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BUSINESS A25
Monday 26 October 2015
Corporate Culture:
Is Volkswagen so complicated only insiders can fix it?
DAVID McHUGH from 1993 to 2002 and only Employees work at the assembly line for the Golf VII at the VW plant in Wolfsburg, Germany
AP Business Writer left the board chairman- Wednesday Oct. 21, 2015.
WOLFSBURG, Germany ship in April.
(AP) — Volkswagen’s effort And the local government ( Julian Stratenschulte/Pool Photo via AP)
to fix its emissions scandal and unions hold a lot of
will be largely led by com- power, too. opaque and hierarchical. dal broke out. petitor Daimler, a former
pany insiders. Some ex- Lower Saxony, the Ger- Employee representative Toepfer acknowledged top judge, to oversee legal
perts say it’s the only way, many state where Volk- Bernd Osterloh lamented that the inside-outside compliance.
given the German car- swagen’s Wolfsburg head- last month the need for “a question has two sides: Volkswagen also sought le-
maker’s unusually compli- quarters is located, holds culture in which it’s possible “Before it’s known who was gal clarification about Po-
cated structure and power a 20 percent voting stake, and permissible to argue involved and how, there’s etsch’s move to become
groups. giving it the legal right to with your superior about the danger that those put chairman, said Hans-Gerde
Others, however, argue block plant closures. the best way to go.” in charge of clarifying mat- Bode, the company’s di-
the company is just com- Employee representatives Some question whether ters were involved them- rector of communications.
pounding its risks if it does by law hold half of the pressure to meet Volkswa- selves.” “Knowing that these ques-
not bring an outsider to board seats, and can also gen’s target of passing Volkswagen has made tions would come up, we
change its ways. veto important decisions. Toyota as the world’s larg- some effort to reach out- obtained a legal opin-
Volkswagen has named a Dirk Toepfer, a member of est car maker led people side, hiring U.S. law firm ion ahead of time, which
new CEO and chairman the parliament of Lower to cut corners. Jones Day to find out who made this change possible
since the scandal became Saxony, presents a com- Volkswagen achieved that knew and did what in the to undertake, because we
known Sept. 18. Both are monly heard argument goal in the first half of this scandal. It has also brought knew, yes, that will lead to
longtime employees. in Germany: that the pe- year, just before the scan- in an executive from com- multi-sided discussion.”q
The effort to find the guilty culiarities of Volkswagen
and prevent a recurrence mean company veterans
is in the hands of new CEO are best positioned to lead
Matthias Mueller, who has the clean-up.
been with the group for “Volkswagen is a differ-
almost three decades. ent world,” says Toepfer.
Mueller, who previously led “That means this enterprise
Volkswagen’s highly profit- functions under different
able Porsche brand, took rules than other enterpris-
over when Martin Winter- es. That’s why they need
korn resigned. someone that knows the
The new board chairman, structure.”
Hans Dieter Poetsch, had “Someone who comes
been chief financial offi- completely from the out-
cer since 2003. There’s no side and doesn’t know
indication he knew about how the rules of the game
the decision to cheat on go will fail at the cleanup.”
the U.S. diesel emissions The management un-
tests with software installed der Winterkorn also has
in engines. But he was a been criticized as overly
member of the top man-
agement team in place US factory output drops in sign of weak growth
when the cheating took
place, a group of execu- C. S. RUGABER up in the spring by cutting less attractive, in other two months. That’s left
tives that hasn’t yet been AP Economics Writer back on orders for new countries. many businesses with ware-
formally cleared of involve- WASHINGTON (AP) — U.S. goods. Overall industrial produc- houses full of unsold goods.
ment. manufacturing production Overall industrial produc- tion has increased just 0.4 With such large inventories
Mueller has promised fell for the second straight tion, which includes mining percent in the past year, its they see little need to order
a new, more open ap- month in September as and utilities, fell 0.2 percent, weakest showing since the new products.
proach. factories cranked out few- also its second straight Great Recession. Big overseas economies
The question is, will Volk- er appliances, computers, decline. Mining output “In 2015 it has been one are grappling with slower or
swagen identify the guilty and electronics. plunged 2 percent as en- thing after another ham- nonexistent growth, includ-
— but miss the chance to Factory output declined ergy companies sharply mering manufacturing in ing China, Canada, Eu-
change the culture that 0.1 percent, the Federal reduced oil and gas drill- almost everything except rope, and Brazil. Canada,
enabled the scandal in the Reserve said this weekend, ing. Utility output rose 1.3 motor vehicles,” Michael the United States’ largest
first place? following a drop of 0.4 per- percent. Montgomery, an econo- trading partner, is in reces-
Volkswagen can be a cent in August. Manufac- Factories have had a tough mist at HIS Global Insight. sion.
complicated place to fig- turers also cut back on pro- year and there is little sign Auto sales jumped nearly China and Brazil had been
ure out. duction of steel and other of improvement any time 16 percent in September critical sources of demand
The billionaire members metals. soon. A strong U.S. dollar from a year earlier and are for American-made indus-
of the Piech and Porsche The decline suggests that and weak overseas growth at the highest level in a de- trial machinery, such as
families collectively con- a strong dollar, weak over- have hammered U.S. ex- cade. That has boosted mining trucks, construction
trol a majority of the voting seas economies, and cau- ports. The dollar has risen auto production, which 0.2 equipment, and agricul-
rights through their holding tious U.S. consumers are about 13 percent in value percent last month. tural machines. Their eco-
company, Porsche Auto- holding back factory out- against other currencies in But outside of cars, Ameri- nomic slowdowns have hit
mobil Holding SE. put. Many companies are the past 12 months. That cans are spending cau- sales and profits for com-
They include Ferdinand also focused on reducing makes U.S. products more tiously. Retail sales have panies such as Caterpillar
Piech, who served as CEO stockpiles that were built expensive, and therefore barely grown in the past and United Technologies.q
