VW's Schmidt loved U.S. long before facing federal charges

DETROIT -- Oliver Schmidt had come to love the United States long before it locked him up.

The German-born Volkswagen Group executive is now awaiting trial in a Michigan jail cell on 11 felony counts tied to VW’s conspiracy to cheat U.S. emissions regulations and faces up to 169 years in prison.

But a decade earlier, Schmidt had been part of an innovative moonshot by VW to stop losing money in the U.S. by finally figuring out what American consumers wanted.

“Project Moonraker” was a pet project of then-Volkswagen Chairman Bernd Pischetsrieder, undertaken after back-to-back losses of more than $1 billion in the U.S. in 2003 and 2004. It wasn’t named after the 1955 James Bond book by Ian Fleming or the 1979 film but after the original name for the Apollo missions. Yet, in many ways, Moonraker was a German spy mission -- one that left an indelible mark on Schmidt’s psyche.

For 18 months beginning in February 2005, Schmidt lived with eight other VW executives in a secluded 12,000-square-foot home in tony Malibu, Calif. There they attempted to assimilate into American culture, to understand why VW’s cars weren’t selling but competitors’ such as Chrysler’s PT Cruiser were.

The Moonraker team traveled across the country by plane, train, subway and bus, visiting drag strips and NASCAR races, the Rock and Roll Hall of Fame in Cleveland and the Mall of America in Minnesota. They went to a rodeo in Dallas. They went to spring break in Daytona Beach.

And they walked -- for three days -- from Long Beach, Calif., to Hollywood, just to observe how Americans parked their cars in parking lots and on streets, according to press descriptions at the time.

Their gathered intel coalesced on posters and charts and photographs on the walls of the Malibu mansion, and they made movies each month for their superiors in Germany to better report their findings.

The immersion in American culture during Project Moonraker was personally transformative for Schmidt, according to a blog he penned in 2013.

“Over the 18 months I spent here, I learned a lot; along the way, I also fell more in love with America,” Schmidt wrote more than a year before VW’s diesel emissions cheating was first discovered.

“Ever since I was a child, I’d always wanted to visit the US, but I never could afford it,” Schmidt wrote. “When I got my first job which was already with Volkswagen, I saved my money and took my first three vacations in the US. What was different about my time here with Moonraker was that I really got to interact with the American people. That’s when I knew I wanted to move here for good.” 

Still behind bars

Schmidt’s employer, VW, is expected to plead guilty March 10 in U.S. District Court in Detroit to three felony counts under a plea agreement that will resolve U.S. charges it installed secret software in vehicles to enable it to beat emissions tests. As part of that plea agreement with the U.S. government, VW is expected to pay a criminal penalty of $2.8 billion and fully cooperate with the ongoing investigation of its diesel emissions scandal.

But while VW accepts corporate culpability for its actions on Friday and opens its checkbook, Schmidt will still be behind bars, held as a flight risk. A hearing is scheduled in U.S. District Court in Detroit on March 16 on Schmidt’s request to be freed on bond as he awaits trial for 11 felonies in connection with the VW diesel scandal.

If convicted on all counts, Schmidt faces up to 169 years in prison -- a life sentence that other indicted VW executives have thus far avoided by staying in Germany, where they remain outside the reach of U.S. law enforcement.

Schmidt, however, was not so lucky.

His December indictment in the U.S. was under seal when he was arrested Jan. 7 at Miami International Airport while returning to Germany with his wife, Kerstin Gerdes, after their annual vacation to Florida.