Wednesday, September 30, 2015

Dieselgate

VW has been in the news for building in cheat software into their EA189 2.0 litre diesel engines to switch to emissions control modes only when the vehicle was in testing and to switch to NOX spewing mode in normal driving. This is not an oversight, but a clear intent to beat the law. What causes otherwise reputable companies to conspire in such ways?

I am going to go back to my favourite hypothesis. The beginning of the end is signalled when top management sets targets of growth in terms of size rather than profitability. The day VW management started to pander to top management megalomania to be bigger than Toyota, the pressure to sell more cars transformed people from Dr. Jekyll to Mr. Hyde.

A certain liquor baron started splurging money a few years ago with the objective of becoming the biggest player in the aviation industry; not the most profitable, but the biggest. We know how that story is fast becoming a riches-to-rags story.


No comments: