Group in the wake of the emissions scandal. Mueller was ousted from that role last week. Kerner also worked alongside VW Group's former top engineer, Wolfgang Hatz, who was arrested last year.

Earlier this week, German prosecutors raided homes of current and former employees of Porsche, including a management board member, as part of their inquiries into the emissions manipulations. The board member is R&D chief Michael Steiner, the Sueddeutsche newspaper reported Friday.

Around 10 premises in Bavaria and Baden-Wuerttemberg were searched by around 160 officials, the prosecutor's office in Porsche's home town of Stuttgart said in a statement.

"The three suspects include a member of the management board and a member of Porsche AG's higher management. The third suspect is no longer employed at Porsche AG," it said.

A spokesman for Porsche confirmed the searches, but declined to provide further details.

More than 2½ years after Volkswagen admitted to cheating emissions tests on diesel engines in the United States, the carmaker and some of its brands continue to be investigated by authorities.

Two Audi sites were also searched on Wednesday, Stuttgart prosecutors and an Audi spokesman said. The searches were at Audi's sites in Ingolstadt and Neckarsulm, Audi said.

Reporting by Edward Taylor and Ilona Wissenbach

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