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  • Writer's pictureDel Chatterson

Astonishingly irresponsible and incompetent leadership at VW


All justified in the relentless pursuit of #1 in auto sales.

Volkswagen's emission test cheating is just the most recent example of incompetent, irresponsible leadership pursuing sales at any cost, ignoring the risks.

Apparently it was a brief success for the man responsible for US sales, Martin Winterkorn - he is now CEO of Volkswagen, but he should be expecting to be fired this week. Somehow VW justified promoting "clean diesel" to sell cars and save the planet, while installing a device to cheat during emissions testing before belching pollution on the road - exceeding regulatory requirements by up to 40 times!

I have been preaching for years the theme of  "enlightened entrepreneurship" and the first principle is to avoid the focus on short term profit and recognize that the primary objective of any business is to build sustainable long term value.  (Chasing short-term sales revenue is the first mistake; an early learning experience for most entrepreneurs.)

Enlightened entrepreneurship and building sustainable long-term value requires consideration of the consequences for all stakeholders - owners, employees, customers, suppliers, communities and the planet - and making decisions accordingly.  The concept is clearly not understood or badly neglected by Volkswagen (and GM management that ignored a faulty ignition switch that is considered to have been responsible for 67 or more deaths in their vehicles.)

Modern automobiles are complicated and the challenges are daunting to ensure that safety and regulatory  requirements are met.  But long term value of the company and the brand require exceptional care and attention to customer perceptions of quality and performance.

Recent experience with BMW suggests they are leaning in the right direction. My 2015 BMW435 purchased in April was recently voluntarily recalled with over 2000 other BMWs to be replaced with a new car "out of an abundance of caution and potential concerns about long-term vehicle quality" as they were all stuck in ice and salt water during an ice storm in Halifax.  Not exactly good news, but at least pre-emptive action to avoid the risks rather than shut-up and keep on selling. (It's worth noting that other European manufacturers were also frozen into that outdoor storage area. Have you heard of any other "Halifax ice storm recalls"?)

Unfortunately, it all makes us even more suspicious of sales pitches and marketing claims.  And not just those of car sales people and the auto industry. Whether it's "clean diesel", "fat free", "organic", "ethical", "green", "free trade", or any other appealing theme, I'm a skeptic.  You should be too.

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