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EDITORIAL |  FULL ARTICLE 
The unacceptable face of fast-track corporate growth
Peter Schmidt | Editor

Published: Wed, 23rd September 2015 13:46:19 GMT
 

VW Wolfsburg fog September
PHOTO | Mario Gorniok-Lindenstruth

Open quote signVictory at all costs, victory in spite of all terror, victory however long and hard the road may be; for without victory, there is no survival.” No doubt intended as a moral booster for the nation, but of late these thoughts attributable to Winston Churchill, appear as fitting for some of the world’s leading corporations as they were at times of war.

Winning at all costs, it seems, has become a buzzword. 

There is no shortage of disreputable examples. 

And if anything the list is growing faster and longer. 

On the one hand, driven by greed and profit maximisation, some of the world’s financial institutions and their agents are willing to take shortcuts to riches. 

To merely scratch the surface: America’s infamous subprime lending en-masse, mis-selling of unsuitable financial products to the world at large, crowned of late by both Libor and foreign currency manipulations. 

Moreover, there’s also blatant misbehaviour on bribery and corporate tax evasion by multinationals. 

Countries are no exceptions. 

Greece, we now know, gained membership into the now discredited eurozone by false accounting. 

Likewise, in the world of high level sport, the desire to win will often brush aside the dangers of getting caught in the act of doping. 

In all walks of life it seems, winning at all costs appears to have become the norm. 

The motor industry is no exception. In a world of razor-sharp competition, where profit maximisation and maximum scale is seen as a prerequisite for long term survival, some desperate carmakers have thrown caution and business ethics to the wind. 

In consequence, we have seen a dizzying round of ill-thought-through mergers. 

Part of a fanciful fast-track growth plan, it often looked as though logic had given way to the opportunistic impulse to nab partners while they were available. 

With fingers badly burned by ‘mergeritis’, perhaps best illustrated by the ill-fated Daimler-Chrysler venture, some carmakers were more determined than ever to drive for critical mass. 

Unbridled fast growth came at a price. 

Toyota for one publically recognised and paid the high price for the massive media stir caused by the alleged unintended acceleration of some Toyota and Lexus models. 

Toyota, in consequence sat back and put its previously highly charged global expansion plans on ice. 

Good. 

Korea’s Hyundai-Kia, yet another highly ambitions carmaker, also got into hot water in the US by overstating the fuel economy on some cars. 

Likewise, GM desperately trying to stay at the top is getting whacked by the toxic fallout from the bungled recall for a faulty car ignition switch. 

Finally conceding that there was a serious safety problem, GM's CEO Mary Barra was quoted as saying “I wish I could turn back the clock”

Today, that sentiment chimes like a bell through Volkswagen’s ivory towers. 

But aside from science-fiction, perhaps, in the real world there is no way of turning back the clock. 

Naturally, TV coverage of a humiliating apology from the CEO of a wrongdoing corporate giant will at least convey to the world at large that a major misdemeanour was committed and that a genuine apology is forthcoming for the trouble the group had caused. 

However, no two ways about it, by knowingly and wilfully cheating with legal emission limits is clearly not in the league of minor corporate misbehaviour. 

Some chief executives and lesser accomplices ended up in jail for lesser offences. 

Few doubts, Volkswagen, apart from the damage done to its image, will be hit by the full weight of the law. 

Nevertheless, coming in the wake of countless scandals in today’s shady corporate world, caused principally by corporate greed, one wonders whether crucial lessons will finally be learned and whether others, with their wrongdoings still undetected , will be willing to change course. 

I fear not
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