Go Lean…Caribbean

Go Lean Commentary

“To whomever much is given, of him will much be required” – The Bible @ Luke 12:48 (World English Bible)

The burden on automobiles is to do more than just transport a rider from Point A to Point B. There are also environmental concerns; and safety concerns. We expect a lot from automakers.

In turn, automakers expect a lot from their parts suppliers.

There is a huge burden on one auto parts manufacturer Takata; they dominate the market on auto parts intended for rider safety: seatbelts and air-bags; (they hold 20 percent for the air-bags market). They have quite a responsibility to keep us safe, and at times they have failed in that delivery. They have committed some “Wrongs”, and thus give the watching world an important lesson on how to “Right a Wrong”.

In the case of a car crash, an air-bag can really save a person’s life. This is good!

In the case of a faulty air-bag, it can take a life, in the case of an accident, or none. (Imagine a situation normal and an air-bag deploys-explodes and impacts a child … or a small frame adult). Thus the tragedy! While faulty seatbelts are only an issue in an accident, faulty air-bags could be an issue anytime.

Notice the experiences in this Reference article here:

Reference Title: Takata Corporation
Takata Corporation is an automotive parts company based in Japan. The company has production facilities on four continents, with its European headquarters located in Germany, where it also has nine production facilities.^[3] In 2013, A series of deaths and injuries associated with defective Takata airbag inflators had led Takata to initially recall 3.6 million cars equipped with such airbags. Further fatalities caused by the airbags have led the National Highway Traffic Safety Administration (NHTSA) to order an ongoing, nationwide recall of more than 42 million cars, the largest automotive recall in U.S. history.^[4][a]

History
Takata was founded in 1933 in Shiga Prefecture, Japan, by Takezo Takada and started to produce lifelines for parachutes, and other textiles. In the early 1950s, the company started to research seat belts. Later they incorporated as “Takata”. In the 1960s, Takata started to sell seat-belts and built the world’s first crash test plant for testing seat-belts under real world conditions.

In the 1970s, Takata developed child restraint systems. In the 1980s, the company changed its name to “Takata Corporation” and expanded to Korea, the United States, and later to Ireland, to sell seat-belts. In the 1990s, Takata expanded internationally.

In 2000, Takata Corporation acquired German competitor Petri AG, forming the European subsidiary Takata-Petri, renamed Takata AG in early 2012.^[5] Takata AG makes steering wheels and plastic parts, not only for the automotive industry.

1995 seat belt recall
In May 1995, a recall in the U.S. affecting 8,428,402 predominantly Japanese built vehicles made from 1986 to 1991 with seat belts manufactured by the Takata Corporation of Japan, was begun. It was called at the time the “second largest recall in the 30 year history of the Department of Transportation (DOT)”. The recall was prompted by an investigation (PE94-052) carried out by the National Highway Traffic Safety Administration (NHTSA) on Takata-equipped Honda vehicles, after many of their owners complained of seat belt buckles either failing to latch, latching and releasing automatically, or releasing in accidents. It revealed that potentially faulty Takata seat belts were not limited only to Honda vehicles, but to other Japanese imports as well…. NHTSA concluded that the cause of the defect was that the buckles were made of ABS plastic. Through exposure to ultraviolet light over a period of time, the plastic became brittle and pieces fell off, causing a jamming of the release button mechanism.

The manufacturers involved agreed to a voluntary recall, though this did not go smoothly, with only 18% of the 8.9 million cars and trucks with the Takata belt buckle having been repaired two years after the recall had begun. In addition, NHTSA assessed a $50,000 civil penalty against both Honda and Takata for failing to notify the agency about the seat belt defect in a timely manner.

Defective airbag recalls (2013–present)

Takata began making airbags in 1988 and, as of 2014, holds 20 percent of the market. During 2013, several automakers began large recalls of vehicles due to Takata-made airbags. Reports state that the problems may have begun a decade before.^[7]

Honda stated they knew of more than 100 injuries and eight deaths (seven in the United States plus one in Malaysia) that were related to Takata airbags.^{[7][8][9][10]}

In April and May 2013, a total of 3.6 million cars were recalled due to defective Takata airbags.^[7] All of those airbags were made at, or otherwise used inflator units manufactured by, Takata’s Monclova Plant^[11] in Coahuila, Mexico, operated by Takata’s North American/Mexican subsidiary, TK Holdings Inc.^[12] In November 2014, BMW announced they will move any orders from the Mexican plant to a Takata plant in Germany.^[13]

