September 25, 2015 Leave a Comment
Oh my goodness! Volkswagen, which distanced itself from its Adolf Hitler aided beginnings and the taint of using slave labor to become the largest automobile manufacturer in the world has exploded in the biggest manufacturing scandal of the year – maybe in several years but who can keep track?
From Upton Sinclair’s exposure of corporate meat packing fraud and filth to today, the rolls are filled with dishonorable corporate activity. I know, I know, not all of the, but how many bad apples in a barrel before you don’t want anything to do with the whole lot? Here are a couple of lists just to jar loose the memories. The Biggest 25 Ever (probably not, but all recent.) And here’s a Wiki list, pretty short on Gilded Age scandals but still, many.
So, the problem is not, nor has ever been, one bad apple. The problem is the set up of corporations to spin up the “virtuous circle” of profits and the resistance to any kind of regulation or oversight for the common good. Today’s James B Stewart article in the NY Times makes the point about VW with plenty of detail: it was not just the CEO Winterkorn, nor a rogue engineer somewhere. It starts at the top, with the Board.
Volkswagen’s recent history — a decades-long feud within the controllingPorsche family, a convoluted takeover battle and a boardroom coup — has dominated the German financial pages and tabloids alike. This week, the German newspaper Süddeutsche Zeitung compared Volkswagen’s governance to that of North Korea, adding that its “autocratic leadership style has long been out of date.” It said “a functioning corporate governance is missing.
… I spoke this week to a longtime former senior Volkswagen executive, who agreed that a scandal, especially one involving emissions, was all but inevitable at Volkswagen. He cited the company’s isolation, its clannish board and a deep-rooted hostility to environmental regulations among its engineers. … engineers felt that the politicians were guilty of rank hypocrisy, especially in the United States, also grumbling that electric cars make no sense as long as power plants are burning fossil fuels.
“There’s an attitude of moral superiority there,” he said. “The engineers think they know best.”
Paul Krugman weighs in with a quick summary of very recent corporate scandals and hammers the drum for a return to reasonable regulation.
There are, it turns out, people in the corporate world who will do whatever it takes, including fraud that kills people, in order to make a buck. And we need effective regulation to police that kind of bad behavior, not least so that ethical business people aren’t at a disadvantage when competing with less scrupulous types. But we knew that, right?
Well, we used to know it, thanks to the muckrakers and reformers of the Progressive Era. But Ronald Reagan insisted that government is always the problem, never the solution, and this has become dogma on the right.
As a result, an important part of America’s political class has declared war on even the most obviously necessary regulations.
And ALL PRAISE! to the folks who found out:
Peter Mock, European managing director of a International Council on Clean Transportation and his American counterpart, John German, were sure that tests would show VW diesel to be clean! They hired West Virginia University’s Center for Alternative Fuels, Engines and Emissions where Dan Carder was director and research assistant professor Arvind Thiruvengadam and his colleagues hoped to be able to publish a few scholarly articles. They actually had results a year ago which triggered more tests and inquiries by the EPA and European authorities. Bam! The VW castle is barely standing.
And, by the way, were automobile code “open code” instead of proprietary, some young nerds might have discovered the problem several years ago.