What was Volkswagen thinking?

Analyzing an audacious fraud

Das Auto gets das boot.
(Image credit: Sean Gallup/Getty Images)

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Volkswagen's scheme to cheat on emissions tests is "shaping up as one of the great corporate scandals of the age," said Danny Hakim, Aaron Kessler, and Jack Ewing at The New York Times. The German automaker has admitted it installed sophisticated software in millions of diesel vehicles that allowed the cars to spew far more pollutants than regulations allowed; it now faces billions of dollars in fines, lawsuits from governments and consumers around the world, and a criminal investigation into ex-CEO Martin Winterkorn and other VW executives by German prosecutors. What led Volkswagen down this dark path? "Unbridled ambition." For years, VW has been on a mission to overtake Toyota as the world's largest automaker. Part of this strategy involved a big bet on diesel-powered cars, which VW pitched with a promise of "high mileage and low emissions without sacrificing performance" — a crucial selling point in winning over American drivers, who favor big, powerful cars. VW's insular corporate culture and "clannish board" also deserve their fair share of blame, said James Stewart, also at the Times. The company has for years been dominated by the Porsche and Piëch families, who rarely allow outside views to penetrate. Their often dysfunctional governance, plus "a deep-rooted hostility to environmental regulations" among the company's engineers, made a cheating scandal "all but inevitable."

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