On (black) friday, 18th September, Volkswagen has publicly admitted to have rigged the US emission tests. A scandal so big that it has been compared to the BP’s oil spill. An image-breaker of such a magnitude that it makes Herr Porsche, the grandfather of Volkswagen and engineer-genius, whose work stands behind the cult of car, turn in his grave.
Every now and then, some company makes a mistake so big that it can cost it its existence.
It is believed that the huge settlements that followed the Deepwater Horizon oil spill have been carefully calculated – a maximum bill that the BP could pay without going out of business. This time around though, the bureaucrats may not be so kind. The free market economy is neither free, nor economical and certainly not fair. The success of companies is dictated by one too many factors beyond the forces of the free market. Employees push for wages, customers by definition want more for less and investors deserve a fat return, of course. And then there are bureaucrats. State bureaucrats, who albeit if insignificant one-by-one, can sometimes dictate the survival rate of companies. They make their decisions based on public opinion and political partisanship. I dare to argue that it is no coincidence that the Volkswagen’s revelations came out at the time, when speculations about Apple car pick up steam. Think Kafka minus the ridicule.The world is not black & white. Rules are set, so that a concensus can be found about how they are to be followed.
Volkswagen was being very stupid. Not on the individual, but rather the organisational level.
Being at the helm of a premium German carmaker with a reputation to maintain and one too many parties to please, Mr. Winterkorn may have pushed impossible targets onto his people. One can imagine that under the pressure, the middle and senior management may have come back to report only positive results and “forgive” the problems. A modus operandi that was not perfectly clean, but has met the targets and ticked off the rules set by the regulators. A “consensus” was found with what the bureaucrats requires. Other carmakers, it seems, have exceeded the emission limits too. The scandal caused by Volkswagen has started a witch-hunt by regulators, universities and all possible public bodies. Now and then, the bureaucrat wakes up, only to change what is accepted as a consensus. A victim must be chosen to send a clear message. Volkswagen as a company was immoral and unethical. The bill coming its way may, however, be lethal just to make a point. The auto industry must go.Cars are parked 95% of time. Technologically, they are brilliant, but so very unnecessary. Something that has been true for over two hundred years became obvious thanks to Google. Jokes aside, the development of their self-driving car is well-advanced, with more than 1.1 million logged test miles. The self-driving car could become a “community good”. One can imagine roads filled with the bot-controlled vehicles, which would take people where they need to, when they need to. An unparalleled reduction in the number of cars on the road. Add Tesla’s batteries and you have revolution in how we travel. And yet, even if the auto industry might be ripe for this change, it still needs a gentle push. Car is an object of desire. Car ownership is a social and cultural statement of each one of us. Automatic car, as safe and efficient as it might be, is also painfully predictable and boring. Add Apple into the equation, however, and you have a storm strong enough to disrupt the entire auto industry. The company is expected to buy into this industry. In the words of the company’s Senior VP Jeff Williams, “The car is the ultimate mobile device, isn’t it?”Volkswagen has grossly overstepped the line at the wrong time. The company has cut corners like others, but in a more clumsy fashion with their “cheating” software. Volkswagen will be victimized by the bureaucrats for its mistake, not because the damage caused by the company is un-reparable, but because it got caught in the perfect storm.