In June 2014, Takata admitted their Mexican subsidiary had mishandled the manufacture of explosive propellants and improperly stored chemicals used in airbags. Identifying vehicles with defective airbags was made more difficult by the failure of TK Holdings Inc. to keep proper quality control records. That prompted another round of recalls in June 2013.^[7]

In their statement the company said, “We take this situation seriously, will strengthen our quality control and make a concerted effort to prevent a recurrence”.^[7]

On June 23, 2014, auto manufacturers BMW, Chrysler, Ford, Honda, Mazda, Nissan, and Toyota announced they were recalling over three million vehicles worldwide due to Takata Corporation-made airbags. The reason was that they could rupture and send flying debris inside the vehicle. This was in response to a National Highway Traffic Safety Administration (NHTSA) investigation that was initiated after the NHTSA received three injury complaints.^[7]

In a statement on June 23, 2014, Takata said they thought excessive moisture was the cause of the defect. Haruo Otani, an official at the vehicle recall section of the Japanese Ministry of Land, Infrastructure, Transport and Tourism, said that moisture and humidity could be seeping inside inflators, destabilizing the volatile propellant inside.^[7]

In July 2014, a pregnant Malaysian woman was killed in a collision involving her 2003 Honda “City” which contained the defective airbag. The woman, aged 42, died when a metal fragment from a ruptured driver’s airbag sliced into her neck in the accident in which she was driving at around 30 km/h when another vehicle hit her at a junction, according to a lawsuit filed by her father at a Miami federal court. Her daughter, delivered after the mother’s death, died three days later.^[14][15]

On November 18, 2014, the NHTSA ordered Takata to initiate a nationwide airbag recall. The action came as 10 automakers in the U.S. recalled hundreds of thousands of cars equipped with potentially faulty air bags manufactured by Takata.^[16]

As of May 19, 2015, Takata is now responsible for the largest auto recall in history. Takata has already recalled 40 million vehicles across 12 vehicle brands for “Airbags that could explode and potentially send shrapnel into the face and body of both the driver and front seat passenger”.^[17] This recall will bring the number up to about 53 million automobiles eligible for this recall. In November 2015, Takata was fined $200 million ($70 million paid upfront) by U.S. federal regulators in response to Takata admittance of a default.^[18] Toyota, Mazda and Honda have said that they will not use ammonium nitrate-based inflators.^[19][20]

On May 4, 2016, the NHTSA announced recall campaigns of an additional estimated 35-40 million inflators, adding to the already 28.8 million inflators previously recalled.^[21]

On Aug 22, 2016, a truck transporting Takata airbag parts was involved in a crash in Quemado, Texas that caused the cargo to explode, destroying a house and killing a woman inside.^[22]

On Jan 13, 2017, the United States charged three Takata executives, Shinichi Tanaka, Hideo Nakajima and Tsueno Chikaraishi for Takata’s exploding airbags.^[23]The company agreed to plead guilty and to pay $1 billion to resolve the investigation, which includes a $25 million fine, $125 million for victim compensation and $850 million to compensate automobile manufacturers. At least 16 deaths are linked to the defective airbags.^[24]

Cars affected
The NHTSA received notification from BMW, Chrysler, Ford, Honda, Mazda, Nissan, and Toyota that they were conducting limited regional recalls to address a possible safety defect involving Takata brand air bag inflators.^[25]

In May 2014, General Motors expanded their earlier recall of their 2012 Chevrolet Cruze sedan and other models because of an electrical problem with the Takata airbags. The recall also included the Buick Verano, the Chevrolet Sonic and the Chevrolet Camaro.^[26]

On June 25, 2014, General Motors told their North American dealers to stop selling their 2013 and 2014 model Chevrolet Cruze sedans. GM stated, “Certain vehicles may be equipped with a suspect driver’s air bag inflator module that may have been assembled with an incorrect part.” The airbags involved were made by Takata Corporation.^[26] On June 11, 2014, Toyota recalled 2.3 million vehicles, many for the second time.^[7]

On July 17, 2015, Ferrari issued a recall for their lineup from the 2014-15 model years due to the driver’s side airbags being improperly installed and the leather covering them improperly glued.^[27] This was discovered when the company was conducting tests on a 458 Italia and the airbags would deploy at a rotated orientation, potentially causing injuries.^[28] This recall isn’t related to the explosive airbags that have caused injuries and fatalities when deployed.

The issue itself has only shown to affect vehicles in hot and humid locations, however all potentially affected vehicles have been recalled as a precaution. No evidence of the issue has been seen in the UK and Europe. Nearly all reported injuries (both fatal and minor) had been recorded in Honda vehicles, something which is undergoing investigation. But Ford added certain models to the list after the 10th death occurred when the airbag in a 2006 Ford Ranger pickup driven by a Georgia man ruptured violently in South Carolina, in late December of 2015. ^[29]

As of December 9, 2016, car manufacturers affected by this recall include Acura, Audi, BMW, Cadillac, Chevrolet, Chrysler, Daimler Trucks North America, Daimler Vans USA LLC, Dodge/Ram, Ferrari, Fisker, Ford, GMC, Honda, Infiniti, Jaguar, Jeep, Land Rover, Lexus, Lincoln, Mazda, McLaren, Mercedes-Benz, Mercury, Mitsubishi, Nissan, Pontiac, Saab, Saturn, Scion, Subaru, Tesla, Toyota, and Volkswagen.^[30]

Source: Retrieved May 8, 2017 from: https://en.wikipedia.org/wiki/Takata_Corporation

———–

VIDEO – Takata to plead guilty, fined $1 Billion penalty over air-bag scandal – http://wapo.st/2jfvNP3?tid=ss_mail

Published January 13, 2017 – Japan’s Takata agreed to plead guilty to criminal wrongdoing and pay $1 billion to resolve a Justice Department investigation into ruptures of its air-bag inflaters linked to deaths worldwide. (Reuters).

As related in the foregoing, Takata has mostly been responsive to all safety concerns:

In their statement the company said, “We take this situation seriously, will strengthen our quality control and make a concerted effort to prevent a recurrence”.

(This is refreshingly honest, after some period of hiding the truth).

Many of their problems were tied to environmental differences (temperature, humidity, altitude pressure, etc.). An important lesson we, the observers and reporters, learned is their eventual willingness to own up to the problem and work towards remediation. This is a familiar concern for the movement behind the book Go Lean…Caribbean. There are a lot of issues that have been successfully dealt with by stakeholders, but only after first accepting-acknowledging the fault-defect, then dealing with the fall-out.

But despite Takata’s “Mea Culpa”, people are dead – at least 16 deaths are linked to the defective air-bags ^[24] – so someone has to be held to account. For this reason, the judgments and fines in the foregoing are appropriate.

Takata may have a long road of recovery, but they now have shown the right community ethos – the fundamental character or spirit of a culture that informs their beliefs and practices – to reform and transform their company.

This commentary is 4 of 4 in a series considering how to “Right a Wrong”. Surely, a mal-functioning air-bag is a “Wrong”. This type of “Wrong” affects life-and-limb of car riders. We have our own car riders to protect in our region, so we need to also tune in to these developments and lessons; we need to glean from the “Righting of these Wrongs”. The full entries of all the blog-commentaries in this series is as follows:

1. Righting a Wrong: 2008 Housing Crisis
2. Righting a Wrong: Puerto Rico’s Bankruptcy
3. Righting a Wrong: Volkswagen Emissions Crisis
4. Righting a Wrong: Takata Air-Bags

As related in the first submission in this series, these “Wrongs” relate to bad actions and inaction by different actors. The image and reputations of Takata “took a hit” since 2015. But “Righting this Wrong” can override the bad image and the “comeback” or recovery could be their lasting legacy.

In the Caribbean, we have a different climate than many of the First World countries in this Takata drama. Who would test-certify safety conditions for air-bags in our region?

Lives are involved!

Had the CU been in force when this Takata air-bags manufacturing defects issue emerged, the CU’s technocratic deliveries would have really made a difference … on protecting the people of the Caribbean.

The book Go Lean…Caribbean presents a plan to elevate the Caribbean societal eco-systems; it also addresses the eco-system of the transportation safety and motor vehicles in the Caribbean region. The book details this on Page 205. Consider some of the headlines here:

10 Ways to Improve Transportation – Page 205

# 6: Transportation (Aviation, Shipping & Automobiles) Coordination, Promotion and Safety Regulations
The CU mandate is to facilitate the region’s economics through transportation solutions. Aviation plays a key role, and so there is the need for regional coordination and promotion of the region’s domestic and foreign air carriers. The CU will execute these functions along with Air Traffic Control and Safety regulations, thus mirroring both the FAA & National Transportation Safety Board (NTSB) in the US. The CU will be vested with subpoena and prosecutorial powers.

Image the impact on lives, having a local entity to test-certify transportation delivery entities in our region. This is a bigger issue than just cars, this is about life-and-death.

