Saturday 3 March 2018

How we can make the Germans fund the EU divorce bill

I read a hatchet job in the Sunday Times a month ago* on the German car producer Volkswagen. It included all sorts of historical mud back to the days when Ferdinand Porsche was reputedly encouraged by Hitler to build a "people's car" and came up with a rear-engined vehicle with a rounded body that would become the much loved Beetle.  I'm not sure why it was so loved, but then I didn't like minis either. Be that as it may, the piece went on to note that, not only has VW been poisoning us and our children with their deliberately under estimated toxic diesel fumes, they also carried out experiments in gas chambers with monkeys. Yes, macaque monkeys were packed into small airtight chambers and forced to watch cartoons (I'm not making this up) while breathing in fumes from a VW Beetle as part of research into the effects of diesel fumes on humans, presumably to try to show that what they have been exposing us to isn't that harmful. BMW and Daimler, who ran for the horizon when the story broke, contributed funding for the experiments.

The Sunday Times story also dredged up stuff about slave workers in the Nazi days and slush funds and executives charging sex to expenses at the bland sounding K5 Relax club in Prague a decade or so ago. There were also tales of "special bonuses" for the head of the VW workers council (union boss in other words) as well as footing the bill for union officials to avail themselves of prostitutes on trips away from VW's Wolfsburg base. Oh and the episode in the 1990s where General Motors tried to have VW designated as a criminal organisation under US racketeering law due to industrial espionage. GM demanded up to $4bn and the ruinously expensive case was settled after VW admitted "the possibility" that illegal activities may have been involved.

The Sunday Times concluded that, whatever the legal or moral issues of the monkey torturing affair, "it is hard to think of a more numbingly inept strategem for any modern German company than to associate itself with a gas chamber". Ouch!

 It was a Sunday Times journalist, then environment correspondent Jonathan Leake, who first spotted that the data showed the level of noxious particle and fumes from diesels in the atmosphere was increasing despite the supposedly lower emissions from the introduction of "clean" diesel engines. Leake took the issue up with a Brussels based environmental lobbyist which lead to the eventual exposure of VW's software "defeat" device to cheat the emissions tests. It's hard to think of a more egregious episode of corporate malpractice, at least since the German company Grunenthal kept thalidomide on the market after it was aware of the impact the drug had on foetuses.

In due course VW paid more than $26bn in settlement of US government charges and as compenstaion to US diesel owners for the emissions cheat scam.

More than two years on the UK government has not issued a single penalty or ordered a mandatory recall for vehicles fitted with defeat devices (I know that wouldn't affect the operation of the vehicles but it would punish VW). The UK government has powers to force car makers to comply with emissions rules but has failed to use them.

Which made me think - why hasn't action been taken against VW in the UK? Is HMG worried that there could be equivalent claims against British manufacturers (not that there are many of them bar Jaguar Land Rover). So I made a mental note to write a blog suggesting that our EU divorce bill could effectively be funded by a whacking great fine on VW. Now I'm not suggesting that nobody else has had this idea, but I hadn't seen it anywhere in the press. Until Wednesday, when it was proposed by the Daily Mail's Sarah Vine, aka Mrs Gove. The ascerbic Mrs G noted that as there are more than twice as many VW's on our roads as in the US then, pro rata, the fine would be pretty much equivalent to the Brexit EU divorce bill.

Beaten to the punch! Note to self to get backside in gear more promptly in future.

Just because Mrs Gove (and me and I'll grant you many others) thought of it doesn't make it a bad idea, mind. While it could be worth having on the table as a threat, I think it's astounding VW has not been made to pay.

Grunenthal never paid up in full for thalidomide. VW mustn't be let off the hook.

*The Car Maker That Sees No Evil - Volkswagen loses its moral compass, Sunday Times 4 Feb 2018. The story about the monkeys was actually broken by the New York Times in January.

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