Volkswagen Scandal Tests Auto-Loving Germany VW’S Emissions Scandal Stirs Criticism That Regulators Have Given the Auto Industry a Free Ride by RUTH BENDER Sept
Total Page：16
File Type：pdf, Size：1020Kb
Volkswagen Scandal Tests Auto-Loving Germany VW’s emissions scandal stirs criticism that regulators have given the auto industry a free ride By RUTH BENDER Sept. 25, 2015 The Wall Street Journal BERLIN—Warnings that diesel cars were generating more pollution than allowed—and that emissions tests were less than adequate—had been voiced long before the Volkswagen AG scandal blew up last weekend. Angela Merkel with Volkswagen’s Martin Winterkorn in 2008. PHOTO: FABIAN BIMMER/ASSOCIATED PRESS But in car-loving Germany, few had an incentive to take a closer look. In a country where one in seven people earn their living, directly or indirectly, from auto making, no other industry is more central to the economy or closer to the government. But as the Volkswagen emissions scandal reverberates around the globe, threatening to taint Germany’s most famous export, critics of the government say the time has come for Berlin to take a more skeptical attitude toward the country’s car makers. “What is being revealed now in this affair is also a failure of politics. The government hasn’t been able to regulate the auto industry, they can no longer hide this,” said Frank Decker, a political scientist at the University of Bonn. “Germany won’t be able to push the brake anymore when there are negotiations in Brussels,” said Mr. Decker, alluding to longstanding efforts by European Union members to curb harmful car emissions. It was German Chancellor Angela Merkel herself who delivered the most striking example of how the German government can go out of its way to defend the interests of the auto industry. In 2013, she personally intervened to block tougher EU restrictions on carbon-dioxide emissions that would have hit powerful German cars harder than less-polluting vehicles made elsewhere in Europe. Compared with the U.S., German corporations play a relatively small role in political financing. But as Wall Street is often viewed by Germans as having too much influence on U.S. politics, so the Volkswagen scandal serves as a reminder of the many revolving doors between Germany’s car makers and the corridors of government power. Matthias Wissmann, a former lawmaker and transport minister, runs the country’s powerful VDA auto-industry lobbying group. He is also a major proponent of a Europe-U.S. free-trade pact. Thomas Steg was a deputy government spokesman before stepping down in 2009; just few years later he joined Volkswagen as head of external and government relations, reporting directly to CEO Martin Winterkorn, who resigned Wednesday over the scandal. In the case of Volkswagen, the interconnection with government is even formalized. The state of lower Saxony, in which Volkswagen is based, owns a 20% stake in the company, giving it two supervisory board seats. And under the 1960 “VW law” that regulated the privatization of Volkswagen, the state retained special rights to block an unfriendly takeover; it still can’t be outvoted even after the law was revised in 2008 following pressure from Brussels. Many high-ranking politicians with tight links to Volkswagen have emerged from lower Saxony, including former Chancellor Gerhard Schröder. As state premier, he sat on the board of Volkswagen in the 1990s, and was later dubbed the “Autokanzler” for his pro-car policies. Sigmar Gabriel, state premier and Volkswagen board member between 1999 and 2003, is now economics minister and Ms. Merkel’s vice-chancellor. “Volkswagen is a great piece of Germany,” Ms. Merkel told Volkswagen employees in 2008, when she visited the company’s headquarters in Wolfsburg. “The relationship is so strong that car makers often turn directly to the chancellery or the chancellor in person,” said Hans-Martin Tillack, a German investigative reporter and author of “The Lobby Republic,” a book exploring the links between industry and politics. Ms. Merkel on Tuesday called for “full transparency” to rapidly clarify the Volkswagen scandal. Green and left-leaning opposition leaders and environmental groups argued this past week that the government is partially responsible for the scandal that is rocking Germany’s largest company because of regulators’ coziness with the car lobby. “In a sort of companionship with the auto industry, warnings were ignored,” said Oliver Krischer, deputy floor leader of the Greens. Environmental group Deutsche Umwelthilfe lamented that the government wasn’t more vigilant about diesel-engine emissions of toxic nitrogen-oxides, especially for an administration that has made clean energy and the phasing out of nuclear power top priorities. Dorothee Saar, who heads up the group’s transport and air-control unit, said it “was no secret” that there were significant discrepancies between emissions recorded in laboratory tests and under real-driving conditions. “That is where someone should have looked,” she said. The Transport Ministry this week launched an investigation into the affair to determine which cars were suspect and pledged to deliver consequences. Transport Minister Alexander Dobrindt also hit back at critics. “The manipulations are inadmissible and illegal,” he told lawmakers Friday, saying the government had been campaigning for tougher emissions-testing standards. Thomas Viesehohn from Ms. Merkel’s Christian Social Union warned against discrediting an entire industry. Mr. Dobrindt and politicians from the center-right ruling coalition also urged critics to show restraint. Arno Klare, a lawmaker from the Social Democrats, said the current crisis could also turn into an opportunity. “We have the best cars and we now need to make sure they are emission-clean,” he said after a heated exchange in Parliament. .