This is the purpose of the book Go Lean…Caribbean, to help reform and transform the societal engines in the 30 member-states of the Caribbean region. The book serves as a roadmap for the introduction and implementation of the Caribbean Union Trade Federation (CU). The Go Lean/CU roadmap applies best-practices to protect the community and features these 3 prime directives, proclaimed as follows:

• Optimization of the economic engines to grow the regional economy to $800 Billion – including developing an automotive industry in the region.
• Establishment of a security apparatus to protect public safety and ensure the economic engines of the region.
• Improvement of Caribbean governance – including a separation-of-powers between CU federal agencies and member-state governments – to support these engines.

The points of effective, technocratic stewardship for protecting the public (from industrial and natural threats) have been elaborated upon in previous blog-commentaries. Consider this sample:

Overall, the Go Lean book stresses the community ethos, strategies, tactics, implementations and advocacies to reform and transform the economic, security and governing engines of Caribbean society. This effort will be technocratic! It will “plan do and review”. We must properly administer the testing and certifying of automobile safety features. This vision was anticipated from the beginning of the Go Lean book, opening with these pronouncements in the Declaration of Interdependence (Page 12 – 14):

x. Whereas we are surrounded and allied to nations of larger proportions in land mass, populations, and treasuries, elements in their societies may have ill-intent in their pursuits, at the expense of the safety and security of our citizens. We must therefore appoint “new guards” to ensure our public safety and threats against our society, both domestic and foreign. The Federation must employ the latest advances and best practices … to assuage continuous threats against public safety.

xi. Whereas all men are entitled to the benefits of good governance in a free society, “new guards” must be enacted to dissuade the emergence of incompetence, corruption, nepotism and cronyism at the peril of the people’s best interest.  The Federation must guarantee the executions of a social contract between government and the governed.

xii. Whereas the legacy in recent times in individual states may be that of ineffectual governance with no redress to higher authority, the accedence of this Federation will ensure accountability and escalation of the human and civil rights of the people for good governance, justice assurances, due process and the rule of law. As such, any threats of a “failed state” status for any member state must enact emergency measures on behalf of the Federation to protect the human, civil and property rights of the citizens, residents, allies, trading partners, and visitors of the affected member state and the Federation as a whole.

xvi. Whereas security of our homeland is inextricably linked to prosperity of the homeland, the economic and security interest of the region needs to be aligned under the same governance. Since economic crimes, including piracy and other forms of terrorism, can imperil the functioning of the wheels of commerce for all the citizenry, the accedence of this Federation must equip the security apparatus with the tools and techniques for predictive and proactive interdictions.

xxxiii. Whereas lessons can be learned and applied from the study of the recent history of other societies, the Federation must formalize statutes and organizational dimensions to avoid the pitfalls of communities like East Germany, Detroit, Indian (Native American) Reservations, Egypt and the previous West Indies Federation. On the other hand, the Federation must also implement the good examples learned from developments/communities like New York City, Germany, Japan, Canada, the old American West and tenants of the US Constitution.

The Go Lean roadmap presents the CU as the “new guard” to monitor, mitigate and manage threats and risks for cars-and-drivers in our Caribbean region.

Though there is a plan to develop an automotive industry here in the Caribbean homeland, there is a need to protect people in their cars whether the cars are locally produced or imported.

Since the Go Lean roadmap specifies a separation-of-powers between federal agencies and member-state governments, the CU applicable entity (Department of Transportation) would deploy a Caribbean version of the US’s National Highway Traffic Safety Administration (NHTSA) entity in the foregoing news reports.

As previously identified, this is a Big Deal for this Caribbean elevation plan. But this Big Deal is conceivable, believable and achievable.

The purpose of this commentary is to learn from other people, companies and communities that have had to “Right Wrongs”. We want to learn those lessons and apply them in our homeland, so that we can be a safer society. Transportation Safety policy must be affected – lives are involved – our Caribbean administration needs to be better at protecting our citizens.

Now is the time for all stakeholders – governments, residents and car riders – in the Caribbean to lean-in for the empowerments described here-in so as to have a regional automotive safety administration. We must do better than previous generations in monitoring for safety defects. This will make our Caribbean a better-safer place to live, work and play. 🙂

This is the end of this 4-part series on “Righting Wrongs”; we have established that the Caribbean is known for its own defects – we repeatedly make mistakes, we endanger people, oppress them and suppress their rights. We need to “Right our own Wrongs”. There have been so much wisdom for us to glean by considering how others have had to contend with their own “Wrongs”. Just consider the lessons from this recap here of these 4 scenarios and the excessive loss-penalties that resulted:

• 2008 Housing Crisis – The stock market plunged 40%, wiping out tens of trillions of dollars in wealth; (some estimates tallying $11 Trillion).
• Puerto Rico’s Bankruptcy – a Caribbean island with $123 Billion in municipal bonds and unfunded pensions.
• VW Clean Diesel Emissions Scandal – $5.5 Billion in federal fines and court-approved settlements.
• Takata Air-bags – $1 Billion in federal fines and penalties.

