I don't see how anyone can draw a conclusion one way or the other. Was the German intiative delivering results?
Was mangagement initially concerned, but then dismayed by poor performance or wasteful behavior on the German end? I don't know - can't tell from the string of emails.
I'm not saying anyone is right or wrong, however, I would like to see some proof of performance and/or an audit of the German operation before I buy into the storyline.