The full extent of Volkswagens’ stupidity in cheating pollution tests — far higher than contemplated — is only just dawning on the firm. Just what is going to be left of the business — hitherto the largest car producers in the world — is anybody’s guess.
Now that some major investors in VW are beginning to organise themselves to prepare for class action in the courts — which include the sovereign wealth funds of Qatar and Norway, two of the largest in the world — then previous estimates of regulatory fines of $20 billion or so are now giving way to court fines of $40 billion.
We all know what happened. A few clever software engineers, knowing the dilemma faced by their senior management over what they felt were too strict emission standards flew a kite by proposing software that could evade high results under test conditions. But they weren’t the decision-takers. Senior management were and so long as they could plead dumb about knowing the details, then — problem solved! And senior management then at VW is top management now. They’re the stupid ones, not the software engineers.
In suing Volkswagen, share investors will be using customers’ evidence in court under Germany’s own Securities Trading Act — and going right back to 2009 when VW started fitting the dodgy exhaust systems. Although this is a case if customers acting indirectly it’s another example of the old adage, the “Customer is King”. Because Germany has too high a reputation as first class engineers I don’t suppose its other exports will be affected much, if at all. But for stupidity of top management VW takes the top prize away from GM of some years ago and that will diminish Germany’s lustre for some years to come.