A word to the wise is sufficient!

Download the free e-Book of Go Lean … Caribbean – now!

Sign the petition to lean-in for the roadmap for the Caribbean Union Trade Federation.

Go Lean Commentary

On the surface, computer hacking appears to be a victimless crime. But truth be told, hacking does have victims, who can lose their careers, fortunes and lives. So manipulating computer software for malevolent reasons is an absolute “wrong”.

The visual of a hacker does not only apply for some anti-social geek operating in his mother’s basement. No, sometimes, hackers are well kneeled, professional engineers, taking and executing orders from company executives.

Case in point: Volkswagen … and their computer programmers for their Engine Control Units (ECU). These individuals were instructed to manipulate these automotive computer devices to deceive emission testing equipment that their Clean Diesel engine was actually clean as advertised.

It was not!

The concept of Clean Diesel was the prize, the “Holy Grail” of the automotive industry. (The Holy Grail refers to a vessel that serves as an important motif in Arthurian literature. Different traditions describe it as a cup, dish or stone with miraculous powers that provide happiness, eternal youth or sustenance in infinite abundance.)

There are two kinds of internal combustion engines for modern automobiles: gasoline and diesel. Gasoline engines run cleaner while averaging 20 – 30 miles per gallon (mpg), but diesel is more efficient, fuel-economy-wise, averaging 50 – 60 mpg. Clean Diesel would be the best of both worlds – the Holy Grail.

Germany’s Volkswagen (VW) was the #1 automaker … in the world, ahead of Japan’s Toyota, America’s General Motors and others. They were the leader and champion in the race for diesel-based passenger vehicles. (VW owns 12 principal vehicle manufacturers including Audi, Porsche, Citroen, Bentley, Lamborghini, Bugatti, Ducati, Scania, MAN, Skoda, and others).

Apparently, they maintained that lead with some innovation … and some deceit.

Starting in 2015, the “walls came tumbling down” – the wrong was exposed. See the timeline here:

Title: Volkswagen emissions scandal

On Friday, 18 September 2015, the United States Environmental Protection Agency (EPA) said beginning in 2008 the automaker improperly installed engine control unit (ECU) software determined to be a “defeat device”, in violation of the Clean Air Act to circumvent environmental regulations of emissions of nitrogen oxides produced during combustion (NO_x) by diesel engine 2009-2015 model year Volkswagen and Audi cars. The software detects when the cars were being subject to emissions testing, and then fully enabled ECU emission controls to successfully pass.^[119][120] However, during normal driving conditions, emission control software was shut off in order to attain greater fuel economy and additional power, resulting in as much as 40 times more pollution than allowed by law.^[121]Consumer Reports tested a 2011 Jetta SportWagen TDI [(see photo below)] and found in emissions mode its 0-60 mph time increased by 0.6 seconds and its highway fuel economy dropped from 50 mpg to 46 mpg.^[122] Volkswagen admitted to using the defeat device, and has been ordered to recall approximately 482,000 cars with four-cylinder 2.0-liter TDI engines.^[123]United States federal penalties may include fines ranging up to US$18 billion, and possibly criminal charges.^[124] On June 28, 2016, Volkswagen agreed to pay a settlement of $15.3 billion, the largest auto-related consumer class-action lawsuit in the United States history.^[125]

The EPA was first alerted to the issue by the International Council on Clean Transportation (ICCT), reporting results of research commissioned for them by West Virginia University‘s Center for Alternative Fuels, Engines and Emissions (CAFEE).^[126][127] In May 2014, CAFEE published their ICCT sponsored research.^[128] After 15 months of denying the emissions control systems were deliberately gamed and instead claiming discrepancies due to “technical” reasons, on August 21 Volkswagen acknowledged to the EPA and California Air Resources Board (CARB) their emission controls systems were rigged. This was followed by a formal announcement of admission to regulators on September 3 which took place immediately after the EPA threatened to withhold approval for their 2016 cars.^[129] Volkswagen’s initial public response came on 20 September, when a spokesman said they would stop all US sales of the diesel models affected. Chairman Martin Winterkorn issued an apology and said Volkswagen would cooperate with investigators.^[130] Since emission standards in Canada are close to those in the US, Volkswagen Canada also halted sales of the affected diesel models.^[131] Tuesday, 22 September Volkswagen spokesman admit that the defeat device is installed in ~11 million vehicles with Type EA 189 diesel engines worldwide.^[132]

