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Volkswagen chief’s ‘reign of terror’ to blame for emissions scandal, writes former GM executive

on November 6 2015 | in Highlights, Industry news, Latest news | by | with Comments Off

American motoring industry maverick Bob Lutz says former Volkswagen Group board chairman Ferdinand Piech was “more than likely the root cause” of the carmaker’s diesel emissions scandal.

“Whether he specifically asked for, tacitly approved, or was even aware of the company’s use of software to deliberately fudge EPA (Environmental Protection Agency) emissions testing is immaterial,” Lutz (above) writes in a column for America’s Road & Track magazine.

It was Piech’s ‘reign of terror’ leadership style, said Lutz, ‘a culture where performance was driven by fear and intimidation.’ “He just says, ‘You will sell diesels in the US, and you will not fail. Do it, or I’ll find somebody who will.’ The guy was absolutely brutal.”

The Swiss-born Lutz, age 83, has spent a lifetime in the industry in executive roles with General Motors, BMW, Ford, and Chrysler. He writes how Piech once told him how VW improved the way the body panels fitted on the fourth-generation Golf. Lutz quotes Piech: “I called all the body engineers, stamping people, manufacturing, and executives into my conference room.

“And I said, ‘I am tired of all these lousy body fits. You have six weeks to achieve world-class body fits. I have all your names. If we do not have good body fits in six weeks, I will replace all of you. Thank you for your time today.’ ”

Former VW board chairman Ferdinand Piech

Former VW board chairman Ferdinand Piech

That’s the way Piech ran everything, writes Lutz. He continues: I imagine that at some point, the VW engineering team said to Piech, ‘We don’t know how to pass the emissions test with the hardware we have.’ The reply, in that culture, most likely was, ‘You will pass! I demand it! Or I’ll find someone who can do it!’

In these situations, your choice was immediate dismissal or find a way to pass the test and pay the consequences later. Human nature being what it is – if it’s lose your job today for sure or lose your job maybe a year from now, we always pick maybe a year from now.

That management style gets short-term results, but it’s a culture that’s extremely dangerous. Look at dictators. Dictators invariably wind up destroying the very countries they thought their omniscience and omnipotence would make great. It’s fast and it’s efficient, but at huge risk.

This diesel fiasco is immeasurable in terms of damages – so much worse than Toyota acceleration, Ford Firestone tyres, or GM ignition switches. In all those cases, tragically, people died, but it wasn’t premeditated.

You settle with the victims’ families, pay the fine, put in the new parts, and for $1.5 billion, it can all be contained. But this Volkswagen mess is like the disaster that keeps on giving.

To make the cars legal in the US, VW will need to programme them with the software that passes the test, in which case, performance is down and fuel consumption is up, and every VW TDI (diesel) owner is part of a class-action suit against Volkswagen. To retrofit a urea system is basically a nonstarter, as it would require far too much change.

There is no easy fix. But you can probably rely on the German government to do what is necessary to pull Volkswagen out of this crisis. In terms of marketing cars in the US, Volkswagen will need a radically new array of products that are much closer to mainstream American tastes than what it has.

The whole Clean Diesel campaign, as the foundation of the VW brand, cannot be resurrected. It’s history.

  • Piech resigned as chairman of the VW board last April after members voted to replace him.





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