Tuesday, June 20, 2017

Jack Ewing's "Faster, Higher, Farther"

Jack Ewing is European economics correspondent for The New York Times and author of Faster, Higher, Farther: The Volkswagen Scandal. He lives in Frankfurt.

Ewing applied the “Page 99 Test” to Faster, Higher, Farther and reported the following:
Bad luck! Page 99 in Faster, Higher, Farther: The Volkswagen Scandal is the end of a chapter and about one-third white space. Nevertheless, the page is not a bad place to judge the book. It marks a turning point in the story, which can be summed up as follows: how a company that began as a Nazi propaganda project became the largest car company in the world--only to be exposed as emissions cheaters by a handful of university researchers working with a $70,000 grant.

The chapter that ends on Page 99 describes the last days of Ferdinand Piëch’s reign as chief executive of Volkswagen. Piëch, grandson of legendary car designer Ferdinand Porsche, has just driven an experimental “one-liter auto”—so-called because it could travel 100 kilometers, or about 60 miles, on a single liter of diesel fuel—to the Volkswagen annual meeting in Hamburg. There Piëch received a standing ovation from shareholders grateful that he saved Volkswagen from near bankruptcy and made it the largest car company in Europe.

But, as I argue in the book, Piëch had already created a climate where the emissions scandal could breed. A brilliant engineer, he was also an authoritarian known for dismissing or exiling subordinates who failed to meet the ambitious goals he set for them. And Piëch was not really giving up power. He continued to dominate Volkswagen from his position as chairman of the company’s supervisory board. Piëch’s hand-picked successor, Bernd Pischetsrieder, quickly fell out of favor when he tried to remake Volkswagen’s corporate culture to be less dictatorial. Pischetsrieder was replaced by Martin Winterkorn, a long-term Piëch protégé known for his unwavering loyalty to his mentor.

Under Piëch and Winterkorn, failure was not an option. When Volkswagen engineers realized in 2006 that a new diesel engine could not meet pollution standards in the United States, they devised emissions-cloaking software to fool regulators. When the deception was discovered almost a decade later, Volkswagen was forced to pay more than $22 billion in fines and legal settlements in the United States.

Page 99 hints at the main themes of the book—how the ambition and ruthlessness of top managers can turn ordinary employees into criminals, and ultimately endanger the jobs of thousands of innocent employees.
Follow Jack Ewing on Twitter and Facebook, and read more about Faster, Higher, Farther at the W.W. Norton website.

--Marshal Zeringue