On the first business day after the news, Volkswagen’s stock price declined 20% and declined another 17% on Tuesday, that same day a social media advertisement with Wired about “how diesel was re-engineered” was removed as well as a series of YouTube ads titled “Diesel Old Wives’ Tales”.^{[133][134][135]} On Wednesday, 23 September, Volkswagen chief executive officer Martin Winterkorn resigned.^[136] Volkswagen hired Kirkland & Ellis law firm for defense, the same firm that defended BP during the Deepwater Horizon oil spill.^[137]

On November 2, the EPA issued a second notice of violation (NOV) pertaining to certain diesel 3.0-liter V6 equipped Audi, Volkswagen Touareg and Porsche Cayenne vehicles.^[138] The EPA found beginning with the 2009 model year all vehicles powered by the V6 were non-compliant.^[139] During testing the EPA, CARB and Transport Canada discovered software that activates pollution reduction systems when the automobiles are being driven under federal test conditions, otherwise during real world driving these devices are inactive.^[140][141] Volkswagen disputed the EPA’s findings stating their software is legally permitted,^[142] however shortly after Volkswagen issued a stop-sale for the EPA’s disputed vehicles and additional models the EPA did not question.^[143] In November 2016, Volkswagen and its labour unions agreed to reduce the workforce by 30,000 people until 2021 as a result of the costs from the violations. However, 9,000 new jobs would come by producing more electric cars.^[144] Volkswagen also announced plans to become the world leader in electric cars, producing 1 million VW-EVs by 2025 and 3 million by the group,^[145] and a VW manager stated that its diesel cars would not become available in USA.^[146]

On Wednesday, 11 January 2017, Volkswagen agreed to plead guilty to the emissions-cheating scandal and to pay $4.3 billion in penalties. Six Volkswagen executives were charged.^[147][148] The following day, one of the indicted executives was ordered to be held without bail pending trial as it was feared that he would flee to Germany and extradition would be impossible.^[149][150] For this reason, senior VW management staff were warned not to travel to the US.^[151] On 23 January 2017, a US judge approved a $1.2 billion settlement in which 650 American dealers, “who, like consumers, were blindsided by the brazen fraud that VW perpetrated,” would receive an average of $1.85 million.^[152]

Source: Retrieved May 5, 2017 from: https://en.wikipedia.org/wiki/Volkswagen#Diesel_emission_violations

———–

VIDEO – Volkswagen emissions scandal: A timeline – https://youtu.be/Y5TvFY7xRDM

Published on Jun 28, 2016 – Volkswagen rigged 11 million vehicles to cheat on emissions tests, costing the company billions in fines and fixes. Here’s a breakdown of the scandal.

• Category: News & Politics
• License: Standard YouTube License

As related in the foregoing, after a long period of denial, excusing and shifting the blame, the leadership of VW finally accepted the inevitable:

Truth and consequence.

This is a familiar concern for the movement behind the book Go Lean…Caribbean. There are a lot of issues – right here in the Caribbean – that have been dealt with by stakeholders first accepting-acknowledging the truth – and then dealing with the painful fall-out.

Consider for example the Abolition of Slavery in the British Empire; after 60 years of advocacy the Empire finally acknowledged the “wrong” of slavery of African people. They accepted the truth and “bit the bullet” in 1834; they then compensated every slave-owner in the Empire for  the lost of their “property”. Though this was painful – economically and socially – this move gave the United Kingdom moral authority on the issue of slavery for perpetuity.

Now VW’s focus is on the long road of recovery – “righting the wrong”. According to this article in the Appendix below:

• They have set-up a fund to compensate victims (car buyers and dealers)
• Despite being the “butt of the jokes” – see Appendix VIDEO – the impact on the company’s reputation with car-buyers has been less severe than predicted: sales and profits have stayed strong.
• The relationship with their dealers – especially the ones in the US – needs a lot of mending. Though they have now agreed on a settlement and is compensating them for lost of goodwill and sales – see story here:
  http://www.businessinsider.com/volkswagen-settles-us-dealers-emissions-cheating-scandal-2016-8
  “We believe this agreement in principle with Volkswagen dealers is a very important step in our commitment to making things right for all our stakeholders in the United States” – Volkswagen North American Region CEO Hinrich J. Woebcken said in a statement on August 25, 2016.

