Faster Higher Further tells the story of the growth of Volkswagen and its exposure for installing defeat devices to promote ‘clean diesel’ defrauding consumers and leading to one of the largest ever corporate ethical scandals.
Faster Higher Further Summary
Faster Higher Further is a textbook case for corporate governance and ethics.
Tracing the origins of Volkswagen from World War II to its renaissance as a reliable, platform-strategy automotive engineering powerhouse, the book exposes the corporate culture and unique pressures that led it to install defeat devices to trick regulators into believing that ‘clean diesel’ technology produced legal limits of less nitrogen oxide emissions when in reality it was some 10 to 40 times higher.
Below are some of the key insights from the book.
Key Insights
- Volkswagen began life as a Nazi propaganda exercise to rival Henry Ford’s model T but produced fewer than 1,000 cars during World War II.
- German workers paid installments for the design of the original Beetle and slave labour manufacturers created tanks and munitions instead.
- Despite this, the Porsche family held onto the design patent and maintained control over Volkswagen when it was rehabilitated by the British occupying forces.
- As a result of its history, Volkswagen is 20% owned by the workforce creating a systemic dynamic where constant export-led growth is an imperative to maintain wages and positions for employees.
- Ferdinand Piech rose through the ranks at Audi and Volkswagen by winning the support of the workers and setting ambitious stretch targets to become the world’s largest carmaker by 2018.
- By force of personality and it’s ownership structure Volkswagen has always been headquarters focussed, resistant to outside influence and secretive.
- To fuel his ambition, Piech demonstrated ruthlessness including stealing teams of people and detailed industrial data from General Motors in the 1990s.
- To raise margins, Piech aspired to bring Volkswagen upmarket by buying Bugatti, Lamborghini, Ducati and Bentley alongside Skoda, Audi, SEAT and others.
- The core of Volkswagen’s strategy was then to use a platform model to drive down component costs across each and every model which worked extremely well.
- As Volkswagen was outmaneuvered by Toyota Hybrid technology, they attempted to sell their industry leading clean Diesel technology into the US market as an alternative.
- However, margin targets put pressure on the design team to install cheat devices into their low cost Volkswagen models rather than pay for effective NOx capture devices used by General Motors, BMW and others.
- This decision was taken in 2007 but took almost a decade to be revealed by California’s rigourous environmental regulator, at a time when Diesel sales in the USA and a 25% market share in Europe had propelled Volkswagen to the largest automotive company in the world.
- Discovered in mid-2015, the immediate fallout was a 20% drop in Volkswagen share price compounded by multi-billion legal claims from owners, dealers and national regulators.
- In the aftermath of the scandal, the company continued to survive and is now moving into all-electric cars, fueled by research and development and the growing consumer demand for affordable electric cars.
- It remains to be seen whether Volkswagen will fully recover to reach the heights of the world’s largest carmaker again or whether the brand will be irrevocably tainted by its association with the clean Diesel scandal.