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Monday, Jun 24, 2024

NYT Reporter on the VW Scandal & Corporate Culture

<span class="photocreditinline">VAN BARTH/THE MIDDLEBURY CAMPUS</span><br />Jack Ewing discusses Volkswagon's emission scandal.
Jack Ewing discusses Volkswagon's emission scandal.

In September 2015, the Environmental Protection Agency disclosed that the German automaker Volkswagen had installed devices in 11 million cars that cheated emissions testing, permitting their cars to emit hazardous nitrogen oxide. The reporting of Jack Ewing, Germany correspondent for the New York Times, led to Volkswagen paying a more than $20 billion settlement. Ewing’s 2017 book, “Faster, Higher, Farther: The Volkswagen Scandal,” digs deeper into the corporate scandal, tracing it back to the company’s history since the Nazi era and its top-down management culture.

In a lecture on Sept. 25 organized by the college’s Environmental Studies program, Ewing discussed how Volkswagen, a corporation that prides itself in being environmentally conscious, committed massive crime and fraud.

Ewing spoke with The Campus by phone prior to the lecture about his book, lessons to be learned from the scandal and the role of journalists covering the corporate world today. The interview has been lightly edited for clarity.

Yvette Shi (YS): When and how did you start to realize the role played by the company’s corporate culture?

Jack Ewing (JE): I had dealings with Volkswagen off and on for years, and I was already aware that it was a very kind of rigid, authoritarian type of company culture, and I knew who some of the leaders of the company were and sort of how they operated. So I think that was from the very beginning — not obvious — but I immediately had a feeling that the corporate culture certainly played a role.

And then we looked at the way the company responded to the scandal, and how close they were and how long it took them to confront it, to start investigating. And then when I started to develop sources inside the company or people that have worked at Volkswagen. At last, it just became clear pretty quickly that it was the kind of company where you couldn’t admit failure, you couldn’t say no to somebody above you and where there was not a strong moral underpinning or strong moral standard that people believe they are supposed to adhere to.

YS: Do you think that this sort of top-down culture is typical for large corporations?

JE: I think it’s certainly not uncommon. I think it exists to some degree almost in every big corporation. I think Volkswagen was the particularly extreme example, but at the same time I think it’s definitely the case that it’s something that can happen at any company. If you look at other scandals, like Enron, going back that’s been more than a decade, or Wells Fargo Bank in California, you know they were defrauding their clients on a massive scale, you always have this ingredient. The main ingredients are that you have a culture where people don’t feel they have any recourse when they are asked to do something unethical, and where you have top management setting extremely ambitious goals, and making it clear that if you fail, you are going to be fired.

So to that extent, and there’s lots of companies that operate that way, where they are constantly asking more and more employees and if you don’t deliver, your job is in danger. And that’s just an invitation for people to start to commit wrongdoing, because most people, even if they know that they can get caught in two years or five years, they’ll still try to hang on to their jobs for as long as they can.

YS: You talked about having sources inside the company. What was that process like? What were the challenges that you faced?

JE: That’s always difficult with a corporation. It’s particularly difficult with a company like Volkswagen. Volkswagen has over 300,000 employees. The first thing was to figure out the people we should concentrate on. What we did is that we found academic papers, where they have talked about their mission and technology, the engineers who have published papers in journals, and we found some papers that have names of engineers on them. Also we looked at patent registries that list the names of the people who get credit as inventors, and also helpfully their home addresses.

Then we just set about contacting those people. We did the usual thing, trying to call them a couple times, knocking on their doors — that wasn’t successful. I had the most success actually writing letters. So I would write people letters, tell them why I thought it would be in their interest to talk to me. I probably sent at least 50 [letters], and a much smaller number got back to me, but a number of people did get back to me who wanted to talk, and that was sort of the beginning where I was able to then figure out how the whole thing happened, the process with the whole illegal software being developed and then deployed over many years.

YS: What can students interested in entering the corporate world after school learn from the scandal?

JE: I think that you are going to learn a lot from the scandal. If you work in a corporation, there’s tremendous pressure to conform, people will possibly be asked to make moral compromises, and companies do not always help you to know when you are being asked to step over a line. I think that the clear message is that you have to maintain your own sense of what is right and wrong, independent of what your employer might be telling you. And if you feel that that’s being violated, you have to take action, you can’t just go along, you have to have moral courage.

I think that the people that were involved in this, a lot of them, their careers are ruined and in some cases they might go to jail. Also, a lot of them were fairly idealistic. They originally went into emissions technology because they wanted to make cleaner air, and then wound up being part of this fraud. So I think that the message is that you have to have the courage and the strength to stand up when you are being asked to do something like this.

One thing that I still find amazing is that at the very end there were a couple Volkswagen employees who went to the California regulators and said this is what’s really going on that’s wrong. But this is after they hid [the device] in cars for ten years. And the whole time, nobody went to authorities and said that there’s something really big illegal going on. Volkswagen would have been better off if they had. Everybody would have been better off. But nobody did that.

YS: Is there anything else that you would like to add?

JE: I guess the one thing that I always like to try to get across about this book is that some people think it’s a car book, and it’s not. I really tried to write it for people who don’t care about cars, don’t know about cars. My editor John Glusman, before we started working, he said: “Jack, you know, I really don’t care about cars at all.” And he doesn’t even know the difference between an automatic and a manual transmission. So he says: “You’re going to write a book that I’m gonna want to read.” So that’s really what I tried to do.