This commentary is 3 of 4 in a series considering how to “Right a Wrong”. Surely, lying about Clean Diesel is a “Wrong”. This type of “Wrong” affected the value of the assets for all the car owners and especially damage the viability (new customers and loyalty of existing customers) of the dealership (plus their franchise values). So there are lessons that we need to glean from the “Righting of these Wrongs”. The full series is as follows:

1. Righting a Wrong: 2008 Housing Crisis
2. Righting a Wrong: Puerto Rico’s Bankruptcy
3. Righting a Wrong: Volkswagen Emissions Crisis
4. Righting a Wrong: Takata Air-Bags

As related in the first submission in this series, these “Wrongs” relate to bad actions and inaction by different actors. The image and reputations of VW “took a hit” since 2015. “Righting this Wrong” can override the bad image and the “comeback” or recovery could be their lasting legacy.

The book Go Lean…Caribbean presents a plan to elevate the Caribbean societal eco-systems; it also addresses the eco-system of the automobile industry; the quest is to incentivize an automaker – or two – to locate a plant somewhere in the Caribbean region. The book details this on Page 206. Consider some of the headlines here:

10 Ways to Develop an Automotive Industry  – Page 206

VW would have been a good candidate for a local assembly plant. Upon “righting this wrong”, they would be a good suitor.

Image the jobs … and the indirect economic activity.

This is the purpose of the book Go Lean…Caribbean, to help reform and transform the societal engines in the 30 member-states of the Caribbean region. The book serves as a roadmap for the introduction and implementation of the Caribbean Union Trade Federation (CU). The Go Lean/CU roadmap applies best-practices for community empowerment and features these 3 prime directives, proclaimed as follows:

• Optimization of the economic engines to grow the regional economy to $800 Billion & create 2.2 million new jobs.
• Establishment of a security apparatus to protect public safety and ensure the economic engines of the region.
• Improvement of Caribbean governance to support these engines.

Had the CU been in force when this VW Emissions Cheating scandal popped, the technocratic deliveries would have really made a difference … on protecting the people of the Caribbean.

The points of effective, technocratic stewardship of industrial enterprises have been elaborated upon in previous blog-commentaries. Consider this sample:

Overall, the Go Lean book stresses the community ethos, strategies, tactics, implementations and advocacies to reform and transform the economic, security and governing engines of Caribbean society. This effort will be technocratic! It will “plan do and review”. We must properly administer the testing and certifying our “polluting” industrial endeavors. This vision was anticipated from the beginning of the Go Lean book, opening with these pronouncements in the Declaration of Interdependence (Page 12 – 14):

xi. Whereas all men are entitled to the benefits of good governance in a free society, “new guards” must be enacted to dissuade the emergence of incompetence, corruption, nepotism and cronyism at the peril of the people’s best interest.  The Federation must guarantee the executions of a social contract between government and the governed.

xii. Whereas the legacy in recent times in individual states may be that of ineffectual governance with no redress to higher authority, the accedence of this Federation will ensure accountability and escalation of the human and civil rights of the people for good governance, justice assurances, due process and the rule of law. As such, any threats of a “failed state” status for any member state must enact emergency measures on behalf of the Federation to protect the human, civil and property rights of the citizens, residents, allies, trading partners, and visitors of the affected member state and the Federation as a whole.

xxiv. Whereas a free market economy can be induced and spurred for continuous progress, the Federation must install the controls to better manage aspects of the economy: jobs, inflation, savings rate, investments and other economic principles. Thereby attracting direct foreign investment because of the stability and vibrancy of our economy.

xxvii. Whereas the region has endured a spectator status during the Industrial Revolution, we cannot stand on the sidelines of this new economy, the Information Revolution. Rather, the Federation must embrace all the tenets of Internet Communications Technology (ICT) to serve as an equalizing element in competition with the rest of the world. The Federation must bridge the digital divide and promote the community ethos that research/development is valuable and must be promoted and incentivized for adoption.

xxxiii. Whereas lessons can be learned and applied from the study of the recent history of other societies, the Federation must formalize statutes and organizational dimensions to avoid the pitfalls of communities like East Germany, Detroit, Indian (Native American) Reservations, Egypt and the previous West Indies Federation. On the other hand, the Federation must also implement the good examples learned from developments/communities like New York City, Germany, Japan, Canada, the old American West and tenants of the US Constitution.

Yes, the book Go Lean … Caribbean asserts that we can have our own automotive industry here in the Caribbean homeland.

This is a Big Deal! But this plan is conceivable, believable and achievable.

The purpose of this commentary is to learn from other people, companies and communities that have had to “Right Wrongs”. We want to learn those lessons and apply them in our homeland, so that we can be a better society. Industrial policy could be affected – jobs are involved – our Caribbean society needs to be better at reforming and transforming our industrial eco-system.

Now is the time for all stakeholders – governments, industry and car-buyers – in the Caribbean to lean-in for the empowerments described here-in for our own regional automotive industry. We must do better with promoting industrial developments – being a partner – than our predecessors. This will make all of the Caribbean a better place to live, work and play. 🙂

Download the free e-book of Go Lean … Caribbean – now!

Sign the petition to lean-in for the roadmap for the Caribbean Union Trade Federation.

———–

Appendix Title: Volkswagen – A long road to recovery
Sub-title: The carmaker’s efforts to move on from its emissions scandal are thwarted

THERE are two ways of dealing with a worrying problem in a car engine. One is a complete overhaul; the other is to tinker under the bonnet and hope the trouble goes away. Volkswagen’s efforts to deal with an emissions-cheating scandal that emerged in September 2015 are of the tinkering type. The German carmaker is desperate to draw a line under its ill-fated decision to fit software to 11m diesel cars that detected emissions tests and artificially reduced the amount of nitrogen oxide pumped out. But the disconcerting rumbles continue.

The latest setback came on November 6th, when VW said that a German investigation of market manipulation was examining the role of Hans Dieter Pötsch, chairman of its supervisory board. The probe, which began in June, is looking at whether Martin Winterkorn, VW’s former chief executive, and Herbert Diess, who oversees the core VW brand, should have disclosed the emissions cheating before the company publicly admitted wrongdoing. This is deeply uncomfortable for both VW and Mr Pötsch, who used to be the chief financial officer and was nominated to become chairman on the day the crisis began. It is also a reminder that questions linger about who at the firm knew what.

Adding to VW’s woes, a German newspaper reported on the same day that American regulators had found that another variety of cheating software, which artificially lowered emissions of carbon dioxide, was still being fitted to several models of Audi luxury cars until May 2016. This may expose VW to further compensation, fines and legal entanglements.

The share price has fallen by 24% since the scandal broke, and VW has had to set aside €18.2bn ($19.9bn) to cover the cost of compensating owners and fixing affected cars. Yet the damage is less than many people expected. The impact on the company’s reputation with car-buyers has been less severe than predicted: sales and profits have stayed strong.

But VW now badly needs to put the diesel affair firmly behind it. Coping with the storm has claimed management resources that should have been dedicated to the urgent task of improving the performance of the mass-market VW brand, says Patrick Hummel of UBS, a bank. The costs of making cars bearing the core brand (as opposed to those at Skoda, SEAT and other marques) are sky-high, partly because VW makes so much in Germany, and profit margins are slender.

Investors will surely look more kindly on VW when all the risks, including those at Audi, are plain, and they can better gauge the likely financial consequences. But that will take a while. Despite agreeing on fixes and compensation deals in America, and pledging to rectify vehicles in Europe, VW still has to satisfy American authorities that it will do the same for larger diesel engines that were also affected. It must also resolve the matter of criminal fines in America and fight a lawsuit brought by disgruntled shareholders in Germany.

Meanwhile many in the car industry are questioning whether VW is letting its crisis go to waste by mostly carrying on as normal, without making radical changes to its culture. Matthias Müller, the current chief executive, is giving local managers more leeway to tweak car designs and other product features: that is a good thing, according to Citigroup, another bank. This sort of freedom would have been unthinkable under Mr Winterkorn but is essential in a business where tastes vary so widely in different markets. But Mr Müller’s commitment to making the savings that VW needs is unclear. Granted, in a few weeks he will conclude a “future pact” with workers at the carmaker’s core brand. It will govern cuts in costs, employees’ productivity and overall strategy. However, few expect it to go far enough.

If it does fall short, that will be partly because Mr Müller is a long-serving insider picked by the Porsche and Piëch families, who control over half of VW’s voting shares. Even if the families had been bold enough to bring in someone from outside, minded to act more decisively, such a boss would have met resistance from trade unions and from the state of Lower Saxony, where VW is based and which has a 20% stake in the company. Both wield much influence on its powerful supervisory board. In time, the failure to rebuild thoroughly may come to be seen as a mistake.

Source: Posted November 10, 2016; retrieved May 5, 2017 from: http://www.economist.com/news/business/21710009-carmakers-efforts-move-its-emissions-scandal-are-thwarted-long-road-recovery

———–

Appendix VIDEO – John Oliver: Volkswagen – https://youtu.be/Cdif-zK4z14

Published on Sep 28, 2015 – From HBO’s Last Week Tonight with John Oliver. WARNING: Adult Language.
All rights belong to HBO. Check out the official channel here: https://www.youtube.com/user/LastWeek…

• Category: Comedy
• License: Standard YouTube License